labor lawAdivision of labor law center

Illinois, Nevada and Kentucky implemented minimum wage increases effective today, July 1, 2009.

The Kentucky minimum wage increases today from $6.55 to $7.25 per hour. This change is just 23 days earlier than an identical change in the federal minimum wage.

The Illinois minimum wage increases from $7.75 to $8.00 today. This increase puts the Illinois minimum wage in a four-way tie for the fourth highest minimum wage in the nation.

The Nevada minimum wage increases today from $6.85 per hour to $7.55 per hour, although a number of Nevada employers are exempted.

The highest minimum wage is currently in the state of Washington, with a minimum wage of $8.55 per hour. The Oregon minimum wage is $8.40 per hour, while the minimum wage in Vermont is $8.06 per hour. The minimum wage in California, Connecticut and Massachusetts is at $8.00 per hour – the same as the Illinois minimum wage, effective today.

The minimum wages in Washington, Oregon and Vermont are adjusted for inflation annually on January 1. The minimum wage in California, Connecticut and Massachusetts are not adjusted annually for inflation – they are changed only by statute.

The next Illinois minimum wage change (more…)

Five states increased their minimum wages effective July 1, 2008. They include: Illinois, Michigan, West Virginia, Kentucky and Nevada.

In Illinois, the state minimum wage increased 25 cents from $7.50 to $7.75 per hour. This is the second step in a 3-tiered increase. The state minimum wage will increase again in 2009. The law applies to any employer with 4 or more workers who are not family members.  More details here.

Michigan’s minimum wage also increased 25 cents per hour from $7.15 to $7.40.  The state minimum wage has risen nearly $2.00 since 2005, despite sluggish job growth, problems for the automotive industry and the loss of a number of major employers. The law applies to employers with 2 or more workers. More details here.

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On July 1, 2008, over 650,000 Illinois workers will see a 25 cent increase in the minimum wage from $7.50 to 7.75 per hour.

This increase is the second step in a multi-year program signed into law in 2006 by Illinois Governor Rod Blagojevich. This law set up a 25 cent per hour increase each year from 2007 to 2010, resulting in a minimum wage of $8.25 per hour in 2010.

These increases are the second set of raises for the minimum wage under the tenure of Governor Blagojevich. In 2003, he raised the Illinois minimum wage from $5.15 to 5.50 per hour. In 2004, the minimum was raised another dollar to $6.50 per hour. Effective July 1, 2008, the minimum wage will have been increased in that four year period by $2.60 per hour.

Each of the current increases will take place on July 1, the first taking place on July 1, 2007, the last on July 1, 2010.

In 2007, Governor Blagojevich stated, “A person who works 40 hours a week should earn enough to care for their family and afford basic necessities. I’m proud that in Illinois, we’ve kept our promise to help working people and make their lives easier after years of neglect at the federal level. It will be a little easier for thousands of Illinois families to pay their bills, put food on the table or buy clothes for their kids.”

Governor Blagojevich also said, “Workers deserve a fair wage for their hard work, and they deserve a wage that keeps up with the increasing cost of living.”

The new law will increase the Illinois minimum wage for tipped workers to $4.65 per hour. Employers can pay a training wage of $7.25 per hour to these workers during the first 90 days of employment.

The minimum wage law in Illinois also allows employers to pay their under age 18 workers a lower wage. On July 1, 2008, that rate will go from $7.00 per hour to $7.25 per hour, and the minimum for tipped workers under age 18 will be $4.35 per hour.

Two Illinois Democrats from Chicago, Senator Miguel del Valle and State Representative William Delgado, sponsored Illinois law SB2339, which was signed into legislations by Governor Blagojevich. This law gives the Illinois Department of Labor (IDOL) increased power by creating better provisions for penalties and for enforcement of the state minimum wage laws.

Representative Delgado said, “I would like to thank Governor Blagojevich for signing this legislation, and for his consistency in helping working families get ahead. Thanks to laws like this, Illinois is a leader when it comes to helping working men and women seek employment with decent wages.”

