Minimum Wage -- Major Issue in the States and in Congress

Changes in the minimum wage are coming for firms in 24 states as of January 1, 2007 or other dates, and it's an issue on the fast track for the Congress when it convenes in January.

WBO's should prepare now to be able to respond to wage increases as they come. It appears that the political battle over the increases is unlikely to be won. The Congress is very likely to pass an increase, and, even if the President were to veto it, additional action at the state level is likely. And, given the competitive issues likely to come from having different minimum wage rates in different states, it can be argued that having a single federally set minimum wage would be preferable from a business perspective.

Here's an update on changes in the states that national employment law firm JacksonLewis passed along to clients following the fall elections:

Voters went to the polls in six states this Election Day and overwhelmingly approved ballot initiatives increasing their respective state minimum wages to amounts higher than the $5.15 per hour provided under the federal Fair Labor Standards Act. Voter sentiment was consistent with recently enacted legislation in other jurisdictions.

The approved Election Day ballot initiatives are:

Arizona – Established a state minimum wage law with a minimum wage of $6.75 per hour effective January 1, 2007, with increases each year for the cost of living;

Colorado – Raised the state minimum wage from $5.15 per hour to $6.85 per hour effective January 1, 2007, with increases each year for the cost of living;

Missouri – Raised state minimum wage from $5.15 per hour to $6.50 per hour effective January 1, 2007, with increases each year for the cost of living;

Montana – Raised state minimum wage from $5.15 per hour to $6.15 per hour effective January 1, 2007, with increases each year for the cost of living;

Nevada – Raised state minimum wage from $5.15 per hour to $6.15 per hour effective November 28, 2006. However, if the employer makes health insurance available for the employee and the employee's dependents at a total cost to the employee for premiums of not more than 10 percent of the employee's gross taxable income from the employer, the minimum wage payable to such employees remains $5.15 per hour; and

Ohio – Raised its state minimum wage from $5.15 per hour to $6.85 per hour effective January 1, 2007, with increases each year for the cost of living.

In addition to these changes established by voter referendum, California, Connecticut, Delaware, Florida, Hawaii, Massachusetts, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont and Washington have passed measures increasing their respective state minimum wages effective January 1, 2007. Moreover, Arkansas, Maine, Michigan, New Jersey and West Virginia recently enacted and/or implemented statutory increases to the minimum wage with effective dates other than January 1, 2007.