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Hike in Federal Minimum Wage Has Minimal Impact in Most States, CCH Says

(RIVERWOODS, ILL., July 19, 2007) – Workers in most states will not be affected by the upcoming increase in the federal minimum wage to $5.85, according to CCH, a leading provider of human resources information and software and part of Wolters Kluwer Law & Business (hr.cch.com). CCH has been reporting on federal wage and hour law since the enactment of the first federal minimum wage in 1938. That’s because 32 states and the District of Columbia have minimum wages higher than the new federal level.

“Over the last ten years, while the federal minimum wage has been steady at $5.15 per hour, more and more states have set their minimum wages above that, and above the new minimum as well,” said Barbara O’Dell, JD, CCH workplace analyst.

States began to pass minimum wage laws early in the last century, often as a way to protect women workers, but the U.S. Supreme Court overturned them, and a federal attempt to fix wages, until the mid 1930s. In 1937, the Court upheld a Washington law mandating a minimum wage for women workers. Then, Congress passed a federal minimum wage of 25 cents an hour as part of the Fair Labor Standards Act (FLSA) in 1938, and it too was upheld as constitutional in 1941.

When Rates Differ

Where state and federal minimum wage rates differ, the higher rate prevails.

  • Alabama, Louisiana, Mississippi, South Carolina and Tennessee do not have state minimum wage laws, so employers must pay the federal rate to employees who are subject to the FLSA;
  • In Georgia, Kansas, New Mexico, Utah and Wyoming, the state minimum wage rates are lower than the revised federal rate, so employers must pay the federal rate to employees who are subject to the FLSA (however, the New Mexico rate will increase to $6.50 on January 1, 2008).
  • In Idaho, Indiana, New Hampshire, North Dakota, Oklahoma, South Dakota, Texas and Virginia, the state rates are tied to the federal rate and will automatically increase (however, the New Hampshire rate will then increase to $6.50 on September 1, 2007).

The remaining states and the District of Columbia have minimum wage rates that will equal or exceed the federal rate on July 24, 2007. Employers in these states must continue to pay the state rate as long as it remains higher than the federal rate. In Minnesota, Montana and Nevada, some employers currently paying a state-authorized lower minimum wage based on their size or offering benefits will be affected by the federal increase.

If the federal rate increases above the state rate, the federal rate applies, and the federal hourly rate is scheduled to increase to $6.55 on July 24, 2008 and to $7.25 on July 24, 2009. For a timeline of federal minimum wage rates 1938-2009, click here.

“Employers – especially those who operate in several different states – will have to keep aware of a changing environment as federal and state rates criss-cross in the years ahead,” O’Dell said.

A state-by-state list of hourly wage rates follows for states at or above the new federal level as of July 24, 2007.

Hourly Minimum Wage Rates as of July 24, 2007

Alaska

$7.15

Arizona

$6.75

Arkansas

$6.25

California

$7.50

Colorado

$6.85

Connecticut

$7.65

Delaware

$6.65

District of Columbia

$7.00

Florida

$6.67

Hawaii

$7.25

Illinois

$7.50

Iowa

$6.20

Kentucky

$5.85

Maine

$6.75

Maryland

$6.15

Massachusetts

$7.50

Michigan

$7.15

Minnesota

$6.15 ($5.25 for employers with less than $625,000 in gross annual sales)

Missouri

$6.50

Montana

$6.15 ($4.00 for employers with $110,000 or less in gross annual sales)

Nebraska

$5.85

Nevada

$6.33 ($5.15 if qualified health benefits are offered)

New Jersey

$7.15

New York

$7.15

North Carolina

$6.15

Ohio

$6.85

Oregon

$7.80

Pennsylvania

$7.15 ($6.65 for employers with 10 or fewer employees)

Rhode Island

$7.40

Vermont

$7.53

Washington

$7.93

West Virginia

$6.55

Wisconsin

$6.50

About Wolters Kluwer Law & Business

Wolters Kluwer Law & Business is a leading provider of research products and software solutions in key specialty areas for legal and business professionals, as well as casebooks and study aids for law students. Its major product lines include Aspen Publishers, CCH, Kluwer Law International and Loislaw. Its markets include law firms, law schools, corporate counsel and professionals requiring legal and compliance information. Wolters Kluwer Law & Business, a unit of Wolters Kluwer, is based in New York City and Riverwoods, Ill.

Wolters Kluwer is a leading global information services and publishing company. The company provides products and services for professionals in the health, tax, accounting, corporate, financial services, legal and regulatory sectors. Wolters Kluwer has 2006 annual revenues of €3.7 billion, employs approximately 19,900 people worldwide and maintains operations across Europe, North America, and Asia Pacific. Wolters Kluwer is headquartered in Amsterdam, the Netherlands. Its shares are quoted on the Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices. For more information, visit www.wolterskluwer.com.

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