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Final Increase to Federal Minimum Wage in Effect Pursuant to the Fair Minimum Wage Act of 2007

By A. Edward Hardin, Jr.

Effective July 24, 2009, the federal minimum wage increased from $6.55 per hour to $7.25 per hour for all non-exempt employees.  The 2009 increase in the federal minimum wage was the third and final increase to the federal minimum wage pursuant to Fair Minimum Wage Act of 2007.  Under the 2007 Act, the minimum wage established by the Fair Labor Standards Act increased in three steps from $5.85 per hour effective July 24, 2007, to $6.55 per hour effective July 24, 2008, and to $7.25 per hour effective July 24.

The Fair Labor Standards Act is enforced by the U.S. Department of Labor's Wage and Hour Division.  The first federal minimum wage, set October 29, 1938, was $.25 per hour. The federal minimum wage broke the $1.00 threshold effective March 1, 1956; $2.00 effective May 1, 1974; $3.10 effective January 1, 1980; $4.25 effective April 1, 1991; and $5.15 effective September 1, 1997.

In addition to the establishment of the minimum wage, the Fair Labor Standards Act establishes overtime pay requirements, record keeping and posting requirements, and youth employment standards.  Under the Fair Labor Standards Act, non-exempt employees must be paid at least the minimum wage per hour, and one and one half times the employee's 'regular rate of pay' (not necessarily their hourly rate) for all hours worked over forty hours per work week. 

Section (13)(a)(1) of the Fair Labor Standards Act provides an exemption to both the minimum wage and overtime obligations. Under Section (13)(a)1, employees employed as bona fide executive administrative, professional employees, and outside sales people are considered 'exempt' if: (1) certain tests regarding their job duties are met; and (2) the employee is paid on a 'salary basis.'  The employee's specific job duties, not title, dictate whether the employee is exempt or non-exempt. Although state law provides for breaks for minors, the Fair Labor Standards Act does not require breaks or meal periods.  Nor does the Fair Labor Standards Act define 'full-time' employment.  This designation 'full-time' (versus part-time) employment is determined by the employer.  Likewise, the Fair Labor Standards Act does not require severance pay, sick leave, vacation, or holidays.

Full post as published by Louisiana Law Blog on September 28, 2009 (boomark / email).