On May 25, 2007, President Bush signed an emergency war supplemental spending bill that also raises the federal minimum wage.  The Fair Minimum Wage Act of 2007 increases the federal minimum wage from $5.15 per hour to $7.25 per hour over the next two years.  The first increase happens on July 24, 2007.  This increase should not have an immediate affect on businesses in Maine or Massachusetts because their state minimum wages are currently higher than the new federal minimum wage.  New Hampshire will be affected because New Hampshire’s minimum wage follows the federal minimum wage, and businesses located there should be aware of tax relief opportunities to offset costs associated with the wage hike. The bill includes 4.8 billion dollars in small business tax relief in the form of a tax credit for hiring welfare recipients and enhanced expense write offs.

Does this wage increase affect your business?

Maine

The current minimum wage in Maine, $6.75 per hour, is already higher than the federal level. In fact, Maine’s minimum wage will increase to $7.00 per hour on October 1, 2007, and it will remain greater than the federal minimum wage until the final increase to $7.25 on July 24, 2009.

New Hampshire

This hike in the federal minimum wage does impact New Hampshire businesses as New Hampshire’s minimum wage is currently $5.15 and is tied to the Federal minimum wage.  The New Hampshire minimum wage will automatically increase with the Federal minimum wage.  

Massachusetts

The increase in federal minimum wage will have no effect on the Massachusetts minimum wage, which is currently $7.50 per hour.  According to Massachusetts state law, the Massachusetts minimum wage automatically increases to .10 cents above the federal minimum wage if the federal minimum wages equals or becomes higher than the Massachusetts minimum wage. 

Next Steps for Employers

• Employers will need to post a new minimum wage poster that includes the updated minimum wage and corresponding dates.  The new poster is available on the Department of Labor website and you can click the following link http://www.dol.gov/esa/regs/compliance/posters/flsa.htmto access the poster.  We will post a link to the poster on our website when it is available.
• If you have any questions regarding the minimum wage requirements, please do not hesitate to contact Preti Flaherty’s Labor and Employment Practice Group.