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June 19, 2008
Minimum Wage Set to Increase Again: How It Will Affect You

The second of three increases to the federal minimum wage will take effect on July 24, 2008. The increase will affect employers in most states.

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On July 24, 2008, the federal minimum wage rises from $5.85 per hour to $6.55 per hour.

The first of the three scheduled increases took place in July 2007. The third increase will take effect on July 24, 2009, when the minimum wage will rise to $7.25 per hour.

Most states have passed their own minimum wage law, and many of the states have minimum wages that differ from the federal rate. Because the 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 that is most beneficial to the employee.

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.)
  • Georgia
  • Idaho
  • Indiana
  • Kansas
  • Louisiana
  • Maryland
  • Minnesota
  • Mississippi
  • Montana
  • Nebraska
  • New Hampshire
  • New Mexico
  • 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 (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, 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.

In Nevada, the state minimum wage rate varies for employers depending on whether the employer offers its employees health benefits. If an employer provides health benefits, the state law requires a minimum wage rate of $5.85 per hour. However, according to an opinion letter issued by the Nevada 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. The rate is not affected by the federal increase because it's already higher than the increased federal rate.

This year's increase in the federal minimum wage will generally have no effect on employers in the following states because they currently have or will have (before the federal increase) minimum wages at or above $6.55 per hour:

  • Alaska (the state minimum wage is $7.15)
  • Arizona (state minimum wage is $6.90 and is indexed to inflation)
  • California (state minimum wage is $8.00)
  • Colorado (state minimum wage us $7.02 and is indexed to inflation)
  • Connecticut (state minimum wage is $7.65)
  • Delaware (state minimum wage is $7.15)
  • Florida (state minimum wage is $6.79 and is indexed to inflation)
  • Hawaii (state minimum wage is $7.25)
  • Illinois (state minimum wage will increase from $7.50 to $7.75 on July 1)
  • Iowa (state minimum wage is $7.25)
  • Kentucky (state minimum wage will increase from $5.85 to $6.55 on July 1)
  • Maine (state minimum wage is $7.00)
  • Massachusetts (state minimum wage is $8.00)
  • Michigan (state minimum wage will increase from $7.15 to $7.40 on July 1)
  • Missouri (the state minimum wage is $6.65 and is indexed to inflation)
  • New Jersey (the state minimum wage is $7.15 )
  • New York (state minimum wage is $7.15)
  • Ohio (the state minimum wage is $7.00 and is indexed to inflation)
  • Oregon (the state minimum wage is $7.95 and is indexed to inflation)
  • Pennsylvania (the state minimum wage is $7.15)
  • Rhode Island (the state minimum wage is $7.40)
  • Vermont (the state minimum wage is $7.68 and is indexed to inflation)
  • Washington (the state minimum wage is $8.07 and is indexed to inflation)
  • West Virginia (the state minimum wage will increase from $6.55 to $7.25 on July 1. Note: Many employers in West Virginia are exempt from the state law and can pay the lower federal minimum wage)

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