By Felicity S. Hanks, Esq. and Joseph M. McGinley, Esq.

Minimum wage reform has become a prevalent and at times polarizing issue. The trend in recent years has been to increase wages above federal minimum standards. Currently, the federal minimum wage is $7.25/hour.[1] This rate is a floor; states may legislate to provide higher minimum wage rates, but may not pay workers below the federal standard. In complying with this provision, U.S. states and territories are split in whether they provide for higher wage benefits to workers or rely on the federal minimum.

Currently, thirty states and territories have minimum wage requirements that exceed the federal minimum of $7.25/hour.[2] The remaining states and territories meet the federal standard either expressly or by default: seventeen states have minimum wage rates equivalent to the federal minimum,[3] five states have no minimum wage law (thus, federal law applies),[4] and two states have minimum wage rates lower than the federal minimum (those laws are superseded by the federal minimum wage).[5]

On February 12, 2014, President Obama signed Executive Order 13658, which raised the minimum wage for workers on Federal construction and service contracts to $10.10/hour. Although President Obama’s executive order increased rates for federal contract workers, only Congress has the authority to increase the federal minimum wage rate; it has declined to do so.

The minimum wage rate in Pennsylvania is set equal the federal standard.[6] New Jersey provides for a slightly higher rate at $8.38/hour. Interestingly, the New Jersey minimum wage will continue to change in upcoming years in tandem with the consumer price index.[7]

Many states continue to debate raising their minimum wage requirements; in response to legislative inaction, some localities have taken matters into their own hands. Major cities such as Seattle, San Francisco, and Chicago have voted to gradually increase to minimum wage to $15/hour in the upcoming years, while Oakland has voted to increase its minimum wage to $10.10/hour.

Due to the wide variation of minimum wage rates across the United States, it is important for businesses to keep abreast of federal, state, and local minimum wage requirements, especially if a business operates and employs workers in multiple states. We encourage employers to consult with employment attorneys regarding any minimum wage issues or concerns and to stay aware of proposed legislation.

 

[1]Fair Labor Standards Act, 29 U.S.C. § 206.

[2] Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, Ohio, Oregon, Rhode Island, South Dakota, Vermont, Washington, and West Virginia.

[3] Guam, Idaho, Indiana, Iowa, Kansas, Kentucky, New Hampshire, North Carolina, North Dakota, Oklahoma, Pennsylvania, Puerto Rico, Texas, Utah, Virginia, the U.S. Virgin Islands, and Wisconsin.

[4] Alabama, Louisiana, Mississippi, South Carolina, and Tennessee all have no minimum wage laws.

[5] Georgia and Wyoming.

[6] 43 P.S. § 333.101 et seq.

[7] N.J.S.A. 34:11-56 et seq.