Jun 28, 2007

Increase in Federal Minimum-Wage

For the first time in ten years, Congress has passed, and the President has signed, legislation increasing the federal minimum-wage. The federal minimum-wage, which is currently $5.15 per hour, will rise over the next two years to $7.25 per hour. This increase will be made in three steps and on the following schedule:

The increase in the federal minimum-wage will have several implications on all employers. Obviously, compliance with the new minimum-wage requirements is mandatory. While the change will have its most direct impact on employees who are currently paid at or near minimum-wage, the change will also affect those further up on the pay scale who will speculate, and perhaps expect, their wages to increase as well.

Notably, the new minimum-wage law does not appear to increase the minimum-wage for employees who qualify for a tip credit. Those employees will remain at the current minimum-wage of $2.13 an hour. However, employers need to be aware and ensure that these employees are receiving sufficient tips to bring their total wages in compliance with the new minimum-wage.

Finally, it is important to be aware that many states and localities have enacted their own minimum-wage legislation. Therefore, to the extent that a state or local law requires an employer to pay a minimum-wage that is higher than that required by the federal government, the employer must pay the higher wage.

With the increased publicity surrounding the minimum-wage hike, now more than ever it is crucial for employers to evaluate their practices to ensure that you are complying with all aspects of state and federal wage laws. If you have any questions regarding the new minimum-wage, or any other wage or employment issue, please contact any of the attorneys in our Labor & Employment Practice.

Share via
Copy link
Powered by Social Snap