A little-noticed provision in Mississippi's CLEAR Act reshapes how employers must pay and track workers from the state's prison work-initiative program.
Most Mississippi business owners don't realize that if they hire someone through the state's prison work-initiative program, a new law is about to change how much they must pay that worker—and how they calculate and report it.
The provision is buried in HB925, the Creating Logic for Efficiency and Accountability Reform (CLEAR) Act. It takes effect July 1, 2026, and it matters if your professional services firm has ever considered or currently uses prison work-initiative labor.
Under Section 10 of HB925, which amends Mississippi Code Section 47-5-579(5), any employer hiring through the prison work-initiative program must pay at least the prevailing wage for that position. In practical terms, this means no less than the federal minimum wage, at minimum—but potentially higher depending on the job classification and local prevailing wage standards.
This is a floor, not a ceiling. If your industry or role typically commands a higher prevailing wage, that's what you'll need to pay.
The law also changes how deductions are calculated. Previously, percentage-based deductions (such as taxes or program fees) were calculated on the gross wage. Under the new rule, all percentage deductions are now calculated on wages after mandatory deductions are removed. This can affect take-home pay and your withholding obligations.
If you operate a professional services business in Mississippi and have hired or are considering hiring someone through the state's prison work-initiative program, this applies to you. This includes consulting firms, accounting practices, legal services, engineering firms, architectural offices, and similar operations.
Even if you've never used the program, it's worth understanding if labor costs or workforce flexibility are part of your business planning.
The law also adds data-reporting requirements on the corporation that administers the prison work-initiative program. While the reporting burden falls primarily on the program administrator, these new data obligations will indirectly affect employer compliance documentation. You should expect that the program administrator may request more detailed information about wages, hours, deductions, and job classifications than they have in the past. Keeping clear records will be essential.
If you currently employ someone through the prison work-initiative program, review your wage structure and deduction calculations now. If you're considering it, understand that the prevailing wage requirement and new calculation methods will be in effect starting July 1, 2026.
Consult with your payroll provider or accountant to ensure your systems can accommodate the new deduction-calculation method. The difference between calculating percentages on gross versus post-deduction wages can be material, especially over time.
The Mississippi Professional Services Association and similar industry groups have begun circulating guidance on HB925's employer-side provisions. A detailed, business-specific summary is available through most state trade associations.
Source: HB925, Section 10 (amending Miss. Code § 47-5-579(5)); effective July 1, 2026.