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Claim Your Free Copy of Overtime Primer: Highlights from the New Regulations

The federal DOL overtime regulations go into effect this year. Are you ready?

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This report includes a summary of key changes, including the salary level test and salary basis test.

As a bonus, we've included a handy flowchart to help you determine exemption status under the FLSA.

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July 24, 2007
New Minimum Wage Today

The federal minimum wage rose to $5.85 per hour today, so employers should ensure that they are in compliance and have posted a notice with the new minimum wage.

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The increase is the first of three that will occur over the next three years. The next two increases will raise the minimum wage to:

  • $6.55 per hour on July 24, 2008
  • $7.25 per hour on July 24, 2009

Employees last saw an increase in the federal minimum wage in 1997. Since then, most states have raised their minimum wages above both the old and new federal minimum wage ($5.85). If an employee is covered under both the state and federal minimum wage laws, the employee is entitled to the higher of the two minimum wages. Therefore, employees in most states and the District of Columbia aren't affected by the first step of the federal increase.

In general, employers in 19 states are affected by the federal minimum wage increase today because the states don't have a minimum wage that is higher than the new federal rate. The 19 states are:

  • Alabama
  • Georgia
  • Idaho
  • Indiana
  • Kansas
  • Louisiana
  • Mississippi
  • Nebraska (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.)
  • New Hampshire (the minimum wage will increase to $6.50 per hour beginning September 1, 2007 under state law.)
  • New Mexico (the minimum wage will rise to $6.50 per hour beginning January 1, 2008 under state law)
  • North Dakota
  • Oklahoma
  • South Carolina
  • South Dakota
  • Tennessee
  • Texas
  • Utah (the state's minimum wage does not apply to anyone entitled to the federal minimum wage.)
  • Virginia
  • Wyoming (the state's 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 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 $5.30 per hour. If an employer does not provide health benefits, the wage rate is $6.33 per hour.

In West Virginia, the state minimum wage is $6.55 per hour, or the federal minimum wage, whichever is higher. West Virginia's minimum wage law applies to all public employers and private employers that employ six or more employees. However, West Virginia 's minimum wage law doesn't cover a private employer if 80 percent of its employees are subject to any federal law that affects minimum wages, maximum hours, or overtime compensation (e.g., the Fair Labor Standards Act (FLSA) ). Employees are subject to the FLSA's provisions if their employer is engaged in interstate commerce or in the production of goods for interstate commerce, which includes virtually all employers. Note: Unless it is amended, the increase in the state's minimum wage has no practical effect, as virtually all private employees are exempt in one way or another.

Employers are required to display a notice with information for employees on the minimum wage, overtime pay, child labor laws, enforcement of the FLSA, and contact information for the U.S. Department of Labor. The Department of Labor's revised poster is available on . You can find it below.


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