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Nebraska Federal Minimum Wage Alert

June 9th, 2007 Posted by Mark

Back stateside, folks, and next in our alphabetical adventure through the United States of America and the federal minimum wage is N and Nebraska. Last we left off at this state, it was only a couple of weeks ago and we were still unsure if the federal minimum wage would pass at all. But lo and behold, the federal minimum wage law got signed by President Bush and is now the law of the land. But what happened in Nebraska?

Well, the state law makers there had been considering a change to the way the state minimum wage had been done. Their goal was to pass a new Nebraska minimum wage bill that would tie the state minimum wage to the federal minimum wage, if and when the federal minimum wage went up. Back when I last checked my sources, the word on the street was that the bill still had some ways to go in the state legislature in Lincoln, Nebraska, the capital.

But I went back and checked my sources again, and there was now no word at all of what had happened to this Nebraska minimum wage law. I dug a little further into my secondary sources, checked a bit more, put my nose to the grindstone so to speak, and lo and behold, I found out what went down in Lincoln. For some reason, the law makers did not give much press to what they had done with the Nebraska minimum wage bill, but they did indeed pass it this past session (the session has since ended).

The new Nebraska minimum wage bill, called LB 31 officially, will increase the Nebraska minimum wage to meet the federal minimum wage any time that the federal minimum wage increase. So when the federal minimum wage increases in a few weeks from $5.15 per hour to $5.85 per hour, the Nebraska minimum wage will be right there with it. And when the federal minimum wage, a year later, increases from $5.85 per hour to $6.50 per hour, again, the Nebraska minimum wage will go up too. The same will be true when the federal minimum wage increases one year later in 2009 from that $6.50 per hour level to $7.25 per hour.

This is an important new law in Nebraska because otherwise the state minimum wage could have remained at $5.15 per hour, which is what we have seen in some other states we have looked at. The repercussions of this would be that some employers in the state—generally speaking, the smaller and local ones with less than $500,000 in annual revenues and or no employees working out of the state lines—would still be able to pay that lower Nebraska minimum wage while larger interstate employers would be paying the higher federal minimum wage. Now, under the new Nebraska minimum wage bill, all employers for the most part will be paying the same minimum wage.

It is interesting to note, too, that this situation could have been even more different had another Nebraska minimum wage bill been passed. Back in the spring, if you remember, we had talked about another Nebraska minimum wage bill that was getting some debate in the state legislature. That law would have raised the state minimum wage to $6.25 per hour over the course of the next three years, no matter what the federal minimum wage bill did. Then after that, the Nebraska minimum wage would have increased again every year based on what the Consumer Price Index, or the rate of inflation, was in the state economy the previous year. This would have made for interesting situations in 2009 when the federal minimum wage probably would have been higher than the Nebraska minimum wage.