05/ 31/ 2007
by NFIB Legal Foundation
On May 25, 2007, President George W. Bush signed into law the Fair Minimum Wage Act of 2007. This legislation will raise the current minimum wage of $5.15 per hour to $7.25 per hour by July 2009, in three phases:
- Phase 1: Beginning on July 24, 2007, the minimum wage will be $5.85 per hour
- Phase 2: Beginning on July 24, 2008, the minimum wage will be $6.55 per hour
- Phase 3: Beginning on July 24, 2009, the minimum wage will be $7.25 per hour
This minimum wage applies to all employees that meet the current criteria set forth in the Fair Labor Standards Act. The FLSA requires employers to pay covered non-exempt employees at least the federal minimum wage. Exceptions include:
- Employees younger than 20 years old, for up to 90 days;
- "Tipped" employees;
- Full-time students who are employed in retail or service stores, agriculture, or colleges and universities, but only if the employer first obtains a certificate from the DOL under the "Full-time Student Program;"
- Student learners who are high school students at least 16 years of age and enrolled in vocational education courses, but only if the employer first obtains a student learner certificate from the appropriate Regional Office of DOL's Wage and Hour Division;
- Handicapped workers whose earning or productive capacity is impaired by physical or mental deficiency or injury may be paid less than the standard minimum wage, but only if the employer first obtains a certificate from the appropriate Regional Office of DOL's Wage and Hour Division.
Many states also have minimum wage laws, including laws specific to tipped employees. If state and federal laws provide for different minimum wage rates, the employee must be paid the higher of the wage rates. To find your state's minimum wage, please visit http://www.dol.gov/esa/minwage/america.htm.
In addition, businesses will need to update the Department of Labor's required "Federal Minimum Wage" poster. Employers can get a free copy by visiting the Department of Labor's Web site as the compliance date approaches.
If you have any additional questions about how this new minimum wage will affect your business, NFIB members can contact the free NFIB Employment Law Hotline. For more information on the hotline, please contact 1-800-NFIB NOW (800-634-2669).
