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Mary M. Krakow

Mary M. Krakow Employment & Labor

mkrakow@fredlaw.com
612.492.7164
Printable Version

The New Federal Minimum Wage: Much Ado About Nothing for Many Until 2008

By: MARY M. KRAKOW

August 2007

Few Minnesota employers probably even noticed that, effective July 24, 2007, the federal minimum wage increased from $5.15 to $5.85 per hour. That’s because the seventy-cent increase only affected a handful of Minnesota employers. Minnesota’s minimum wage of $6.15 for large employers—those companies with annual gross sales made or business done of $625,000 or more—already exceeded the new federal minimum. The federal increase affected only Minnesota small employers—those companies with annual gross sales made or business done of less than $625,000. Because of their size, those companies were allowed to pay the previous Minnesota minimum of $5.25.

When the federal minimum automatically increases two more times in the next two years, however, many more Minnesota and regional employers will be affected. The federal minimum rises to $6.55 on July 24, 2008, and to $7.25 on July 24, 2009.

The accompanying chart shows the scheduled federal minimum wage increases and the minimum wages for Minnesota and several other states. Each state could raise its minimum wage prior to 2008 and 2009, however. When the federal and state minimums differ, employers always must pay the higher wage.

 

July 24, 2007

July 24, 2008

July 24, 2009

Federal

$5.85

$6.55

$7.25

Minnesota
Large Employer
($625,000 or more in annual gross sales made or business done)

$6.15

$6.15

$6.15

Minnesota
Small Employer
(less than $625,000 in annual gross sales made or business done)

$5.25

$5.25

$5.25

Wisconsin

$6.50

$6.50

$6.50

Iowa

$6.20

$7.25
(effective January 1, 2008)

$7.25

North Dakota

$5.15

$5.15

$5.15

South Dakota

$5.15

$5.15

$5.15

Illinois

$7.50
(effective July 1, 2007)

$7.75
(effective July 1, 2008)

$8.00
(effective July 1, 2009)
and $8.25
(effective July 1, 2010)

California

$7.50

$8.00
(effective July 1, 2008)

$8.00

Certain exceptions to minimum wage apply to workers under the age of 20 for their first 90 days of employment and, in some states, to tipped employees and agricultural and disabled workers. Employers with questions regarding possible exceptions to the minimum wage, or other wage questions, are encouraged to contact their Fredrikson & Byron Employment & Labor Law attorney.

Takeaway


All employees must be sure to post the required federal wage poster including the new federal minimum.