July 1, 2008 Minimum Wage Increases in 5 States

July 1st, 2008 Posted by Amelia

Five states increased their minimum wages effective July 1, 2008. They include: , , , and .

 

In Illinois, the increased 25 cents from $7.50 to $7.75 per hour. This is the second step in a 3-tiered . The 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 also increased 25 cents per hour from $7.15 to $7.40.  The 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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Michigan Minimum Wage Increases to $7.40 on July 1, 2008

June 9th, 2008 Posted by Amelia

On July 1, 2008, the Michigan will be increased by 25 cents, from $7.15 per hour to $7.40 per hour.

 

All overtime and minimum wage laws are enforced by Division of the Department of Labor and Economic Growth. The minimum wage in has risen nearly two dollars since 2005, despite relatively high unemployment.

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Michigan Minimum Wage Will Increase to $7.40 in July

April 18th, 2008 Posted by Amelia

The Michigan will by 25 cents from $7.15 to $7.40 per hour on July 1, 2008. The wage for tipped workers, however, remains at $2.65 per hour.

Governor Jennifer Granholm has been the force behind the minimum wage increases, bringing the rate from $5.15 per hour in 2005 to $7.40 as of July 2008. Unfortunately, the economy has lagged since 2004, and critics are concerned that these increases are making the problem worse.

Michigan’s jobless rate is still quite high, because several manufacturers have moved their plants to Indiana where the is $5.85 per hour. Even when the Indiana minimum wage goes up on July 24, 2008, to $6.55, Michigan’s minimum will still be 85 cents per hour higher.

In addition, a major car manufacturer recently offered early retirement to almost every hourly worker. With those workers retired, the car company will hire new employees at around half of the salary for current workers.

When an is covered by both the minimum and the minimum, the worker is entitled to whichever is higher. is higher than the federal rate, so almost every in Michigan is entitled to the state minimum wage.

Michigan employees who earn tips haven’t seen an increase in their minimum wage for a couple of years. Currently, their minimum wage is $2.65 per hour. After July 1, 2008, tipped employees who declare at least $4.75 per hour, can be paid at the tipped rate. Otherwise, the employer must pay a high enough cash wage to equal the minimum wage, when added to tips. Overtime for tipped employees goes up to $6.35 per hour.

The state minimum wage covers each Michigan employer with 2 or more employees over the age of 16. Under both federal and state law, all workers who put in more than 40 hours per week are entitled to overtime pay at 1.5 times the usual hourly rate.

These minimum wage and overtime laws are enforced by the Michigan Wage and Hour Division of the Department of Labor and Economic Growth.

Michigan Comp Time

The Fair Labor Standards Act of 1938 (FLSA) requires companies to pay workers 1.5 time the usual hourly rate for any time worked over 40 hours in one week. Employers are specifically prohibited by FLSA from offering time off in the future (compensatory time or comp time) as a substitute for over time pay, even if the worker asks for “comp time”.

Non-profit organizations are the exception to the FLSA. They can grant comp time instead of overtime, but only if the employee agrees.

A few states, including Michigan, have enacted laws to allow companies to substitute comp time for overtime pay. The Michigan Minimum Wage Law of 1964 allows employers, in some cases, to grant comp time rather than pay overtime wages. The Michigan law applies to all employers with more than one worker over the age of 16.

Because the FLSA prohibits comp time, the Michigan law doesn’t apply to any business covered by the FLSA. Employers who want to understand their eligibility to grant comp time can consult MCL 408.384a (8) of the Michigan Compiled Laws.

Michigan companies not covered by FLSA may grant comp time instead of overtime pay, but only if the worker agrees to this practice in writing. According the Michigan Department of Labor and Economic Development, workers can not be “coerced, intimidated, or required as a condition of employment to accept compensatory time”.

Specific rules apply to granting comp time. Only employees who receive 10 paid days of leave each year are eligible for comp time. Workers who have less than 10 days paid leave must receive overtime pay.

Businesses must grant 1.5 hours of comp time for each hour of overtime, and keep detailed records of hours worked, comp time due to each worker, and when that time is used.

