labor lawAdivision of labor law center

Roughly a dozen states in the U.S. base their annual minimum wage rate hikes on regional inflation levels.

The state of Oregon is one of these. Because Oregon’s cost of living increased by a dramatic 5.37% between August 2007 and August 2008, the minimum wage rate also increased significantly.

The minimum wage went up 45 cents an hour on January 1, 2009, from $7.95 to $8.40 hourly. The increase is one of the largest such hikes in recent years, and results from the inflation rate.

“This increase is the direct result of the rapidly rising cost of living facing Oregon workers,” said Labor Commissioner Brad Avakian. The Commissioner added, “By helping workers and their families preserve their purchasing power in difficult times, our strong minimum wage law also benefits our local economies, where workers spend most of their paychecks.”

Some question the wisdom of a large increase during recessionary times. The law, however, was (more…)

On January 1, 2009 the Oregon minimum wage will increase from $7.95 to $8.40 per hour. The increase of 45 cents is the largest in recent memory, spurred by high inflation in the past year.

State Labor Commissioner Brad Avakian announced the new rate on September 16, 2008.

The increase is based on the 5.37% increase in (more…)

Labor Commissioner Dan Gardner announced an increase in Oregon’s state minimum wage on September 16, 2007. That increase went into effect on January 1, 2008, bringing the Oregon state minimum wage up 15 cents to $7.95 per hour.

Prior to January 1 of this year, Oregon held the honor of second-highest state minimum wage in the country. With the New Year increase, however, Oregon dropped to fourth place behind California and Massachusetts, which are tied for second at $8.00 per hour. Top honors go to Washington’s state minimum wage of $8.07 per hour.

Changes to Oregon’s state minimum wage are enacted on the first day of each year. The increases are calculated using the CPI (Consumer Price Index) inflation rate and rounding up to the nearest nickel.

In 2002, the Labor Commissioner led the effort to pass Ballot Measure 25 to legislate a cost of living increase in Oregon’s state minimum wage. Over 12 states followed Oregon’s lead and instituted minimum wage statutes which included cost-of-living increases.

Oregon voters began their minimum wage increase trend back in 1996. A measure to raise the minimum wage in 50 cents increments over two years, gave Oregon workers a total increase of $1.50 per hour. Measure 25 in 2002 established annual raises for the minimum wage and bumped the current minimum to $6.90 per hour.

Commissioner Gardner states that Oregon minimum wage workers are still at a disadvantage. An advocacy group for minimum wage workers, the Oregon Center for Public Policy, reported that over the previous three years, the average pay raise was 1% for wages in the 25 lowest-paying industries. Conversely, the average pay raise in the 25 highest-paying industries ranked at 10% for the same time period.

Oregon employers needing more information can turn to BOLI, Oregon’s state Bureau of Labor and Industry. BOLI recommends all Oregon employers, supervisors, managers and human resource professionals attend BOLI’s Technical Assistance seminars. The state of Oregon declares “BOLI seminars are acclaimed as an effective and proactive way to help keep your organization in compliance with labor laws — and out of court.”

January 1, 2008 saw an increase in state minimum wage for fourteen states, including Montana, Arizona, Iowa and Delaware and ten others. These raises, however, are just the first of many increases slated for 2008.

The first of these increases will occur on July 1, 2008. Three states will enjoy a substantial raise at this time. Kentucky will add 70 cents to its minimum resulting in a new rate of $6.55. West Virginia will also see a 70 cent bump, from $6.55 to $7.25 per hour. Employees in Pennsylvania, however, will see the biggest boost, a 90 cent jump from $6.25 to $7.15

Workers in Kentucky will receive a raise in minimum wage of $6.55 per hour, a bump of 70 cents from $5.85. A 70 cent raise will also be given to minimum wage employees in West Virginia resulting in a new rate of $7.25 per hour.

On May 24, 2006, President George W. Bush signed the Fair Minimum Wage Act of 2007 into law. This law set up increases in the federal minimum wage as a three-step system. On July 24, 2008, the second step of the Fair Minimum Wage Act’s system goes into effect. The federal minimum wage will go up from $5.85 to $6.55 per hour.

Minimum wage in the District of Columbia is also tied to the federal minimum wage. The D.C. law, however, requires its minimum to be at least $1.00 more than the federal rate. On July 24, 2008, therefore, D.C.’s minimum wage rate will become $7.55 per hour, exactly $1.00 greater than the federal minimum of $6.55 per hour.

Employers must be aware that when any labor laws change, either state or federal, they must update their labor law posters. For more information businesses can go to www.laborlawcenter.com.