Prior to enactment of SB2339, the IDOL had no effective methods to sanction businesses that refused to pay workers, or delayed a worker’s paycheck.

According to Illinois law, employers are mandated to pay workers at least two times per month, within 14 days after the end of the pay period. The law also states the when employees are terminated they should be paid by the next regularly scheduled pay day.

Prior to SB 2339, when employers ignored the law, the IDOL and employees had no way to assess penalties for the back pay, even for money recovered from a private lawsuit.

Under SB2339, employees can collect a penalty of 2% per month on recovered back pay. In addition, IDOL can collect penalties under the Wage and Payment and Collection Act of 1% per calendar day from companies that refuse to pay earned wages or final pay to workers.

To investigate employers that don’t pay workers their wages, SB 2339 authorizes the Director of Labor to subpoena the company’s relevant evidence, including books, payroll, and other records. The law also gives the IDOL authorization to assess penalties for violations of minimum wage and overtimes laws. When a company’s acts of violations are found to be willful, repeated, or display a reckless disregard for the law, the IDOL can impose a penalty of up to 20%.

Director of the Illinois Department of Labor, Art Ludwig commented. “We remain committed to protecting the rights and wages of workers in Illinois.”

In 2006, Governor Rod Blagojevich signed a law to increase the Illinois state minimum wage, adding 25 cents each year from 2007-2010 to attain an hourly wage of $8.25 per hour.

On July 1, 2008, the second in the series of increases will take place, raising the Illinois minimum wage from $7.50 to $7.75 per hour.

Also effective on July 1, 2008, is an increase in the minimum for tipped workers to $4.65 per hour. During the first 90 days of employment employees can be paid a training wage of $7.25 per hour.

Employers are legally permitted to pay workers under the age of 18 a lower wage. Youths, under the current statute, can earn $7.00 per hour, but on July 1, 2008, they must be paid $7.25. For tipped workers under the age of 18, the hourly rate is $4.35.

According to the Illinois Department of Labor (IDOL) over 650,000 workers in Illinois will be affected by these increases.

In 2007, the Governor said, “A person who works 40 hours a week should earn enough to care for their family and afford basic necessities. I’m proud that in Illinois, we’ve kept our promise to help working people and make their lives easier after years of neglect at the federal level. It will be a little easier for thousands of Illinois families to pay their bills, put food on the table or buy clothes for their kids.”

This series of increases to the Illinois minimum wage is actually the second time Governor Blagojevich has upped the state minimum rate. In 2003, he signed a law increasing the minimum from $5.15 per hour to $5.50 per hour. In 2004, the minimum rose another dollar to $6.50

Over four years, the Illinois minimum wage has increased $2.60 per hour.

Beatrice Jackson, President of the Association of Community Organizations for Reform Now (ACORN) praised the increase. “For thousands of working families who live on the brink of poverty, the increase in Illinois’ minimum wage will help workers afford basic necessities that so many of us take for granted like food, clothing, housing and education.”

Illinois Minimum Wage Penalties

Illinois law SB 2339 strengthened the Illinois Minimum Wage Law and the Wage Payment and Collection Act, giving the Illinois Department of Labor (IDOL) even greater power to enforce state minimum wage laws.

Employers are required by law to pay employees at least twice per month within two weeks of the end of pay period. Terminated employees must receive their wages by the next scheduled payday.

Prior to SB 2339, the IDOL had no sanctions against employers who delayed or withheld a worker’s salary, even after the IDOL investigation discovered the wrongdoing. In several cases of private lawsuits under the Minimum Wage Act, courts ruled the neither the employees, nor the IDOL could collect penalties.

The current law gives the Director of Labor the authority to subpoena the books, payroll records and other evidence from a company being investigated. If the employer’s actions of withholding or delaying payment are found to be repeated, intentional or completely without regard to the law, IDOL can asses up to 20% as a penalty.

SB 2339 also allows workers who have recovered back pay in a private lawsuit to collect 2% penalties per month on those earnings.

For companies that ignore the demand to pay employees their earned wages, the IDOL can assess a penalty of 1% penalty per calendar day.

