labor lawAdivision of labor law center

The Wisconsin minimum wage is currently $7.25 per hour, the same as the federal minimum wage.

In 2006, both the federal and Wisconsin minimum wages were $5.15 per hour. At that point, the federal minimum wage had less purchasing power than the $1.60 per hour minimum in the 1960s. To address this issue, the Fair Minimum Wage Act or FMWA was enacted in 2007. The FMWA set forth a series of three increases to the federal minimum wage, beginning in 2007 and ending in 2009.

The third and last increase occurred on July 24, 2009 and bumped the federal minimum from $6.55 per hour to $7.25 per hour. This increase will have an effect on most employers in Wisconsin.

Wisconsin is one of 28 states that currently have a minimum wage equal to the federal minimum wage. Those states include Alaska, Delaware, Florida, Georgia, Indiana, New Hampshire, New York and Utah.

By contrast, there are 5 states with no minimum wage at all. Those states are Louisiana, Tennessee, Mississippi, South Carolina and Alabama. Kansas has the dubious distinction of being the state with the lowest minimum wage, at $2.65 per hour.

Employees in Wisconsin are entitled to the Wisconsin minimum wage unless they are covered under the Fair Labor Standards Act of 1938 (FLSA).

The FLSA is the relevant law for the federal minimum wage and applies to companies earning at least $500,000 per year, and to employers and individual employees engaged in interstate commerce.

Interstate commerce is defined as doing business with other states, such as manufacturing goods for sale out-of state, buying goods from out-of state, and answering phone calls from out-of-state vendors. In addition a company that uses the Internet or accepts credit card or debit card for payments is considered to be engaged in interstate commerce.

It is rare to find a business that does not engage in interstate commerce, therefore, most of the employers in all states need to pay their employees the federal minimum of $7.25 per hour.

In a business that does not engage in interstate commerce, it is possible (more…)

The Wisconsin minimum wage will increase 75 cents, from $6.50 to $7.25 per hour, on July 24, 2009.

Wisconsin employers must prominently display new federal and Wisconsin minimum wage posters or face stiff penalties.

The new Wisconsin minimum wage equals the federal minimum wage, which will increase by 70 cents to $7.25 on that date. By state statute, the Wisconsin minimum wage cannot be lower than the federal minimum wage.

The new Wisconsin minimum wage for minors is the same as for adults — $7.25 per hour. The change in the federal minimum wage effectively eliminates the state’s lower minimum wage for minors, which is $5.90 per hour prior to July 24, 2009.

However, the Wisconsin minimum wage contains a number of exceptions. First, the tipped minimum wage for Wisconsin employees remains at $2.33 per hour. Tipped employees who are not yet 20 years old and have been employed for 90 or fewer days may be paid $2.13 per hour. (more…)

Wal-Mart computed overtime pay for workers in Wisconsin and throughout the U.S. in a way that underpaid them, and did not comply with federal and Wisconsin overtime laws. That’s according to the U.S. Department of Labor, in its announcement that Wal-Mart has agreed to pay more than $33 million in back wages to 86,680 workers nationwide.

Wal-Mart, said the Labor Department, calculated overtime according to the “base rate” rather than the “average hourly compensation,” a larger number. The “base rate” does not include incentives and premiums. The “average hourly compensation” does. The Fair Labor Standards Act, or FLSA, requires that employers calculate overtime based on the “average hourly compensation.”

“This settlement provides $33 million in back wages, plus interest, to Wal-Mart workers,” said Assistant secretary of Labor for Employment Standards Victoria A. Lipinic, who added that the company “has taken corrective action to prevent this from happening again.”

Employees are legally entitled to an overtime pay equaling 1.5 times their usual pay –usually called “time-and-a-half.” And according to the FLSA and the Labor Department, that figure should be the “average hourly compensation.” For example, if the base rate is $6, and the rate with incentives and premiums – the “average hourly compensation” – is $7 an hour, overtime must be calculated using $7 an hour. Overtime is any time exceeding 40 hours in a workweek.

The agreement between the Labor Department and Wal-Mart covers the back wages for 86,860 workers for a nearly five-year period, from February 1, 2002 to January 19, 2007.

To back up the agreement, the Labor Department obtained a consent judgment against Wal-Mart ordering it to pay the back wages and forbidding it from similar violations in the future. The consent judgment was obtained by filing a complaint against Wal-Mart Stores, Inc., in U.S. District court.  The court’s consent judgment required Wal-Mart to pay the back wages and interest on the $33 million. 

As it stands now, however, Decker’s bill seems to be still working its way through the gears of politics in Wisconsin’s capital, so employers can feel somewhat content with the Wisconsin minimum wage as it stands now, as well as the Wisconsin minimum wage posters they have on their walls. Those still have the overall Wisconsin minimum wage rate at $6.50 per hour, as well as the Wisconsin minor employee minimum wage rate at $5.90 per hour, which is for workers under the age of 17.

For those workers who are so called “opportunity” workers in the state of Wisconsin—those employers under the age of 20 but not minors who have not yet workers 90 days on the job yet—their employers have a special Wisconsin minimum wage for them set at $5.90 per hour for those first 90 days.

Wisconsin also has a pretty high tip credit for employers of tipped employees, which sets the Wisconsin tipped employee minimum wage at the rate of $2.33 per hour—making the tip credit a total of $4.17 per hour. The tip credit for opportunity employees in the service industry is a little bit more. Their tipped employee minimum wage is set at $2.13 per hour. Of course, employers have to properly record the facts to show that their employees were bringing in enough tips to make up the difference and lift the employees’ hourly wage to at least the regular Wisconsin minimum wage.

All in all, if Decker’s bill does not go through, Wisconsin employers at the moment do not have to concern themselves with the goings in Washington DC, at least not until 2009, when the federal minimum wage, if passed, would raise to $7.25 per hour—a level above the current Wisconsin minimum wage. Of course, no matter what, Wisconsin employers would still need that new updated federal minimum wage poster.

The Wisconsin employers out there already saw a Wisconsin minimum wage increase last June to $6.50 per hour, up from its previous level of $5.15 per hour. But there is still a movement in the state to get the Wisconsin minimum wage to increase again this year. The movement is being led by the co chair of the Senate Finance Committee in the state legislature. Sen. Russ Decker has a proposal still in consideration that would raise the Wisconsin minimum wage to $7.25 per hour, an addition 75 cents.

According to Sen. Decker’s bill, the minimum wage change would go into effect this coming September. Included in Decker’s changes to the Wisconsin minimum wage would be one that would tie the Wisconsin minimum wage going forward to the rate of inflation in the state’s economy, or the so called Consumer Price Index. Decker claims that $7.25 per hour is the amount that a worker in the state must make in the very least in order to make ends meet. Decker is a Democrat, and could face Republican opposition in the Senate to his bill, though Democrats at the moment control the Senate.

The state Assembly, however, is controlled by the Republicans, which could lead to an interesting battle in the state capital and could explain why the bill has not made much headway or news since Decker first introduced it back in April (which is when we also first talked about Decker’s plans here, by the way—as always, right on the cutting edge of the news).

The governor of the state, Gov. Jim Doyle has not yet come out and said which way he stands on the issue as far as I and my sources can tell. Moreover, Decker’s proposal faces opposition from the state’s restaurant owners’ association as well as other employer groups.