labor lawAdivision of labor law center

 Missouri state law (Section 290.502.2) requires that the state’s minimum wage must be adjusted every year based on the latest cost of living.

In charge of making that change is the Director of the Department of Labor and Industrial Relations. Director Todd Smith said that in August of 2008, the Department predicted an increase of 40 cents for 2009/

“A review of the Consumer Price Index (CPI) for July 2008 confirms the Missouri minimum wage rate will increase to $7.05 effective January 1, 2009,” he predicted at the time.

That prediction has become a reality. The Missouri minimum wage, pegged to the cost of living, went up precisely 40 cents on January 1, 2009, increasing from $6.65 to $7.05 an hour. According to the Missouri Department of Labor and Industrial Relations, last year’s increase was a mere 15 cents per hour. The much higher rise in the cost of living has driven the dramatic increase in the Missouri minimum wage rate.

Those businesses that earn less than a half-million dollars annually (more…)

The Missouri minimum wage increases by 40 cents, from $6.65 to $7.05 per hour on January 1, 2009. The increase is larger than in previous years due to the high rate of inflation for the previous 12 months.

By contrast, last year’s increase was just 15 cents per hour according the Missouri Department of Labor and Industrial Relations.   Many pundits worry about the impact that such a large increase will have on smaller employers across the state. Especially when coupled with rising prices and declining sales, the 2009 Missouri minimum wage increase is a bitter pill for many employers to swallow.

“In August, the Department released preliminary data projecting (more…)

On January 1, 2008, Missouri, along with over a dozen other states, increased its state minimum wage. Missouri’s minimum wage jumped 15 cents per hour from $6.50 to $6.65.

Missouri state statute, Section 290.502.2, mandates that the Director of the Department of Labor and Industrial Relations adjust the state minimum wage according to the change in the cost of living. Published by the Department of Labor, the CPI (Consumer Price Index for Urban Wage Earners and Clerical Workers) serves as the basis for calculating the new rate. Note that Missouri is one of the few states that allow the minimum wage to go down. If the cost of living goes down, the state minimum wage goes down, too.

Retail or services businesses with annual earnings of less than $500,000 are exempt from the Missouri state minimum wage law. For companies that deal in interstate commerce, the workers are covered by the federal minimum wage law.

Belo plans, which pay workers a set amount per week no matter the number of hours worked, are not allowed in Missouri. Belo plans, also known as the fluctuating work week, are normally used in businesses where hours vary by the season. Golf courses and ski resorts are examples of industries that use Belo plans. Though Belo plans a legal under federal law and legal in most states, they are not legal in Missouri.

The majority of  states in the country have enacted state minimum wage laws. If an employee qualifies for both the federal minimum wage of $5.85 per hour, and the state minimum wage, the worker receives whichever provides the greater benefit. In Missouri, these employees would receive the higher Missouri state minimum wage of $6.65 per hour.

In all, fourteen states increased the minimum wage with the new year.

Employees in Missouri are entitled by state law to be paid overtime for any time worked over 40 hours in one week. Though mandated by law, the Missouri Department of Labor and Industrial Relations has no branch to enforce payment of overtime. If the employee isn’t receiving overtime pay, he or she must file suit against the employer.

California, Massachusetts, Vermont, and eleven other states increased their state minimum wage on January 1, 2008, but more wage increases are slated for 2008.

On July 1, 2008, five states will raise their minimum wage rates. Michigan’s minimum will jump 25 cents from $7.15 to $7.40 per hour. Illinois will see a 25 cent rise as well, from $7.50 per hour to $7.75 per hour.

West Virginia, Kentucky and Pennsylvania will see substantial increases in their state minimum wages on July 1, 2008, too. Pennsylvania’s minimum will rise 90 cents from $6.25 per hour to $7.15 per hour. Both Kentucky and West Virginia will establish minimum wage raises of 70 cents. West Virginia’s rate will go from $6.55 to $7.25 per hour. Kentucky’s minimum will rise from $5.85 to $6.55 per hour.

Kentucky’s rise mirrors the federal minimum wage rate which will go from $5.85 to $6.55 per hour on July 24, 2008.

The year 2007 saw the first federal minimum wage increase in more than a decade under the Fair Minimum Wage Act of 2007.

On July 24, 2008, the second step of the Act’s system will go into effect and the federal minimum wage will increase from $5.85 to $6.55 per hour.

A number of states, such as Maryland, Indiana and Virginia, will increase their state minimum wage rates on the same day the federal minimum increase goes into effect. These states either mirror the federal rate, or tie their increases to timing of the raises for the federal minimum.

The District of Columbia ties its minimum wage to the federal wage, too, but with a difference. In D.C., the minimum wage is required to be at least $1.00 per hour greater than the federal minimum. On July 24, 2008, then, D.C.’s minimum will jump to $7.55 per hour.

More than a dozen U.S. states will increase the minimum wage with the new year, including Missouri. The Missouri minimum wage will increase 15 cents from $6.50 to $6.65 per hour on January 1, 2008.

Section 290.502.2 of the state statutes requires the Director of the Department of Labor and Industrial Relations to measure the increase or decrease of the cost of living as of the previous July, and adjust the state minimum wage accordingly. The new rate is based on the CPI, the Consumer Price Index for Urban Wage Earners and Clerical Workers published by the U.S. Department of Labor.

