labor lawAdivision of labor law center

Most Tennessee employers must pay the new minimum wage of $7.25 per hour, effective July 24, 2009.

The federal minimum wage was established under the The Fair Labor Standards Act or FLSA in 1938. This law made sweeping changes to the workplace. At that time, children of all ages worked alongside adults in mills, farms and factories, sometimes as many as 60 hours a week. The FLSA established child labor laws prohibiting children under the age of 14 from working in almost every job.

Another effect of the FLSA was the establishment of the federal minimum wage. On July 24, 2009, the federal minimum increased 70 cents from $6.55 to $7.25 per hour. This increase affected most of the employers in Tennessee because the state has no minimum wage law.

Under the FLSA, to be eligible for federal minimum wage, an employee must work for a company that earns at least $500,000 per year. FLSA also covers businesses that engage in interstate commerce. Individual workers engaged in interstate commerce are covered by FLSA, too.

For example, a buyer contacting an out-of-state vendor via email or (more…)

A two-year investigation recently revealed that a tree-trimming company had violated federal and Tennessee minimum wage laws. The investigation was triggered by a dissatisfied employee alerting the Dept. of Labor. This resulted in ABC Professional Tree Services being ordered to pay $1.8 million in overtime pay, to 2,501 employees.
The minimum wage by workers covered by the Fair Labor Standards Act is $5.15 per hour. This covers a basic 40 hour week. If an employee is required to work for more than 40 hours per week, they are then entitled to time-and-one-half for each hour over.

The investigation took place over two years, from August 2004 to August 2006. It was found that ABC Professional Tree Services had fallen foul to the federal Fair Labor Standards Act, as well as violating minimum wage laws throughout 16 states.

The company is currently paying a total of $1,801,507 to employees in Florida, Tennessee, Arkansas, Mississippi, Georgia, Louisiana, North Caroline, Tennessee, South Carolina, New Jersey, Cincinnati, Ohio, Virginia, Maryland and New Jersey, according to the US Dept of Law.

“We are pleased that we wee able to help these workers get the back pay they deserve,” Elaine L. Chao, the U.S. Secretary of Labor said. “The department will continue our efforts to ensure that employers are paying workers properly,” she went on to say.

ABC Professional Tree Services provides utilities with tree cutting and trimming services, clearing branches from around power lines. It also specializes in clear up operations after natural disasters. They were involved with clearing up after Hurricane Katrina, and a portion of the $1.8 million will go to workers in this area.

US Attorneys in various states cooperated with the US Dept of Labor in 2006, to investigate and bring to prosecution companies who violated employment laws in the Gulf Coast region. The task force concentrated on areas affected by Hurricane Katrina, Hurricane Rita and other hurricane affected areas.

So what does all this political maneuvering mean for you and me (considering that you are a Tennessee employer)? Well, it does not mean much at the moment. The state of affairs in Tennessee will remain static on he state minimum wage level for at least until the start of 2008, when the Democrats take up the minimum wage issue again next session. There will be no need to get yourself a Tennessee minimum wage poster just yet.

But there could be soon a sudden shift for how some of us Tennessee employers have to pay our employees a minimum wage. As the situation is now, Tennessee does not have its own minimum wage. So what I mean by “some of us” are those employers who are currently liable to follow the Fair Labor Standards Act and thus must pay the federal minimum wage. Those folks among us could soon be seeing a big sea change in the way they do business. That is because the Democrats in Capitol Hill are moving forward with their attempts to get the federal minimum wage passed (more on that to follow).

What matters is now that you know whether or not you are one of those Tennessee employers who are liable for the federal minimum wage. I am sure at this juncture of your business you know, or your human resource team or accountants know, whether or not you are liable for the Fair Labor Standards Act. But just in case you are curious or in doubt, let me review the guidelines (generally speaking) here again for the 1,001 time.

Those employers liable for the FLSA include those that bring in more than $500,000 in revenue per year—so called enterprise companies. Also, you must pay the federal minimum wage to any employee who works on an interstate basis for you, including selling to clients in other states besides just traveling or being located in other states.

It had just been on Monday that the Tennessee minimum wage bill had passed the House by the vote of 59 to 37. That vote had come with the debate that Jackson was talking about, along with Republican attempts to skipper the bill and add amendments to it that would have watered it down. The voting went pretty much along party lines, with all the no votes coming Republicans, and all he yes votes coming from Democrats, with seven Republicans voted yes as well.

The new Tennessee minimum wage would have allowed the state to adopt whatever the federal minimum wage is. At the moment, that would make the Tennessee minimum wage $5.15 per hour. The Tennessee minimum wage would have changed whenever the federal minimum wage would have changed. So for instance, if the federal minimum wage bill eventually gets passed in the Capitol Hill halls, then the Tennessee minimum wage would have followed that same three part increase over the course of the next two years.

The first change, to both the federal minimum wage and the Tennessee minimum wage, would have come 60 days after the president would have signed the federal minimum wage into law. That change would take the minimum wages from $5.15 per hour to $5.85 per hour. A year after that, both minimum wages would then have increased from that level of $5.85 per hour to the next level of $6.50 per hour. Go ahead another year, and the federal minimum wage and the Tennessee minimum wage would see another increase, from $6.50 per hour to $7.25 per hour. That would take us into 2009.

In the event that the federal minimum wage did not change now, or in the next five years, the Tennessee minimum wage bill had a provision built in that would increase the Tennessee minimum wage on its own—by the rate of the cost of living over the last five years.

There was big talk in Tennessee a couple weeks ago, or was it even just last week? But now that big talk—about how the state legislature there was going to pass a new Tennessee minimum wage where now there is none—has not seemed to led to any big action on the part of the law makers. Instead, the bill that would have given the Tennessee employers a new minimum wage to pay their employees got put on the shelf for next year’s session in the legislature.

The bill’s sponsor in the Senate was in fact the man who decided to put the bill to bed for the rest of the year. His name is Sen. Doug Jackson, a Democrat from Dickson, Tennessee. He had the bad feeling, according to my sources—his actual political words were that he was “not optimistic”—about the Tennessee minimum wage bill getting passed in the Senate. If you remember all of the talk last week, it was about how the bill had been passed already in the House.

The difference, said Jackson, was that the Senate is largely controlled by the Republicans in the state of Tennessee. There would have been a vote on the Tennessee minimum wage bill in the Senate this past Wednesday, but instead of kill the bill with a bad vote, the Democratic leadership put it away for a compromise another day. Jackson has said that the next vote in the Senate on the Tennessee minimum wage bill could come as early as next year when the next session of this General Assembly gets started in 2008.

Jackson’s stated reason for doing so, besides his lack of optimism, was that he had a feeling that the Republicans would have just let the bill die quietly in the Senate. Instead, he says, if the bill will not get passed next year, he at least wants there to be a debate and public discussion about a new Tennessee minimum wage,