New Minimum Wage in Effect as of July 2008

Did you know the federal minimum wage increased from $5.85 to $6.95 on July 24, 2008? Additionally, the Fair Minimum Wage Act of 2007 provides for an increase to $7.25 per hour a year later on July 24, 2009. Some states have different minimum wage laws and when they differ, the minimum hourly rate will defer to the higher wage.

Tip Credit Provisions

There will be no change to the Fair Labor Standards Act (FSLA) tip credit rules. An employer is still only required to pay $2.31 per hour as long as:

1. The amount of the tips plus the tip credit equals at least the minimum wage

2. The employee has been informed that the tip credit being taken

3. The employee retains all tips unless they are some sort of pooling arrangement

4. The amount of the tips is normally more than $30 per month

Youth Minimum Wage

Youths under 20 years old may be paid at $4.25 per hour in their first 90 calendar days of employment. This provision remains unchanged from the previous Act.

Employers must post the FSLA in a conspicuous place in the workplace so that all employees have access to it. Required posters and other materials are available from the Department of Labor’s Wage and Hour Division Web site at http://www.wagehour.dol.gov or toll free at 1-866-4US-WAGE (487-9243).