Employees can accrue comp time, but only up to 240 hours. Any time over that must be paid at the overtime rate. Employees may also request to be paid retroactively for overtime instead of taking comp time. The company must comply within 30 days, whether the request is verbal or written.

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More Minimum Wage Changes for 2008

February 22nd, 2008 Posted by Amelia

Employers should be prepared for even more minimum wage changes in 2008. , , and 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 is the most recent in a series of minimum wage increases under Illinois Governor Rod Blagojevich. Another is scheduled for July 1, 2009, which will bring the Illinois minimum wage to $8.00 per hour.

The 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 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 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 minimum wage will increase on July 24, 2008, from $5.85 to $6.55 per hour. The 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 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 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.

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Michigan Minimum Wage Details in the News

July 6th, 2007 Posted by Amelia

The new to the , which was effective on July 1 2007, includes important exceptions for young workers and for tipped workers. Under the current statute, tipped workers may be paid as little as $2.65 per hour. Workers under the age of 18 may be paid $6.08 per hour.

Because of recent changes to the law, it is vitally important that all employers update their poster. This is a legal requirement, even in businesses where every is paid more than the .

Despite the increase in the Michigan minimum wage, the hourly rate for tipped employees remains $2.65, a rate unchanged since 1964. In order to qualify for the $2.65 rate, employees must earn tips of $4.50 per hour or more. The tips must be reported in writing by the employee.

Effective July 1, 2007 the Michigan minimum wage increased by 20 cents, from $6.95 per hour to $7.15 per hour. This brings the total hike in the minimum wage to $2.00 in just 10 months, a 39% increase from $5.15 in September 2006 to the current rate. This compares to the rate increase for tipped employees over the same period, of 0%.

Under the current law, tipped employees working more than 40 hours per week are entitled to overtime pay at a rate of $6.225 per hour, provided they report at least $4.50 per hour in tips.

In either case, a written tip statement signed by the employee and dated before the paycheck was received must be completed. Employers are legally bound to retain payroll records, including tip statements. Employees are entitled to a higher rate of pay for any period during which they did not average at least $4.50 per hour in tips.

Repeated efforts in the state to increase the minimum wage for tipped employees have met with failure so far. In late 2006, Senate Minority Leader Bob Emerson, a Democrat from Flint, introduced State Senate Bill 1388. The bill would have completely eliminated the tip credit, effectively establishing the for tipped employees at the same rate as other employees.

A similar House bill would have established the tipped rate at $4.65 per hour, with an additional increase to $4.90 per hour on July 1, 2008. The bill would have permanently pegged the tipped rate at $2.50 less than the state minimum wage.

Even though both bills were supported by Michigan Governor Jennifer Granholm, it was defeated. Lobbying by the Michigan Restaurant Association was a major factor in the bill’s defeat. Despite that setback, Governor Granholm and legislative leaders have vowed to “finish the job” by reducing the tip credit and indexing the minimum wage to annual inflation.   

The current Michigan minimum wage statute was signed into law in March, 2006. The law permits workers under the age of 18 to be paid a rate equal to 85% of the minimum wage. Currently, that rate is 85% of the state minimum wage of $7.15 per hour, or $6.08 per hour. This is referred to as the “youth sub-minimum wage.”

The law also extends provisions that permit employers to grant compensatory time off – commonly called “comp time” – in lieu of paying overtime wages. However, the comp time provisions DO NOT apply to any employee or employer who is covered under the Fair Labor Standards Act (FLSA). This includes most of the employers in the state.

A wide variety of employers are covered under the FLSA, and therefore cannot give comp time in lieu of overtime…even at an employee’s request. These include any employer who produces goods for sale outside of Michigan, and any employer with annual gross revenue of more than $500,000.

Anyone who employs a domestic worker who is paid at least $50 per quarter or works more than 8 hours per week is specifically prohibited from giving comp time in lieu of overtime pay.

The law also prohibits comp time for workers employed in hospital or healthcare facilities, as preschool, elementary, secondary or college teachers, workers in the agricultural field, and those employed in federal, state or local governments.  

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