labor lawAdivision of labor law center

Wyoming employers need to be aware of recent changes in the federal minimum wage. 

Although the Wyoming minimum wage is currently $5.15 per hour, most employees are entitled to the federal minimum wage of $7.25 per hour.

Wyoming is one of four states with a minimum wage lower than the federal minimum wage. Those states include Arkansas, Kansas, Minnesota and Wyoming.

There are also five states without a state minimum wage – Alabama, Mississippi, Louisiana, South Carolina and Tennessee. If an employee in any of these states is not covered by the federal minimum wage, that employee can legally be paid a mere $1.00 per hour.

Most Wyoming employees, however, are covered by the federal minimum wage, which increased on July 24, 2009 from $6.55 per hour to $7.25 per hour.

For that reason, Wyoming employers should be careful to diaply an updated federal and Wyoming minimum wage poster.

The relevant law for the federal minimum wage is the Fair Labor Standards Act of 1938. This law made major changes in the workplace. It established child labors laws to prohibit children under the age of 14 from working in almost every occupation. Today’s teenagers sometime balk at this fact, but prior to FLSA, children of all ages often worked 60 hours per week in factories, mills and farms, sometimes operating dangerous machinery.

FLSA covers all businesses with annual earnings of at least $500,000 and those companies engaged in interstate commerce. Individual employees who engage in interstate commerce are covered, too. For example a secretary who answers out-of-state phone calls is engaged in interstate commerce, as is a shipping clerk that mails packages out-of-state.

With the widespread use of credit cards and the Internet, there are few businesses and employees who aren’t engaged in interstate commerce.

Wyoming employers should take this opportunity to update their labor law posters, both state and federal. The posters must be displayed in a prominent spot, easily accessed by all employees.

The increase in the federal minimum on July 24, 2009, was the third and last of three 70 cent increases set forth by the Fair Minimum Wage Act of 2007. These increases each occurred on July 24 in the years of 2007, 2008, 2009.

Several states tie their minimum wage rate to the federal rate. For example, Arizona, Maryland, Iowa, Utah, Texas and Indiana enacted laws so that when the federal minimum increased, the minimum in their state matched it. Therefore, on July 24, 2009, the minimum wage in these eight states increased to match the federal rate of $7.25 per hour.

Complying with federal and Wyoming minimum wage laws was at the heart of a settlement Wal-Mart Stores, Inc. recently made. The company violated the Fair Labor Standards Act (FLSA) according to the US Department of Labor. Because of this, Wal-Mart has agreed to pay $33 million in back pay to 86,680 employees located in Wyoming and other parts of the nation.

Wal-Mart’s violation concerned how the nation’s largest retailer paid overtime to employees who worked more than 40 hours per week. FLSA mandates that overtime be paid at the rate of 1.5 times the usual salary of the employee. This agreement covers time worked by employees from February 1, 2002 through January 19, 2007.

According to Victoria A. Lipnic, Assistant Secretary of Labor for Employment Standards, “This settlement provides $33 million in back wages, plus interest, to Wal-Mart workers, and the company has taken corrective action to prevent this from happening again.”

The US Department of Labor filed a complaint against the retailer in the US District Court. Violations of the overtime provisions and state minimum wage laws were the contents of the compliant. In the next step, a consent judgment was issued that ordered Wal-Mart Stores, Inc. to pay back wages. This consent judgment also enjoined Wal-Mart from additional violations. The court promptly approved the consent judgment.

Wal-Mart Stores, Inc. is paying this money because of the way in which it calculated overtime pay. The law is that workers must be paid overtime that is calculated from their hourly pay using the amount that is their average compensation per hour.

In this case, the giant retailer was not taking into consideration what the employees earned once premiums and incentives were added to their base rate. For instance, an employee might have a base rate of $6.00 per hour but normally earn $7.00 an hour once premiums and incentives were added.

A miscalculation of overtime payments has cost one of the nation’s largest retailers dearly.

The US Dept of Labor reported recently that Wal-Mart Stores, Inc. has agreed to pay more than $33 million in back wages after violating federal and Wyoming overtime laws.

Wal-Mart was found to have not applied the proper calculations when working out overtime payments to workers who normally benefit from incentives or premium payments.  Under the law, an employee is entitled to overtime payments equal to that of 1.5 times their hourly rate if they work over 40 hours a week. But Wal-Mart did not take into account the employees incentive payments or premiums.

This means that, for example, an employee’s hourly rate was $6.00 per hour, but with incentives, they would normally earn $7.00 per hour. Their overtime payment would be 1.5 times $7.00 per hour. The overtime rate should be based on the hourly rate including incentives.

Wal-Mart was found guilty of only paying employees 1.5 times their basic hourly rate.

