It’s time to check with payroll to make absolutely sure that you are geared up for the change in the federal minimum wage. The second of three increases will take effect on Thursday (July 24, 2008). The impact on employers may vary depending on the state in which employees work.

This Thursday, July 24, the federal minimum wage rises from $5.85 per hour to $6.55 per hour. This is the second of three scheduled increases. The first took place in July 2007. The third will take effect on July 24, 2009, when the minimum wage will rise to $7.25 per hour. 

Most states have their own minimum wage laws, and many have minimum wages that differ from the federal. Because federal law covers nearly all employees, making most employers subject to both state and federal laws, employers may effectively ensure compliance with both sets of laws simply by following the one most beneficial to the employee.

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What’s the Deal in Your State?

As researched by BLR editors Sean Dean and Joan Farrell, employers in the following states will generally see the minimum wage they are required to pay increase to $6.55 per hour on July 24, 2008:

  • Alabama
  • Arkansas (State law is not tied to federal law, so employers covered by state, but not federal law, will not be required to pay federal minimum wage.)
  • District of Columbia (The minimum wage, currently $7.00 per hour, is automatically $1.00 per hour higher than the federal rate if that amount is greater than $7.00. Therefore, the minimum wage minimum wage in the district will increase to $7.55 per hour beginning July 24, 2008.)
  • Georgia
  • Idaho
  • Indiana
  • Kansas
  • Louisiana
  • Maryland
  • Minnesota
  • Mississippi
  • Montana
  • Nebraska
  • New Hampshire
  • New Mexico
  • Nevada (The state minimum wage rate varies depending on whether the employer offers employees health benefits. If so, the state law requires a minimum of $5.85 per hour. However, according to Nevada’s attorney general, this rate must increase to $6.55 per hour when the federal increase takes effect. If an employer does not provide health benefits, the wage rate is $6.85 per hour.)
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  • North Carolina
  • North Dakota
  • Oklahoma
  • South Carolina
  • South Dakota
  • Tennessee
  • Texas
  • Utah
  • Virginia
  • Wisconsin (State law is not tied to federal law, so employers covered by state, but not federal law, will not be required to pay federal minimum wage.)
  • Wyoming (Here too, state law is not tied to federal law, so employers covered by state, but not federal law, will not be required to pay federal minimum wage.)

In the next issue of the Advisor, we’ll list states where the minimum wage increase will have no effect on employers, and introduce you to a special audit program that helps keep all your wage and hour practices on track.