For the Minimum Wage, Place Matters

The federal minimum wage rises today, but exactly what employers have to pay depends on the state.

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Employers, take note: Today, the minimum wage rises to $6.55 an hour. That's the second of three scheduled increases. Next year, it will go up to $7.25 an hour. But this is just the federal minimum. States have their own laws, which complicate the matter.

Business & Legal Reports, a newsletter publisher, has a handy state-by-state guide to the minimum wage increase. Twenty-five states will see an increase to $6.55, while the other half already have their minimum wages set above that new floor. The highest is Washington State's, at $8.07.

Three states—Arkansas, Wisconsin, and Wyoming—don't tie their state minimum wages to the federal one, so in those states the new $6.55 applies only to employers covered by federal law. Under the Fair Labor Standards Act, that means any business engaged in interstate commerce or "engaged in commerce or in the production of goods for commerce," which in practice means most businesses that take in more than $500,000 in gross sales a year.

Here is my earlier commentary on a recent study revealing some interesting things about the minimum wage and its effects on small business.

minimum wage
small business

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