On January 1, 2008 the Oregon state minimum wage will increase to $7.95 per hour. The increase was announced by Labor Commissioner Dan Gardner on September 16, 2007. This is a 15-cent increase from the state’s current rate of $7.80 per hour.

Oregon’s minimum wage is currently the second highest in the nation. However, on the first day of 2008 it will become the fourth highest in the nation, as the minimum wage in New York and Massachusetts increase to $8.00 per hour. On that same day, the minimum wage in Washington will increase to $8.07 per hour, once again making it the nation’s highest.

“Oregon’s minimum wage law makes sure these workers’ wages keep pace with [the] rising cost of living,” Labor Commissioner Dan Gardner said.

The Labor Commissioner was instrumental in leading the successful 2002 effort to pass Ballot Measure 25 and introduce a cost of living increase for the state’s minimum wage. Many states have followed suits, and at least 12 states currently include cost-of-lving increases in their current minimum wage statutes.

The annual increases in the Oregon minimum wage are calculated based on the Consumper Price Index or CPI. The CPI inflation rate is rounded up to the nearest nickel, and the change goes into effect on the first day of each year.

The current trend in Oregon minimum wage dates back to 1996, when voters approved a measure that increased the state minimum wage by $1.50 in three 50-cent increments spread over more than two years. In 2002, Measure 25 increased the sate minimum wage to $6.90 per hour, and implemented annual increases.

Every employer in the state must prominently display an updated Oregon minimum wage poster. Posters are available at www.laborlawcenter.com.

According to Commissioner Gardner, minimum wage workers in Oregon are still disadvantaged. The Oregon Center for Public Policy, an advocacy group for minimum wage workers, reports that wages in the 25 lowest-paying industries, the average pay raise was just 1% over the past three years. By contrast, in the 25 highest-paying industries, the average pay raise was 10% over the same period.

For employers who would like more information on the Oregon labor laws including the state minimum wage law, BOLI, the state Bureau of Labor and Industry, offers quality Technical Assistance seminars. BOLI recommends these seminars for all Oregon employers, supervisors, managers and human resource professionals. At them, BOLI trainers work closely with bureau enforcement divisions to present up-to-date information. According to the state of Oregon, “BOLI seminars are acclaimed as an effective and proactive way to help keep your organization in compliance with labor laws — and out of court.” A schedule of seminar fees can be found here.

Wage and Hours seminars will be conducted in Portland on December 11, and in Salem at Roth’s Hospitality Center on December 12. A seminar on state leave laws is scheduled for December 13 in Portland, and a seminar on recordkeeping for employers is scheduled for December 18 in Portland. All of the Portland events are held at the State Office Building.

In Addition, on December 5 and 6, BOLI sponsors the stat’s 23^rd Annual Employment Law Conference in Portland at the Oregon Convention Center.

Oregon is not the only state that will roll out a minimum wage increase on January 1, 2008. At least 14 states in total will introduce increases. This ranges from a 15-cent cost of living increase in Missouri, to 50-cent increases in Delaware, New York and Massachusetts. Florida’s minimum wage will increase from $6.65 per hour to $6.79 per hour, while the rate in Iowa increases a whopping $1.05 per hour, from $6.20 to $7.25. 

So Oregon has a higher minimum wage than the federal minimum wage, current and with the proposed minimum wage increase, and it has its own variations on the themes of the tip credit and the inflation index. So will it matter to employers in the state if and when the federal minimum wage increases. No, is the short answer.

Getting back to that PNC survey that I cannot seem to stop talking about, the reason that many of the employers in the states of Pennsylvania, New Jersey, and Maryland, and the District of Columbia, all suggested that the federal minimum wage increase will not greatly affect them or not affect them at all in the next six months is because most of them were already paying their employees a higher wage than what the federal minimum wage would be.

That could be because they just pay their employees a competitive rate, or it could also be because—and this is what the authors of the PNC survey speculated—the state minimum wages in those individual states was already higher than what the federal minimum wage is bound to become. And such is the case in the state of Oregon. The Oregon minimum wage is higher than the federal minimum wage currently and it will continue to be higher than the federal minimum wage through the federal minimum wage’s three increases over the next two years, assuming the federal minimum wage bill becomes a law soon.

That does not even take into account the fact that Oregon’s minimum wage will continue to increase every year as well, because it is tied to the inflation index. The result is that Oregon employers will mainly need to concern themselves with the federal minimum wage developments because they will need to get themselves the new federal minimum wage poster when it comes out.