SB 2339 was sponsored by two Chicago Democrats, State Senator Miguel del Valle and State Representative William Delgado.

Representative Delgado made the following comments, “I would like to thank Governor Blagojevich for signing this legislation, and for his consistency in helping working families get ahead. Thanks to laws like this, Illinois is a leader when it comes to helping working men and women seek employment with decent wages.”

IDOL Director Art Ludwig said, “Unlawful employers take advantage of workers by holding back wages, thinking that there will be no consequences. The Department will use these new enforcement powers to aggressively pursue uncooperative, unresponsive and unlawful [employers] to ensure [that] workers receive the wages they’ve earned. We remain committed to protecting the rights and wages of workers in Illinois.”

Employers should be prepared for even more minimum wage changes in 2008. Illinois, Michigan, West Virginia and Kentucky each have minimum wage changes on the books that will take effect on July 1, 2008.

The Illinois minimum wage increases from $7.50 to $7.75 on July 1, 2008. This 25 cent increase is the most recent in a series of minimum wage increases under Illinois Governor Rod Blagojevich. Another increase is scheduled for July 1, 2009, which will bring the Illinois minimum wage to $8.00 per hour.

The Michigan minimum wage will increase by 25 cents, from $7.15 to $7.40 per hour on July 1, 2008. Michigan has also seen a series of minimum wage increases in recent years. The Michigan increase is controversial, because the state has struggled with higher unemployment for the past two years. Michigan has lost a number of high-profile employers in recent years to neighboring Indiana, where the state minimum wage is lower, currently at $5.85 per hour.

In West Virginia, the minimum wage will increase a whopping 70 cents per hour on July 1, 2008, from $6.55 per hour to $7.25 per hour.

The Kentucky minimum wage will also increase by 70 cents, from $5.85 to $6.55 per hour on July 1, 2008.

The federal minimum wage will increase on July 24, 2008, from $5.85 to $6.55 per hour. The federal minimum wage covers the employees of businesses engaged in interstate commerce or companies with annual earnings over $500,000. Most employers in the U.S. are covered under the federal law.

The federal minimum wage may apply to individual employees as well as businesses. For example, a worker whose job entails answering out-of-state calls qualifies for the federal minimum wage. A worker who ships packages across state lines would also qualify.

If the federal and state minimum wage laws differ, the employee is entitled to whichever provides the greater benefit.

In addition, a number of states will increase the state minimum wage on July 24, 2008 when the federal minimum wage increases. In most of these states, the minimum wage statute doesn’t mention a dollar amount. Instead, it simply extends the federal minimum wage coverage to smaller employers, and ties the state rate to the federal rate.

The minimum wage in Indiana, Idaho, Maryland, North Carolina, North Dakota, Oklahoma, South Dakota, Texas, Utah, Virginia, Montana and Nebraska will increase to $6.55 per hour when the federal minimum wage increases on July 24, 2008.

In Ohio, the state rate will increase from $5.85 to $6.55 per hour on July 24, 2008. However, the change will affect only companies with an annual revenue less than $255,000. For other companies, the state minimum wage remains $7.00 per hour, as it has been since January 1, 2008.

There are three states where the increase in the federal rate will not affect the state minimum wage. In Georgia and Wyoming, the state minimum wage remains at $5.15 per hour. In Kansas, the state minimum wage remains at $2.65 per hour.

In addition, five states have no state minimum wage. Mississippi, Alabama, Louisiana, Tennessee and South Carolina have never implemented a state minimum wage. Most employers in those states are covered by the federal minimum wage.

On January 1, 2008, fourteen states increased the state minimum wage.

The federal minimum wage increased by 70 cents on July 24, 2007 under the Fair Minimum Wage Act of 2007.  The rate went from $5.15 to $5.85 per hour. This was the first increase in more than a decade. Two more increases are on the horizon. On July 24, 2008 the federal rate will increase by 70 cents to $6.55 per hour. Finally, on July 24, 2009, the federal rate will increase to $$.25 per hour. The increase amounts to an additional $1,456 per year for a full-time minimum wage worker.