Hike in Federal Minimum Wage Has Minimal Impact in Most States, CCH Says

Jul 19, 2007, 01:00 ET from CCH, part of Wolters Kluwer Law & Business

    RIVERWOODS, Ill., July 19 /PRNewswire/ -- 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 (http://hr.cch.com).
 CCH has been reporting on federal wage and hour law since the enactment of
 the first federal minimum wage in 1938. That's because 32 states and the
 District of Columbia have minimum wages higher than the new federal level.
     "Over the last ten years, while the federal minimum wage has been
 steady at $5.15 per hour, more and more states have set their minimum wages
 above that, and above the new minimum as well," said Barbara O'Dell, JD,
 CCH workplace analyst.
     States began to pass minimum wage laws early in the last century, often
 as a way to protect women workers, but the U.S. Supreme Court overturned
 them, and a federal attempt to fix wages, until the mid 1930s. In 1937, the
 Court upheld a Washington law mandating a minimum wage for women workers.
 Then, Congress passed a federal minimum wage of 25 cents an hour as part of
 the Fair Labor Standards Act (FLSA) in 1938, and it too was upheld as
 constitutional in 1941.
     When Rates Differ
     Where state and federal minimum wage rates differ, the higher rate
     -- 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
     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. For a timeline of federal
 minimum wage rates 1938-2009, go to
     "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
     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                 $5.85
     Maine                    $6.75
     Maryland                 $6.15
     Massachusetts            $7.50
     Michigan                 $7.15
     Minnesota                $6.15 ($5.25 for employers with less than
                               $625,000 in gross annual sales)
     Missouri                 $6.50
     Montana                  $6.15 ($4.00 for employers with $110,000 or less
                               in gross annual sales)
     Nebraska                 $5.85
     Nevada                   $6.33 ($5.15 if qualified health benefits are
     New Jersey               $7.15
     New York                 $7.15
     North Carolina           $6.15
     Ohio                     $6.85
     Oregon                   $7.80
     Pennsylvania             $7.15 ($6.65 for employers with 10 or fewer
     Rhode Island             $7.40
     Vermont                  $7.53
     Washington               $7.93
     West Virginia            $6.55
     Wisconsin                $6.50
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SOURCE CCH, part of Wolters Kluwer Law & Business