Human Resource Blog

Federal Minimum Wage Increase

	Compensation
Employee Payroll Action Form W-4 Employee Withholding Allowance Cert. Employee Payroll Status/Change Form Direct Deposit Form Total Compensation Summary

	HR Management
Confidential Employee Folder Confidential Employee Medical Folder Job File Worksheet Folder Daily EEO Applicant Flow Log Workplace Information Sheets Request to Inspect Personnel Files

Several people have asked me, “If the federal minimum wage increases such as it did last week to $6.55/hour are employers required to increase all staff pay by that $0.70 increase?”

Absolutely not. There is no requirement that any employer give increases to workers, unless the worker was earning a wage less than $6.55 per hour prior to July 24, 2008 AND the employer is subject to the federal minimum wage.

Suppose John, Mildred and Sally all work at XYZ Computer Company. On July 23, 2008 Johns hourly rate was $5.85 per hour (the federal minimum.) Mildreds wage was $6.15 per hour while Sally earned $8.00 per hour. Beginning on July 24, 2008 both John and Mildred must be paid
$6.55 per hour. That is an increase of 70 cents for John and 40 cents for Mildred.
However, the employee need not give Sally any sort of salary increase, because she is already earning more than $6.55 per hour.

In fact, some employers would not give Sally an increase at all this year, to partially offset their higher payroll costs for John and Mildred. >

The federal minimum wage applies to all companies with annual revenue of $500,000 or more. It also applies to companies that regularly do business across state lines, including using email or the Internet, or accepting credit cards.

In a number of states, the state minimum wage is higher. In those states, employees must be paid at least the applicable state minimum wage.