The $33 million covers back payments for 86,680 throughout the United States, for the period February 1, 2002 to January 19, 2007.  As well as the back wages owed to employees, Wal-Mart has agreed to pay interest on the amount. It was thought that this would act as a deterrent against similar violations in the future.

Speaking about the judgment, the Assistant Secretary of Labor for Employment Standards, Victoria A Lipnic said, “This settlement provides $33 million in back wages, plus interest, to Wal-Mart workers, and the company has taken corrective action to prevent this from happening again.”

Wal-Mart was found to have violated the Fair Labor Standards Act, or FLSA, which states that employees who are covered by the act are legally entitled to receive overtime payments at the rate of 1.5 times their usual hourly rate, for each hour they work over their standard 40 hour week.

The Wyoming minimum wage has not changed, and on the state level, we cannot even be sure that a change will take place any time soon. The level is set to match the federal minimum wage at the moment—at $5.15 per hour. And one has to wonder whether or not the state of Wyoming’s minimum wage law attaches its rate automatically to the federal minimum wage, or whether the state legislature in Wyoming will have to pass a new law in order to get the state minimum wage directly tied to the federal minimum wage.

After my last blog post, you can see the significance of that. If the federal minimum wage is passed by the Memorial Day Holiday weekend, then the entire country could be looking at a three part federal minimum wage increase spanned out over the course of two years.

As we talked about before—the first increase would occur 60 days after the president signs the federal minimum wage into law. That would take the federal minimum wage from its current level of $5.15 per hour to the next level of $5.85 per hour. A year after that, in 2008, the federal minimum wage would increase again, this time from the $5.85 per hour level to $6.50 per hour. It would be in 2009—another year to the day of the second increase—that the federal minimum wage would take the third in its three part increases, from $6.50 per hour to $7.25 per hour. There the federal minimum wage would remain until a new law comes through the halls of Capitol Hill to increase the rate again.

In event that these increases become reality, many employers in the state of Wyoming would have to pay the new higher wages to the lowest paid workers. Why? Well, because many employers in the state of Wyoming would be liable to follow the federal wage and hour labor laws on the subject—the Fair Labor Standards Act. We covered why an employer might be liable for the Fair Labor Standards Act before, but not for a little bit, so why not look at it again—right?

The Fair Labor Standards Act has two main qualifications that employers must meet—one or the other, not necessarily both—before they have to pay the federal minimum wage. The first qualification is the so called enterprise qualification, whereby an employers brings in more than $500,000 per year in revenue. Do that, and you must pay the federal minimum wage. Another determining factor is if you have employees that work or operate in more than one state. If so, you must pay those employees the federal minimum wage. Also included in that list are government employers, schools, and hospitals—no matter what sort of revenue they bring in.

The issue for these employers is pretty simple. You have to pay the federal minimum wage, so when it increases in the coming weeks, so will your payments to those employees on your pay roll that make the minimum wage. But what of those employers that do not have to follow the Fair Labor Standards Act. They must pay the state of Wyoming’s minimum wage, so if that does not change with the federal minimum wage, then they will be paying less than those other employers in the state. That is where the situation in Wyoming could get very interesting.

No matter what type of employer you are in the state of Wyoming, however, there is one thing for sure if the federal minimum wage goes and becomes law—all of you will be required to get a new updated federal minimum wage labor law poster.

The state of Wyoming’s legislature has closed up shop for the season. The 59th state legislature has ended this session after 37 days in the office, and after passing 511 laws during that time. But their general session ended without a new minimum wage for the cowboy state.

The state had considered other important issues as well, not just the minimum wage, such as abortion, school scholarships, eminent domain, child predator laws, and child care. One such law was the Wyoming Cancer Control Act, which gives money to people who need to get colonoscopies but otherwise could not afford the expense of the medical procedure. Its ultimate goal of course to prevent cancer in the state of Wyoming.

Other passed laws include on that removes the sales tax on groceries, or one that makes sure breastfeeding mothers cannot be charged with indecent exposure in public. Another law makes it legal to have patron-organized gambling or poker in bars and restaurants. Other laws offer protection for consumers against identity theft, and another that will help people get access to mental health care and substance abuse treatment through the state.

But the Wyoming legislature also failed to pass some bills that employers in the state could have cared about, whether or not in a good or bad way. For instance, the state failed to pass a smoking ban for smoking in public places, which according to my sources had some pretty heavy duty public support.

And of course, the main topic of this post—the state legislature in Wyoming did not pass a measure that it had on its table to increase the state minimum wage. What does that mean for employers? Well, if you are a small (under $500,000 per year revenue) and local (no interstate business), you will not have to pay the higher federal minimum wage when and if it becomes law.