Federal Minimum Wage Will Increase Next Week

The first increase to the federal minimum wage in the past 10 years goes into effect next week. On July 24, 2007, the federal minimum wage will increase from $5.15 to $5.85 per hour. The rate will again increase to $6.55 per hour in July 2008 and $7.25 per hour in July 2009. For employers operating in states that already have higher minimum wage requirements or who already pay all of their employees more than $5.85 per hour, the 2007 rate increase will not require any changes to their pay scale.

Although most employers are aware of the minimum wage increase, they may not be aware that, by July 24, 2007, all employers are also required to post an updated notice of the applicable federal minimum wage rates and related legal obligations. Existing notices containing the prior federal minimum wage rate will be outdated and noncompliant. Failure to post an updated notice may result in fines of up to $10,000. Updated posters may be downloaded free of charge from the Department of Labor.

As employers update their federal minimum wage postings, it may be an appropriate time to ensure that they have posted all required federal and state notices (including EEO, FMLA, USERRA, child labor, and others). Employers are required not only to post this information but to ensure that it remains posted. Employers may want to consider placing notices in a locked case to make certain they remain posted. To help protect themselves against possible claims, employers should maintain a record of previous notices for at least five years. To further bolster this record, employers may also want to write the date the notice was posted or removed, and the name of the person posting or removing it, on the back of the notice.