Federal Minimum Wage Increase for Employers — July 24, 2007

The deadline has arrived for most U.S. employers to increase employee’s compensation to the new federal minimum wage of $5.85 per hour. All employers of workers subject to the Fair Labor Standards Act’s (the “Act”) minimum wage provisions are required by law to make the change in pay and to post, and keep posted, a notice explaining the Act in a conspicuous place in all of their establishments beginning today, July 24, 2007 — the date of the first of three incremental increases in the federal wage standard.

This is the first increase in the federal minimum wage since 1997. The new rate of $7.25 per hour will be phased in over 26 months according to the following timetable:

• First increase – $5.85 per hour, effective on July 24, 2007
• Second increase – $6.55 per hour, one year after the first increase (July 24, 2008)
• Third increase – $7.25 per hour, two years after the first increase (July 24, 2009)

The content of the notice to employees of the change in the federal minimum wage is prescribed by the Wage and Hour Division of the Department of Labor. An approved copy of the minimum wage poster is available for informational purposes or for employers to use as a poster. The poster can be downloaded directly from the Department of Labor’s website. Copies of the poster are available at:

http://www.dol.gov/esa/regs/compliance/posters/flsa.htm

Florida vs. Federal Minimum Wage

It is important to note that Florida’s minimum wage requirement is $6.67 per hour and must be the prevailing rate in Florida for covered employees. On November 2, 2004, Florida’s minimum wage was created in a constitutional amendment approved by voters and covers all employees in the state covered by the federal minimum wage. Pursuant to the language of the state constitutional amendment, the Agency for Workforce Innovation (the “Agency”) is to perform an annual calculation to establish a new minimum wage each year. On September 30th of each year, the Agency must calculate an adjusted state minimum wage rate by increasing the current state minimum wage by the rate of inflation during the 12 months prior to September 1st. The constitution also requires the adjusted minimum wage to be published and to take effect on the following January 1st.

Therefore, unless there is a change in Florida’s Constitution, the Florida minimum wage requirement will remain the prevailing rate in Florida, at least until the new federal minimum wage rate is completely phased in beginning July 24, 2009, and possibly continue to be the higher rate thereafter in light of the Agency’s annual adjustments.

We recommend that employers mark their calendars each year for September 30th to check the new minimum wage rate in Florida for January 1st of the following year to ensure timely compliance.

The Schwarzberg & Associates Employment Law and Compliance Team has extensive experience in developing effective policies, procedures and proactive responsive measures to deal with a myriad of workplace issues. Please do not hesitate to contact one of our members; Steve Schwarzberg or Lisa Kohring at (561) 659-3300 to obtain more information about our firm and its various employment law compliance and defense services.