labor lawAdivision of labor law center

On January 1, 2008 the Montana minimum wage will increase by 10 cents from $6.15 per hour to $6.25 per hour. Under a unique provision to the state minimum wage law, businesses with annual revenue under $110,000 can still pay workers $4.00 per hour.

The Montana Department of Labor and Industry issued a wage determination on  October 2, 2007 that informed Montana employers of this change.

Under Initiative 151, the Montana minimum wage is adjusted annually based on the cost of living. The increase is based on the Consumer Price Index (CPI) for All Urban Consumers from August 2006 to August 2007, rounded to the nearest nickel.

In 2007, the increase for the COI was 1.97%. Based on the 2007 Montana minimum wage of $6.15, that would be an increase of 12.11 cents. Under the statute, this is rounded to 10 cents.

This is just the first of two minimum wage increases that Montana employers will see in 2008. That’s because the statute mandates that the state minimum wage be at least as high as the federal minimum wage. On July 24, 2008 the federal minimum wage will increase by 70 cents from $5.85 to $6.55 per hour. Because that rate is higher than the 2008 Montana minimum wage of $6.25, the state minimum wage will increase to $6.55 per hour on that date, as well.

Montana is one of just 7 states that does not permit employers to pay tipped workers less than the state minimum wage. According to Labor Commissioner Keith Kelly, tipped workers are entitled to $6.25 per hour after January 1, 2008 unless the employer’s gross revenue is less than $110,000. In that case, the tipped workers are entitled to $4.00 per hour.

The other states in the U.S. that do not allow employers to pay a lower hourly wage to tipped workers are Alaska, California, Minnesota, Nevada, Oregon and Washington. In all of those states, servers, bellhops, valets and other tipped workers must be paid between $5.25 and $8.07 per hour.

With two changes to the Montana minimum wage slated for 2008, it’s important for employers to update their labor law posters. Both state and federal law levy fines against employers who fail to display updated posters, such as those at www.laborlawcenter.com.

There are a number of states that are changing the minimum wage in 2008. The federal minimum wage is $5.85 per hour. Many states simply echo the federal law and require employers to pay employees $5.85 per hour, too.

Other states have enacted state minimum wages with different rates, plus some interesting exceptions to the law. For instance, employers in Missouri in seasonal amusement or recreation do not have to pay overtime to workers until they’ve worked 52 hours in a week. All other employers in the state are required to pay overtime after 40 hours.

The highest state minimum wage will be Washington’s $8.07 beginning New Year’s Day, 2008.

In 2008, Massachusetts will join the top five with a state minimum wage bump from $7.50 to $8.00 per hour. Yet, agricultural employees earn only $1.60 per hour. Workers in professions that earn tips are legally guaranteed $2.63 per hour.

For a new worker in a new industry, some states allow employers to pay a lower wage for the first 90 days. Some states apply the 90 day provision to younger workers, too. Other states established laws where businesses can pay a worker who’s under the age of 18 at a lower rate, but only until they reach legal age.

Kansas has a state minimum wage of $2.65 per hour. Kansas employers covered by both federal and state law, though, are required to pay their employees the federal rate of $5.85. When both federal and state laws cover a business, the law that gives the worker the best deal is the one that applies. In Kansas, federal minimum wage provides greater benefit.

In Washington, the state minimum wage of $8.07 would apply, because it provides more benefit to the employee than the federal wage of $5.85 per hour.

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