labor lawAdivision of labor law center

When the federal minimum wage increased from $6.55 per hour to $7.25 on July 24, 2009, most employers in South Carolina were affected.

South Carolina doesn’t have a state minimum wage. In fact, if a South Carolina employee is not eligible for the federal minimum wage, he or she can legally be paid a mere $1.00 per hour or less. Due to use of the Internet and credit cards, though, most employees in South Carolina are entitled to the federal minimum wage.

The Fair Labor Standards Act of 1938 is the relevant law for the federal minimum wage. This law applies to employers with annual revenue of $500,000 or more and to employers engaged in interstate commerce.

Interstate commerce is defined as any business that takes place across state lines. The Internet, email, answering out -of-state phone calls, shipping packages to other states all qualify as interstate commerce, so most employers in South Carolina and throughout the US (more…)

My point, you ask? I actually had a point? Yes, as always, my loyal readers, there is a reason that you are reading my blog, instead of, say, sleeping or eating a donut. I am here to pass along some valuable information to the employers of South Carolina. You will soon probably be facing a change in the way that you have to pay your employees.

That is because the federal minimum wage is your de factor minimum wage, meaning for most of you in South Carolina, the federal minimum wage is the one that you must know and love. We went into it a whole bunch a few log posts ago on what makes an employer liable to follow the Fair Labor Standards Act, so I won’t get into that all again.

But what I will say is that the federal minimum wage change could be a reality soon, and that would mean that every South Carolina employer that must follow the Fair Labor Standards Act would have to follow the new changes to the federal minimum wage.

All employers in the state would be required to get a new updated federal minimum wage poster. That would be a definite result of any law change in Washington DC. But a good many of you would also need to pay what that federal minimum wage poster says, including the three increases over the course of the next two years. The first of which is set to occur 60 days if and when the president signs the federal minimum wage bill into law. That first change is up to $5.85 per hour. A year after that in 2008, the next federal minimum wage increase would be to $6.50 per hour. A year after that, the next federal minimum wage increase—to $7.25 per hour.

So if you are a South Carolina employer and liable to follow the Fair Labor Standards Act, you are currently paying your employees at least the current federal minimum wage of $5.15. As I said, South Carolina is one of those handful of states that do not have their own state minimum wage. And unlike such states as Alabama and Tennessee, South Carolina has not had a push to change the state of things there.

As we talked about last month, there was a state representative in the state of Alabama that tried to pass a bill in that state’s legislature that would have created a new Alabama minimum wage law. That move failed to get out of committee in the legislature, although I probably should check back on that situation to make sure. Last I heard from my sources down there, the state legislature had basically killed that new Alabama minimum wage bill in that committee, but there is a slight chance that it might have made its way to a full vote in the Alabama House. I doubt it, but it is worth looking into. I will, and will get back to you with the answer.

The other state in question was Tennessee, which we just talked about a few days back. In Tennessee, there is a similar bill in the state legislature that would raise the state minimum wage there, and that’s an issue that is still developing. Word is in Tennessee, the bills might have a chance of making it out of the two houses of the legislature, tying a new Tennessee minimum wage to the federal minimum wage. And then there would be one fewer state with no state minimum wage. South Carolina, however, is not leaving that group just yet, and that was my whole point.

I’m going to try to take the lull in the news on the minimum wage front to continue my alphabetical review of all of the different things that have changed in states across the country. Old news is still good news. Unless of course, there is no news at all to report. And that brings me to the next state in our review—South Carolina.

South Carolina is like that handful of other states that we have talked about before that have no state minimum wage law to speak of. That means that the employers in these states are required to follow the federal Fair Labor Standards Act, if they are liable to follow these federal wage and hour guidelines. What, you don’t remember how you can decide whether or not you are liable to follow the Fair Labor Standards Act?

Well, there a couple major qualifiers for the Fair Labor Standards Act. The first biggie is the amount of revenue your company brings in during the year. If your company earns more than $500,000 in a year, then you are liable to follow these federal wage and hour laws, and in that case in South Carolina you would be required to pay your employees the current federal minimum wage of $5.15. And as we all know, too, that federal minimum wage could possibly be changed soon.

The other major determining factor for the Fair Labor Standards Act is if you are an interstate employer. That means basically that you have other offices in other states besides South Carolina, or if you have salesmen that operate in other states. It could be also that you have customers in other states, or any other part of your business is outside of South Carolina.

There are a few other determinants to for the Fair Labor Standards Act, such as if you are a school or a hospital, in which cases the federal minimum wage would apply for all of them.

The Fair Standards Labor Act (FLSA) of 1938 was implemented to protect the rights of employees, so that an employer cannot pay an employee less than a set minimum wage. Yet, five of the states have no defined minimum wage, and an employer can legally hire people to work for something as little as a dollar an hour, if he can find someone willing to work for pittance. These states include Mississippi, Louisiana, South Carolina, Tennessee and Alabama.

The federal legislature regarding the minimum wage rate overrules the state laws or the lack thereof, when an enterprise generates more than $500,000 per year, or engages in inter-state commerce. If a business generates queries from another state, orders supplies from another state, or even if corresponds with out-of-state businesses or individuals, it is considered to be inter-state commerce.

Since there is no South Carolina minimum wage, the state’s lowest paid employees will benefit the most from the increase in federal minimum wage. The current bill will increment the federal minimum wage in three steps, increasing it by 70c each time. The first increase will come into effect 60 days after the president signs the bill, which will be in spring some time, increasing it from $5.15 per hour to $5.85 hour. Exactly a year later, the second increase will take place, taking the minimum wage rate to $6.55 per hour. The final increase will occur another year later, probably in 2009, when the minimum hourly wage will be increased to $7.25.

This wage increase will affect the whole country, but the people in the above-mentioned five states will arguably benefit the most from it. And considering the fact that these five states constitute ten percent of the whole country, it would be safe to assume that a large portion of American population will reap the rewards of this much-awaited reform.