labor lawAdivision of labor law center

The July 24, 2008 federal minimum wage increase affects employers in a number of states. Under the Fair Minimum Wage Act of 2007, the federal minimum wage increased by 70 cents from $5.85 to $6.55 per hour.

 

This increase affects most employers in states where the state minimum wage is lower than the new federal rate. Under federal law, when an employee is covered by both state and federal law, the employee is entitled to coverage under whichever law provides the greater benefit.

 

This means that if the state minimum wage is higher, it will prevail. However, in states where the federal minimum wage is higher than the state rate, the federal rate prevails (if an employer is subject to both.)

 

In some states, smaller employers may not be subject to the federal minimum wage. In that case, the lower state minimum wage will apply. However, in these states, the majority of employees will be entitled to the higher federal minimum wage of $6.55 per hour.

 

According to the US Department of Labor, states affected and their minimum wages include:

 

•  Arkansas                   $6.25
• Georgia                      $5.15
• Kansas                      $2.65
• Minnesota                 $6.15
• Nevada                      $6.33
• New Hampshire       $6.55
• New Mexico              $6.50
• Wisconsin                 $6.50
• Wyoming                   $5.15

As we have already mentioned, the new federal minimum wage is automatically adopted by a number of states from Idaho and North Dakota to Texas. It also applies to states with no minimum wage at the state level, such as Alabama and Louisiana.

 

In Montana, the state minimum wage increases to $6.55 automatically. Except, employers with revenue of $110,000 or less are still permitted to pay just $4.00 per hour.  

 

The federal minimum wage applies to employers with more than $500,000 in annual revenue, regardless of the number of employees. It also applies to employers who engage in interstate commerce. Nearly every modern employer falls into this category because an employer who has a web site, or an internet connection, uses email or makes (or receives) long-distance telephone calls is usually engaging in interstate commerce. In addition, an employer who accepts credit cards is almost always engaged in interstate commerce, since the credit card processing centers and issuing banks are likely in a variety of states.

 

Even when an employer’s business is strictly local, some employees who engage in interstate commerce (such as a receptionist answering phone calls, or  a mail clerk accepting out-of-state mail) may be covered under the federal minimum wage, when the entire enterprise is not.

Last 10 posts by Amelia

• Colorado Reduces Minimum Wage in 2010 - November 20th, 2009
• New Law Expands FMLA and NDAA for Military Families - October 30th, 2009
• California Approves Exempt Salary Reduction - October 16th, 2009
• 3 New Illinois Laws - October 9th, 2009
• New Definition of Disability - September 25th, 2009
• E-Verify Regulations - September 18th, 2009
• New USERRA Regulations - September 2nd, 2009
• E-Verify News - August 26th, 2009
• New Tennessee Workers’ Compensation Law - August 19th, 2009
• Louisiana Minimum Wage - August 3rd, 2009