Jump to Navigation


New Federal Minimum Wage Rate Takes Effect Today

July 24, 2007

Effective today, July 24, 2007, the federal minimum wage increases from $5.15 to $5.85 per hour.   As a reminder, the new minimum wage posters should be posted today.  

The recently-enacted law, which is the first increase in the federal minimum wage in a decade, raises the federal minimum wage for non-exempt employees from $5.15 to $7.25 per hour over two years.  On July 24, 2008, the federal minimum wage will increase to $6.55 per hour and to $7.25 on July 24, 2009.    

Employers of tipped employees utilizing the tip credit provisions of the FLSA may be affected by the minimum wage increase.  Although, the new law does not increase the current minimum hourly rate of $2.13 per hour for tipped workers, nevertheless, employers must ensure tipped employees for whom they claim a tip credit receive the new minimum wage standard.  

Retail employers with commissioned employees currently qualifying for the partial overtime exemption will need to verify that the commissioned employee's regular rate of pay is more than 1.5 times the new minimum wage.  (The second prerequisite of the partial overtime exemption that more than half of the employee's compensation for a representative period must represent commissions is unchanged.) 

As FLSA collective actions continue to dominate litigation throughout the nation, employers should continue to review their compensation practices to assure compliance with the myriad requirements of the FLSA.