Increase in Federal Minimum Wage
The federal minimum wage will rise from $5.15 to $5.85 per hour on
Tuesday, July 24, 2007, the first of three increases that will take
place over the next two years.
Over the next two years, the federal minimum wage will rise from to
$7.25 per hour in three steps. The federal minimum wage will increase
to:
$5.85 per hour on July 24, 2007
$6.55 per hour on July 24, 2008
$7.25 per hour on July 24, 2009
Employees last saw an increase in the federal minimum wage in 1997. Since then, most states have raised their minimum wages above both the old and new federal minimum wage. Therefore, most states and the District of Columbia won't be affected by the first step of the federal increase.
Workers in most states will not be affected by the upcoming increase in the federal minimum wage to $5.85, according to CCH, a leading provider of human resources information and software and part of Wolters Kluwer Law & Business. That's because 32 states and the District of Columbia have minimum wages higher than the new federal level.
Where state and federal minimum wage rates differ, the higher rate prevails.
Alabama, Louisiana, Mississippi, South Carolina and Tennessee do not have state minimum wage laws, so employers must pay the federal rate to employees who are subject to the FLSA.
In Georgia, Kansas, New Mexico, Utah and Wyoming, the state minimum wage rates are lower than the revised federal rate, so employers must pay the federal rate to employees who are subject to the FLSA (however, the New Mexico rate will increase to $6.50 on January 1, 2008).
In Idaho, Indiana, New Hampshire, North Dakota, Oklahoma, South Dakota,
Texas and Virginia, the state rates are tied to the federal rate and
will automatically increase (however, the New Hampshire rate will then
increase to $6.50 on September 1, 2007).
The remaining states and the District of Columbia have minimum wage
rates that will equal or exceed the federal rate on July 24, 2007. Employers
in these states must continue to pay the state rate as long as it remains
higher than the federal rate. In Minnesota, Montana and Nevada, some
employers currently paying a state-authorized lower minimum wage based
on their size or offering benefits will be affected by the federal increase.
If the federal rate increases above the state rate, the federal rate applies, and the federal hourly rate is scheduled to increase to $6.55 on July 24, 2008 and to $7.25 on July 24, 2009.
"Employers -- especially those who operate in several different states -- will have to keep aware of a changing environment as federal and state rates criss-cross in the years ahead," O'Dell said.
A state-by-state list of hourly wage rates follows for states at or above the new federal level as of July 24, 2007.
Hourly Minimum Wage Rates as of July 24, 2007
State Rate
Alaska $7.15
Arizona $6.75
Arkansas $6.25
California $7.50
Colorado $6.85
Connecticut $7.65
Delaware $6.65
District of Columbia $7.00
Florida $6.67
Hawaii $7.25
Illinois $7.50
Iowa $6.20
Kentucky $6.85
Maine $6.75
Maryland $6.15
Massachusetts $7.50
Michigan $7.15
Minnesota $6.15 (1)
Missouri $6.50
Montana $6.15 (2)
Nebraska $5.85
Nevada $6.33 (3)
New Jersey $7.15
New York $7.15
North Carolina $6.15
Ohio $6.85
Oregon $7.80
Pennsylvania $7.15 (4)
Rhode Island $7.40
Vermont $7.53
Washington $&.93
Weset Virginia $6.55
Wisconsin $6.50
(1)Minnesota: $5.25 for employers with less than $625,000 in gross annual
sales
(2)Montana: $4.00 for employers with $110,000 or less in gross annual
sales
(3)Nevada: $5.15 if qualified health benefits are offered
(4)Pennsylvania: $6.65 for employers with 10 or fewer employees