Minimum Wage to change on July 24, 2009

Under the Fair Labor Standards Act (FLSA), the federal minimum wage for covered nonexempt employees is $5.85 per hour effective July 24, 2007; $6.55 per hour effective July 24, 2008; and $7.25 per hour effective July 24, 2009. Many states also have minimum wage laws. Where an employee is subject to both the state and federal minimum wage laws, the employee is entitled to the higher minimum wage rate.

What is the minimum wage for workers who receive tips?
An employer may pay a tipped employee not less than $2.13 an hour in direct wages if that amount plus the tips received equal at least the federal minimum wage, the employee retains all tips and the employee customarily and regularly receives more than $30 a month in tips. If an employee's tips combined with the employer's direct wages of at least $2.13 an hour do not equal the federal minimum hourly wage, the employer must make up the difference.
Some states have minimum wage laws specific to tipped employees.  When an employee is subject to both the federal and state wage laws, the employee is entitled to the provisions of each
law which provide the greater benefits.

Must young workers be paid the minimum wage?
A minimum wage of $4.25 per hour applies to young workers under the age of 20 during their first 90 consecutive calendar days of employment with an employer, as long as their work does not
displace other workers. After 90 consecutive days of employment or the employee reaches 20 years of age, whichever comes first, the employee must receive a minimum wage of $5.85 per hour effective July 24, 2007; $6.55 per hour effective July 24, 2008; and $7.25 per hour effective July 24, 2009.  Other programs that allow for payment of less than the full federal minimum wage apply to workers with disabilities, full-time students, and student-learners employed pursuant to subminimum wage certificates. These programs are not limited to the employment of young workers.

What minimum wage exceptions apply to full-time students?
The Full-time Student Program is for full-time students employed in retail or service stores, agriculture, or colleges and universities. The employer that hires students can obtain a certificate from the Department of Labor which allows the student to be paid not less than 85% of the minimum wage. The certificate also limits the hours that the student may work to 8 hours in a day and no more than 20 hours a week when school is in session and 40 hours when school is out, and requires the employer to follow all child labor laws. Once students graduate or leave school for good, they must be paid $5.85 per hour effective July 24, 2007; $6.55 per hour effective July 24, 2008; and $7.25 per hour effective July 24, 2009.

What minimum wage exceptions apply to student learners?
This program is for high school students at least 16 years old who are enrolled in vocational education (shop courses). The employer that hires the student can obtain a certificate from the Department of Labor which allows the student to be paid not less than 75% of the minimum wage, for as long as the student is enrolled in the vocational education program.

If you have questions regarding this topic, please call
Clark-Mortenson at 603-352-2121 today!

This is neither an effort to practice law nor a legal service. Compliance Check does not engage in the practice of law, accounting or tax consulting. Compliance Check encourages everyone to consult with their own attorney, certified public accountant and tax professional on any issues involving specific facts, persons, circumstances or situations. © 2003 Compliance Check, protected under United States law and international treaty. All rights reserved.