Missouri is one of the very few states that allows for the minimum wage to be decreased, if the cost of living goes down.

The Missouri law does exempt retail or services businesses with gross revenues of less than $500,000 per year. However, if these businesses engage in interstate commerce, many employees will be covered under the federal minimum wage law.

The state law also requires that employers pay overtime after 40 hours per week. However, the Missouri Department of Labor and Industrial Relations doesn’t have an enforcement branch. Instead, employees who are being paid too little must bring suit against the employer.

Missouri’s minimum wage is higher than the  federal minimum wage, which is currently $5.85. Many states have minimum wage laws, too. When both laws apply, the one which provides the best deal for the worker is the law to use.

The Missouri minimum wage and overtime law does not allow the fluctuating work week, or Belo plan, for employees. Under this plan, employees are paid a set amount for a standard workweek, which may be more or less than 40 hours. Many employees object to Belo plans, because they result in the employee getting a smaller overtime premium when they work more. Belo plans are used in other states in industries like ski resorts and golf courses where the hours vary seasonally. They are legal under federal law and in most states. However, they are not legal in Missouri. 

Montana’s state minimum wage will be $6.25 per hour as of January 1, 2008. Some employers–those with $110,000 or less gross revenue–can legally pay only $4.00 per hour.

Large businesses in Minnesota pay workers the state minimum of $6.15 per hour. Smaller companies, those that bring in less than $625,000 per year in revenue, only pay $5.25 per hour.

Consider Kansas with a minimum wage of $2.65. If an employee is covered by state and federal law, clearly the federal minimum of $5.85 gives the worker more money, thus a bigger benefit. The federal minimum would apply.

In addition to differences from the federal minimum wage law, several states have written some unusual conditions into their state minimum wage statutes.

Agricultural workers in Massachusetts can legally be paid a mere $1.60 per year. Employees who also earn tips have a legal minimum of $2.63. The rest of the industries, however, pay one of the top five highest minimum wages in the country, $8.00 per hour as of the year 2008.

Washington will take the top spot with $8.07 per hour on January 1, 2008.

Maryland has a state minimum wage of $6.15, but it doesn’t apply to part-time employees over 61 and under 16. The exclusion applies to younger workers who work up to 20 hours per week and to the over 61 age group who work up to 25 hours per week. Some companies in Maryland, including amusement parks, hotels and restaurants, don’t have to pay overtime either.

School bus drivers in Alaska benefit from the quirks of their state minimum wage law. The minimum wage is $7.15 per hour, and the law demands that bus drivers receive wages of $14.30 per hour, or twice the minimum. 

Employers in Missouri, it seems that your Missouri minimum wage situation continues to change every week, ever since the new Missouri minimum wage went into effect this past January 1. Remember, it all started when the voters of the Show Me State decided last November, by a rather wise margin, that the Missouri minimum wage should be raised from the current federal minimum wage of $5.15 per hour to $6.50 per hour. That part of the new Missouri minimum wage law seemed to make sense, but then what happened after that did not make a lot of sense for a lot of employers, employees, government officials, the governor, law makers, and basically any and everyone else who has a stake in Missouri employment or who has been following the situation—like us.

But a new court decision might put the final say to the issue—at least when it comes to what employers should be paying their tipped employees. The new court decision might not please these employers, though, because basically the court said that they would owe their tipped employees back pay to all of their tipped employees all the way back to January 1 if they had not been paying those tipped worker half of the Missouri minimum wage of $3.25 per hour.

The decision comes on the heels of all that debate that took place in Missouri these past few months, when the Department of Labor had said the employers of the state could pay their tipped employees just $2.13 per hour, or half of the federal minimum wage and the old Missouri minimum wage. But then labor law lawyers and the governor came out and said that the employers should be paying the full half of the new Missouri minimum wage.

Restaurant owners sued in hopes that the courts could decide the matter, and the courts have decided on it. All employers who bring in more than $500,000 per year in gross sales must now pay their tipped employees at least $3.25 per hour, and more if the employees’ tips do not make up the difference between that rate and the regular Missouri minimum wage of $6.50 per hour. This new tipped employee minimum wage went into effect this past January 1, when the whole new Missouri minimum wage went into effect, according to the court. That means that if you have not been paying that $3.25 per hour rate since January to your tipped employees, you will need to cut them a check to make up the difference.

But, Missouri employers, make sure to check your receipts before you do anything. One of the things that is clear about the new Missouri minimum wage law is that it only affects those employers making more than half a million in revenues every year. If you bring in less than that $500,000 per year cut off point, then you are exempt from the Missouri minimum wage law.

One of the issues to consider, though, is that this issue is not over yet. According to my sources, the lawyer for the restaurant owners has said in public that they plan to appeal the decision, so the courts could come back on another level and decide that the decision should be reversed.

In the meantime, employers, you should probably talk to your lawyer about what you should do with the tipped employee minimum wage. One thing to note, as well, is that the Department of Labor has set up on its Web site a form section where employees can file Missouri minimum wage complaints if they feel disgruntled about the issue.