Federal Minimum Wage to Increase in July
June 1, 2007
by Employment & Labor Law / Employee Benefits Group
Stinson Morrison Hecker LLP
Copyright © 2007
The federal minimum wage will increase in three steps from $5.15 per hour to $7.25 per hour by 2009, with the first increase – to $5.85 per hour – to take effect on July 24, 2007, pursuant to the Fair Minimum Wage Act of 2007 (H.R. 2206), signed by President Bush on May 25, 2007 as part of the emergency war supplemental bill.
Future Wage Hikes – In addition to the initial $0.70 increase on July 24, 2007, the federal minimum wage will increase to $6.55 per hour on July 24, 2008 and to $7.25 per hour on July 24, 2009. This represents the first increase in the federal minimum wage since 1997.
U.S. Territories – The new law also extends, in stages, the Fair Labor Standards Act to the U.S. territories of America Samoa and the Commonwealth of the Northern Mariana Islands.
New Wage & Hour Poster – The U.S. Department of Labor has revised its minimum wage poster to reflect the increases, and is available for viewing, free downloading and posting on the agency’s website. A revised FLSA Handy Reference Guide is also available electronically on the site and provides guidance on related FLSA provisions (such as the payment of less than the full minimum wage to certain workers with disabilities, full-time students, and student learners who are employed under a special certificate, and information on provisions relating to the payment of wages to tipped employees and workers under the age of 20).
State Minimum Wage Laws – As a reminder, many states have minimum wage rates higher than the federal level. The U.S. Department of Labor maintains a helpful summary of State Minimum Wage Laws that includes the minimum wage and overtime premium pay standards applicable to nonsupervisory nonfarm private sector employment under state and federal laws.
Bottom Line – The increase in the minimum wage will occur in the middle of the week in each of the next three years. Accordingly, employers with minimum wage employees may need to ensure that their payroll systems appropriately adjust for the change in wage rate during the week the minimum wage increase takes effect, so that employees are properly paid.
Stinson Morrison Hecker LLP is one of the country's largest law firms with more than 335 attorneys in more than 45-industry-focused areas. If you would like more information regarding this summary, please contact one of our Employment & Labor Law and Employee Benefits attorneys.
Law at Work is designed to give general information and is not intended to be a comprehensive summary or to treat exhaustively the subjects and matters covered. The information appearing herein does not constitute legal advice or opinions. Such advice and opinions are provided only upon engagement with respect to specific factual situations. Nothing contained herein shall be considered as an admission in any matter or controversy.
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