Changes in minimum wage requirements can have a huge impact on park and recreation budgets.
Since 1997, the federal minimum wage has stood at $5.15 per hour. Defined by the federal Fair Labor Standards Act, the minimum wage is the lowest lawful wage that an employer may pay an adult employee. Now, as a result of recent legislation in the U.S. Congress, federal legislators addresed the minimum wage issue by attaching it to other legislation that was signed into law by President George Bush on May 25.
The law raised the federal minimum wage to $5.85, effective July 25, and creates two additional increases, raising the wage floor to $6.55 in July of 2008, and to $7.25 in 2009.
According to information released by House Speaker Nancy Pelosi, an estimated 13 million people will benefit from the proposed federal minimum wage increase. While labor groups applaud the proposed changes, advocates for employers and small businesss fear that the proposed increases will harm the economy, contributing to more job losses caused by cutbacks from employers desperate to control costs. The park and recreation field, which employs large numbers of youth and other workers with many at minimum wage levels, closely watched the progress of this legislation.
States Act on Minimum Wage
While the U.S. Congress debated the federal minimum wage issue, legislatures in various states were already acting on raising the minimum wage in their respective states or are considering increases to state minimum wage levels. The federal Fair Labor Standards Act (FLSA) defers to state or local laws that provide a more favorable wage to the employee. This means that an employer in a state with a higher minimum wage than the federally required minimum wage will be required to comply with the more favorable state-defined wage.
An examination of state minimum wage practices reveals that 45 states have defined a minimum wage law. Of this group, 15 states have specified the minimum wage at $5.15 per hour matching the federal minimum wage, which now must be raised to the $5.85 rate. Another 30 states define provisions for a minimum wage that exceed the federal requirement. Five states are silent on the minimum wage issue, which means that employers in those areas are subject to the federal wage requirement.
News reports reveal that, in the last several years, various states have passed legislation raising the minimum wage to new levels exceeding the federal minimum wage floor.
During 2006, a number of states placed the minimum wage issue to the forefront. Employees in Maine saw minimum wage requirements increase to $6.75 in October of 2006, with a second increase to $7.00 occurring a year later in 2007. Likewise, West Virginia joined the growing number of states hiking the wage floor to $5.85, with succeeding increases to $6.55 in 2007 and $7.25 in 2008.
Many of the states implementing increases to the minimum wage appear to be imposing the increases in a stepped fashion, with two or more incremental changes occurring during a two- or three-year period. In Michigan, for example, the revised minimum wage law passed in 2006 took the state wage floor from $5.15 to $7.40 in three steps. The first step was to $6.95, then to $7.15 and ultimately up to $7.40 per hour.
In Ohio, a voter initiative amending the Ohio Constitution resulted in an increase in the state minimum wage from $5.15 to $6.85 per hour. The Ohio law also addressed issues relating to maintenance of hourly wage records, disclosure of wage records in response to an employee's access request, and identified certain groups of employees as exempt from the minimum wage requirements. The exemptions apply to tipped employees, family members of family owned businesses, and certain casual labor employees.
January 1,2007 also saw minimum wage increases become effective in Arizona, California and Missouri. At that time, wage rates in those states were reset to start at $6. …