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.
Wal-Mart Stores, Inc., (Wal-Mart) has been found in violation of federal and Missouri overtime laws, according to a recent announcement from the US Department of Labor (DOL). The violation will cost Wal-Mart more than $33 million.
Missouri overtime laws are similar to those sanctioned by the DOL Fair Labor Standards Act (FLSA). The violation of these laws has occurred as a result of the computational methods Wal-Mart used when calculating overtime wages for its workers during the period of time ranging from February 1, 2002, until January 19, 2007. More than 86,680 employees will receive court-ordered restitution.
Both the FLSA and the Missouri minimum wage requirements recognize a standard work week as 40 hours on the job. Any time spent on the job in excess of the standard 40 hours is considered overtime and the employee’s rate of pay must be adjusted accordingly. Overtime pay is calculated as 1.5 times the regular rate of pay.
Using a $6.00 per hour base rate of pay as an example, an employee’s overtime rate of pay would be $9.00 (or $6.00 times 1.5). Wal-Mart, however, frequently pays incentive and other premium payments that might boost this same employee’s typical rate of pay to $7.00 per hour. In this example, the legal rate of pay for overtime hours must be calculated at $10.50 (or $7.00 times 1.5).
The recent ruling in US District Court cites Wal-Mart as being in violation of these federal and Missouri minimum wage laws by computing overtime pay on only the base pay rate, before any regular premium payments are included. In an effort to prevent future violations of a similar nature, Wal-Mart must pay the unpaid overtime amount plus accrued interest to its employees.
The court order is a result of a complaint filed by the DOL on behalf of Wal-Mart employees. It was quickly approved in court.
There are two stories on this blog that have been competing for the most attention seemingly in the last few months are the ever present federal minimum wage issue, and the Missouri minimum wage issue. The former case—the federal minimum wage issue—seems to have been settled last week when President Bush signed the first increase to the federal minimum wage in 10 years. We have been discussing how the change to the federal minimum wage will affect employers in each of the states, and I will continue to do that in a bit.
But in the meantime, there is this issue of the Missouri minimum wage, which has not been rectified just yet. Sure, I reported on the court case last week where restaurant owners were trying to get a decision made on the Missouri tipped employee minimum wage. The court found for the state and the governor’s view that the tipped employee minimum wage in Missouri should be half of the current new Missouri minimum wage, or $6.50 divided by two, which is of course $3.25 per hour.
But the one issue with the Missouri minimum wage that is still not rectified is that whole one with the special overtime exemption for fire fighters and police officers. That issue came about because the new Missouri minimum wage law passed last November by the voters of the state did not include the special overtime provision, which creates a different set of standards for overtime for first responders, who often work more than the 40 hours per week or the 8 hour shifts per day. That left public employers seemingly having to pay these first responders by the regular overtime rule—after 40 hours of work a week—which meant perhaps millions in extra expenses.
The legislature did not resolve the issue before it broke off for the session a couple of weeks ago. So now the fire fighters and the police officers—and especially their employers—are awaiting a court ruling. Some of these first responders sued to have an injunction put on the new minimum wage law for their local government employers. That would mean that, back dated to last January 1, these employers would not be responsible for paying their fire fighters and police officers according to the new, standard overtime rules.
The reasoning according to my sources used by these employers is that they say that the Missouri Department of Labor incorrectly interpreted the Missouri minimum wage law passed last November to include public employers at the local community level. They also claim that the additional costs posed by the new Missouri minimum wage law are unconstitutional unless the state gives them money to help pay for them. It adds that local towns and counties should not have to follow the new Missouri minimum wage law, because these towns and counties have chartered forms of government that make such a move unconstitutional.
The Attorney General for the state says that the language in the new Missouri minimum wage law did not make any sort of exception for towns, counties, and other local governments, and that the whole issue of state funding for the new overtime rules does not have to happen when a law is created through the ballot.
The lawsuit seems to be not moving much in the moment, so it could be a little wait before we have any sort of answer on this. Also, there was talk of the governor of the state, Gov. Matt Blunt, calling a special session of the legislature to handle this issue, according to my sources, the governor is not considering such a move. Another option would be for local employers to cut the hours and staff of their fire fighters and cops, or raise local taxes.
If you are a salaried employee, how do you know if you are entitled to overtime? It depends on a number of factors, including your job duties and rate of pay.
A settlement was recently announced between Wal-Mart and the US Department of Labor to address federal and Missouri minimum wage law violations. This agreement will pay $33 million to almost 87,000 employees. These employees are located in Missouri and across the nation.
This settlement addresses the main issue of how salaried interns, trainees, managers, and programmer trainees were paid by Wal-Mart. Although these employees were salaried, federal law states that they still may be entitled to overtime payments. According to the US Department of Labor, Wal-Mart employees who had to work long hours but were paid little money were actually “non-exempt salaried.” What this means is that these employees, although salaried, were still entitled to overtime compensation.
The settlement of federal and Missouri minimum wage law violations concerns how Wal-Mart paid certain employees, including interns, trainees, managers, and programmer trainees who were salaried employees. These employees often worked long hours for very little money. Federal law requires that workers who are considered salaried may still be eligible for overtime payments.
Whether they are eligible depends on the duties of their jobs. In some cases, employees are actually “non-exempt salaried” workers and therefore can receive overtime.
The case against Wal-Mart related to employees who had limited power to make decisions, had no employees to supervise, and yet still worked long hours. In some cases, the salaries of these employees were much less that $23,660.
Employees often think that salaried workers cannot receive overtime, but that is not true. The way the guidelines work is that if an employee is paid $23,660 a year or less, they should be paid overtime for work they do beyond 40 hours a week. Under these guidelines, employees earning less than $455 a week can receive overtime.
Missouri has your pretty standard basic overtime labor laws—until you start reading a little deeper into the law. Then you discover an interesting difference or two between the Missouri law and the laws of other states, as well as the federal guidelines on overtime pay, which can be found in the Fair Labor Standards Act.
But first let’s look at the similarities between Missouri’s law and the others. Missouri’s overtime labor law is based for the most part and for most occupations on the standard 40 hour work week. That means that any employee who works more than 40 hours in a week is entitled to premium pay—at least one and a half times their normal wage—for all that time over 40 hours. This law matches the rule in the Fair Labor Standards Act, or FLSA for short.
Basically, the Missouri law defers to the federal law when it comes to exceptions to the overtime law. That means that employees who receive salaries generally are excluded from receiving overtime. This is not always the case, but a good general guideline. This includes people considered to be bona fide professionals, executives and administrators.
Where Missouri’s law gets interesting, though, is another group of employees that it singles out for special treatment. These special employees are people who work at amusement or recreation-type businesses. For these folks, the law states that their work week is not 40 hours. It’s 52 hours in a week.
So they do not receive overtime, or are not legally mandated to receive it at least, until after they put in their 52 hours in the week. In that case, they would still earn the standard premium pay due to overtime hours, which as we discussed before, is one and a half times their normal rate for all time spent working over those 52 hours.