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July 24, 2009
1-in-10 Employers Affected by New Minimum Wage

Twelve percent of employers say that they have to pay higher wages as a result of the new federal minimum wage, according to an online poll by Compensation.BLR.com and HR.BLR.com.

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The remaining 88 percent said they won't have to pay higher wages as a result of the change.

On Friday, July 24, the federal minimum wage increased from $6.55 per hour to $7.25 per hour. A vast majority of states have set their own minimum wages. Nineteen states already had minimum wages at or above the new federal rate, so they were unaffected by the change, but most states were affected by the increase in the federal rate.

When the minimum wage increases, some employers sometimes face pressure to raise wages for other workers, such as those who make near the new minimum. The poll aimed to address both employers that were now required by law to pay higher wages to minimum-wage workers and those that raised wages for other reasons.

The change in the federal rate affected employers in 30 states. Those states are:

  • Alabama
  • Alaska
  • Arkansas
  • Delaware
  • Florida
  • Georgia
  • Idaho
  • Indiana
  • Kansas
  • Louisiana
  • Maryland
  • Minnesota
  • Mississippi
  • Missouri
  • Montana
  • Nebraska
  • New Jersey
  • New York
  • North Carolina
  • North Dakota
  • Oklahoma
  • Pennsylvania
  • 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 (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 District of Columbia, the minimum wage increased to $8.25 per hour, because the district's minimum wage automatically increases to $1 above the federal rate.

In Nevada, the increase in the federal rate requires employers that provide health insurance to pay their employees $7.25 per hour. Employers that don't offer qualified health insurance must pay $7.55 per hour.

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