When both the federal and Arkansas minimum wage apply to an employee, the employee is entitled to protection under whichever confers the greater benefit. In this case, an employee covered by both the Arkansas and federal minimum wage is entitled to the higher federal minimum wage of $7.25 per hour.
The federal minimum wage does not cover every Arkansas employee. The federal minimum wage and overtime law is the FLSA or Fair Labor Standards Act. The FLSA applies to every employee of a business with $500,000 or more in annual revenue.
In addition, individual employees (more…)
“We are pleased that we were able to help these workers get back the pay they deserve,” said US Secretary of Labor, Elaine L. Chao.
She was speaking after a two-year investigation in violations of the federal and Arkansas minimum wage laws, by a Huston based tree-trimming company. The company has been ordered to pay 2,501 employees, $1.8 million dollars in overtime pay, following the investigation by the Dept. of Labor.
The investigation lasted from August 2004 through to August 2006 after an employee of ABC Professional Tree Services complained. The Dept. of Labor found that as well as violating minimum wage laws in 16 states, they also fell foul of the federal Fair Labor Standards Act. The total ABC Professional Tree Services agreed to pay amounted to $1,801,507.
The U.S. Secretary of Labor, (Elaine L. Chao), assured the public that “the department will continue our efforts to ensure that employers are paying workers properly.”
ABC Professional Tree Services are current paying back overtime wages to employees in the following U.S. states.
New York, Maine, Maryland, Virginia, New Jersey, South Carolina, Ohio, North Caroline, Florida, Tennessee, Arkansas, Mississippi, Georgia, Louisiana and Arkansas.
A portion of the back wages will be paid to workers who were involved with the clean up operation after Hurricane Katrina. ABC Professional Tree Services provides clean up services after natural disasters, as well as tree trimming and cutting around power lines.
Employees covered by the Fair Labor Standards Act are entitled to be paid a minimum wage of $5.15 per hour for the first 40 hours worked each week. If an employee works over 40 hours a week, then they are entitled to and hourly rate of time-and-one-half for each hour worked.
The FLSA also requires that employers must keep accurate payroll records documenting the number of hours worked by an employee each week.
When Howard Johnson’s was found guilty of underpaying their staff by not paying overtime to those who were salaried yet worked more than 40 hours a week, in the early 1980’s, you would have thought that companies would take note.
But Wal-Mart, Inc. is another company who has had to settle a suit with the US Dept of Labor after violating federal and Arkansas minimum wage laws. They now have to repay staff back wages, plus interest. This affects nearly 87,000 workers in Arkansas and throughout the United States and amounts to $33 million.
So how can you make sure you do not fall prey to such companies?
Well, as a general rule of thumb, if you earn less than $445 per week, or $23,000 per year, then you are entitled to overtime payments if you work more than 40 hours a week. This applies even if you are salaried.
The ruling regarding Wal-Mart, was that even though they employed trainee managers, intern and programmers on a salary basis, they were still entitled to overtime pay when they were required to work long hours. Even if their salary exceeded the above amounts, they were entitled to overtime as they did not have significant decision making powers.
Some companies try and get around the federal and Arkansas minimum wage laws by employing so called “managers” but do not give them decision making powers, or a salary that would come with them. The employees that worked for Wal-Mart were stated as being “non-exempt salaried” workers, which meant that they were entitled to overtime pay.
This can apply to any form of work, not just stores. If you are salaried, even if it amounts to over $23,660 per year, yet do not have decision-making powers within the store, department of division, then you may be entitled to overtime compensation if your hours amount to more than 40 per week.
As it stands now, the percentage that tipped employees must make of the regular minimum wage—in this so called tipped credit scenario—is 58 percent of the Arkansas minimum wage. The Arkansas minimum wage is currently set at $6.25 per hour, which then makes the Arkansas tipped employee minimum wage the $3.62 that the state legislators want to keep it at.
If down the road the Arkansas minimum wage changes, the tipped employee minimum wage would stay at this $3.62 per hour until the legislature goes and passes another bill that would specifically change the way the tipped employees in the state get paid their minimum wage.
No word on yet as to whether the Senate has a similar bill brewing in Little Rock. Actually, check that. The previous week, the Senate passed a similar bill that set the minimum wage for tipped employees in the state. In the Senate the vote was even more definitive. The Senate had voted 35 to nil on the bill, which had been introduced there by Democratic Sen. Barbara Horn from the locale of Foreman.
However, here is an interesting tidbit about these two bills, and one reason this will not be the final “review” of the Arkansas minimum wage. The Senate bill here pegs the tipped employee minimum wage to $2.63 per hour, which would be a full dollar about less than what the House bill fixes the minimum wage at. So there will have to be some form of compromise before this bill can get passed to the Governor of the state and signed.
Just in case you forgot, Arkansas employers, it was last year during a special session that the Arkansas legislature changed the Arkansas minimum wage from $5.15 per hour to $6.25 per hour, making Arkansas employees some of the best paid in the South.
One of the changes going in the state of Arkansas is, well, still going on when it comes to the state minimum wage. That is particular to how much employers must pay their tipped employees, which are basically those employees that make much of their money from the tips that their customers give them, such as waitresses, waiters, bellboys, bartenders, and the like.
We have talked about this fact that tipped employees actually can get paid less than the regular minimum wage when it comes to several states, but the big state in question was Missouri, where there was a pretty big controversy over what tipped employees should get paid. We can get around to reviewing the facts of that controversy, and its outcome, when we get down to Missouri in this alphabetical and methodical review of all you need to know about the minimum wage.
As for the Arkansas changes that are in the process, or could be in the process, of taking place, there was just this pass week a bill that was approved by the Arkansas state House that would make it that tipped employees would get a set amount of minimum wage, rather than the way the system works now. The Arkansas minimum wage law now gives tipped employees a percentage of the overall minimum wage.
The House vote, however, seemed a definite statement that lawmakers in the state would want to change the way things have been for tipped employees in the state. The vote went down by a count of 87 to 6 in favor of the new change to the Arkansas minimum wage law. The bill that got voted on would level off the tipped employees’ minimum wage at $3.62 per hour, no matter what happens down the road to the Arkansas minimum wage.