June 2007

New minimum wage effective July 24

A new federal minimum wage rate of $5.85 per hour, up from the current rate of $5.15, will go into effect July 24. The minimum wage rate will increase to $7.24 by 2009.

The “Fair Minimum Wage and Tax Relief” measure is the first increase in the federal minimum wage rate since 1997.

In addition to increasing the federal minimum wage rate, the new law extends the minimum wage to American Samoa and the Commonwealth of the Northern Mariana Islands. The new law also includes certain measures designed to provide tax relief for small businesses.

On July 24, 2008, the federal minimum wage rate will increase to $6.55 per hour. And on July 24, 2009, it will increase to $7.25 per hour.

At least 30 states currently have minimum wage rates higher than the federal minimum wage. Many of these state laws say the state minimum wage rate applies only if it is higher than the federal minimum. Other state laws tie the state minimum wage to the federal minimum wage.

Source: Ford & Harrison, www.fordharrison.com

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