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New Mexico Federal Minimum Wage Alert

June 10th, 2007 Posted by Mark

Before Arizona and before New Hampshire became a huge focus of our attention here on the minimum wage issue—and even before the state of Missouri became such a hot topic and all we could talk about was tipped employee minimum wage and overtime for fire fighters and police officers—there was New Mexico. But then in March of this year, the governor of the state signed into law a compromise New Mexico minimum wage law and the state issue’s seemed to fade away and all those other states took the spotlight away.

That was what happened—the New Mexico minimum wage bill got signed and all the fuss in the state disappeared. What materialized, though, was a new New Mexico minimum wage law that come this January, will increase the state minimum wage from its current level of $5.15 per hour to a new level at $6.50 per hour. Then in January 2009, the New Mexico minimum wage will increase again, this time to the final level of $7.50 per hour.

Originally, though, in the New Mexico legislature, there had been two versions of a New Mexico minimum wage bill floating around, and that is why we spent so much time talking about it. The first version of the New Mexico minimum wage law came out of the state House, where they wanted to increase the New Mexico minimum wage higher and faster than what the Senate’s second version had planned to do.

Another point of difference was that the Senate version of the law did not include annual increases to the New Mexico minimum wage for inflation, in other words, increasing the New Mexico minimum wage every year after 2009 to make way for the higher costs of living that the state would experience, or the Consumer Price Index. The Senate version of the bill would have also made it illegal for small locales—towns and counties and such—to have their own minimum wages and living wages. Currently, Santa Fe and Albuquerque have their own double digit minimum wages, and under the Senate version of the New Mexico minimum wage bill, these living wages would have had to been removed from the books.

The way the New Mexico minimum wage bill turned out, I think, was that the employers of the state do not have to expect an annual increase due to inflation to start in 2010, but one thing that the House got removed from the Senate version of the bill was the ending of local minimum wages. Under the new law, those local minimum wages such as the ones in Santa Fe and Albuquerque get to remain in effect, but no other localities for the time being can move to create new local minimum wages.

What does all this mean now that the federal minimum wage will be in effect soon? Not too much because the New Mexico minimum wage law will predominate in the state through 2009—except for a few months this year, when the federal minimum wage will be at $5.85 per hour and higher than the $5.15 per hour New Mexico minimum wage. While this takes place for the remainder of 2007, some employers in the state will be required to pay that higher federal minimum wage.

But then in 2008, as soon as the year starts, the New Mexico minimum wage will increase to that $6.50 per hour, and will overtake the federal minimum wage. Of course, in the middle of 2008, the federal minimum wage will also increase to $6.50 per hour and catch up. But then again, the New Mexico minimum wage will surpass the federal minimum wage in January, this time in 2009, and at $7.50 per hour, the New Mexico minimum wage will remain ahead of the federal minimum wage, even when it becomes $7.25 per hour in the middle of 2009.

Employers who are liable to follow the federal wage and hour regulations in the Fair Labor Standards Act will still be required to follow the New Mexico minimum wage law, because the common practice on the state level is to require employers to pay the higher of the two minimum wages that they are required to follow. Those employers who are liable to follow the FLSA include those employers that bring in more than $500,000 per year in revenue, as well as those employers with employees who perform functions on an interstate basis—meaning that they sell, train, travel, work, or produce in states other than New Mexico. There are also FLSA requirements for certain types of employers, such as schools, universities, hospitals, retirement and other care settings, and governmental agencies. All of them would normally have to follow the federal minimum wage law if the New Mexico minimum wage wasn’t higher.

Those local and smaller employers who are not required to follow the Fair Labor Standards Act, well, all of that talk above does not mean too much for you. You would get to pay the New Mexico minimum wage law no matter if it was higher or lower than the federal minimum wage law.

And all employers in the state of New Mexico—I hope by now you have moved to get yourselves new New Mexico minimum wage posters, as well as your new latest and greatest updated federal minimum wage posters that must replace the now outdated federal minimum wage posters on your walls.