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May08

Tipped Employees

Compensation
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When the minimum wage reaches its peak, are tipped employees included? What ways can employers get around changing current wages? What is the final date for compliance?

The federal minimum wage is currently $5.85 per hour. On July 24, 2008 it will increase to $6.55 per hour and on July 24, 2009 it will increase to $7.25 per hour.

Currently the federal minimum wage for tipped employees remains at $2.13 per hour with no plans to change it.

A number of states have higher minimum wages, and/or higher minimum rates for tipped workers.

The federal law applies to employers with $500,000 in annual revenue, or those who engage in interstate commerce. Many smaller employers are subject to state minimum wage laws, rather than the federal law. In some cases, the federal or state law permits employers to pay workers under 18, or disabled workers, less than the state minimum wage.

Employers who try to evade the minimum wage law usually end up paying all the back wages, plus thousands of dollars in fines and penalties.  

This entry was posted on Thursday, May 8th, 2008 at 2:10 pm and is filed under
Compensation.
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