Effective today, July 24, 2008, the federal Fair Labor Standards
Act, FLSA, minimum wage increased from $5.85 to $6.55 per hour, a 12% increase
11.9659% . Employers paying rates at or near the current minimum of $5.85 must
remember that the new rate is effective for all work hours as of 12:01 A.M.
today, July 24, not at the beginning of your next pay period. The federal FLSA
applies generally to all nonexempt employers with two or more employees and a
business purpose for-profit doing at least $500,000 in annual business. The FLSA
also covers smaller employers and nonprofit employers with employees engaged in
interstate commerce, the production of goods for commerce or in a job that is
closely related and directly essential to the production of goods includes
electronic communication and transactions for interstate commerce. The FLSA also
includes for-profit and not-for-profit employers regardless of size that are
hospitals, residential care establishments, institutions primarily engaged in
the care of the sick, aged, mentally ill, or disabled who reside on the
premises, schools, preschools, elementary, secondary schools including those
operated by churches , institutions of higher education, and federal, state, and
local government agencies, and government authorities. Most employers in the
following states are subject to the new higher FLSA $6.55 minimum:
Alabama
Arkansas
Georgia
Idaho
Indiana
Kansas
Kentucky*
Louisiana
Maryland
Minnesota
Mississippi
Montana
Nebraska
Nevada**
New Hampshire New
Mexico
North Carolina North Dakota
Oklahoma
South Carolina
South Dakota Tennessee
Texas
Utah
Virginia
Wisconsin
Wyoming
* $6.55 effective July 1, 2008 under state law
** $6.55 minimum applies to those employees provided health
insurance. All other employees subject to the state minimum wage of $6.85 The
following states have increases in their state minimum wage that are higher than
the FLSA minimum:
D.C. $7.55 Effective July 24, 2008
Illinois $7.75 Effective July 1, 2008
Michigan $7.40 Effective July 1, 2008
New Hampshire $7.25 Effective Sep 1, 2008
New Mexico $7.50 Effective January 1, 2009
Pennsylvania $7.15 Effective July 1, 2008
West Virginia $7.25 Effective July 1, 2008
With the new higher minimum wages closing the gap with existing
employee wage rates, employers must ensure that improper deductions not
deductions for benefits and required withholdings from employees’ wages do not
result in a minimum wage violation. Despite having an employee’s permission or
signed authorization, deductions or charges for tools, equipment, and uniforms
required by the employer or the nature of the work are unlawful to the extent
they reduce the employee’s wages below the minimum wage for the hours worked in
the week of the deduction. A payment to a third party is the same as a
deduction. Examples of improper deductions include charges for the loss or
damage to cell phones, PDAs, insurance deductibles for auto damage, uniforms,
etc. where the deduction reduces the wages below the state or federal minimum
wage, whichever is higher, in the week of the deduction or payment.
Arizona