Posted on 19-Jun-09 by The Timekeeper

My, time flies when you’re having fun, eh? So for those of you who, like me, didn’t realize this is coming up soon, a quick head’s up — the Federal minimum wage is set to increase again on July 24, 2009, to $7.55 an hour. This is the final phase of the increases mandated by the Fair Minimum Wage Act of 2007.

Not all wages are changing, though. The tip credit wage will stay the same, at $2.13 an hour. Remember, in order to qualify for the tip credit, there are some conditions that have to be met:

• The employee’s combination of tips and the tip credit wage must work out to be equal to or greater than the minimum wage of $7.55 an hour,
• The employee must regularly receive at least $30 a week in tips,
• The employee must be allowed to keep all the tips they receive, except to the extent they participate in a legal tip pool (i.e. you can’t force them to share tips with management or non-service employees; I’ve written about this before),
• And you have to have informed the employee about the tip credit being taken.

In addition, there are no changes to the “youth minimum wage.”. That remains at $4.25 an hour for the first 90 consecutive calendar days of employment for workers under the age of 20.

Keep in mind, too, that your state may have its own minimum wage requirements, and you have to meet whichever one is higher. So while you need to keep track of the Federal minimum, and you will need to update your workplace posters to reflect the new Federal rules, if your state mandates a higher minimum, you need to conform to the state rules when you pay your people.

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