Posted by Tamara
Although the Arkansas minimum wage remains at $6.25 per hour, many employees are entitled to $7.25 per hour under the federal minimum wage law, beginning July 24, 2009.
The Fair Minimum Wage Act of 2007 mandated that the federal minimum wage would increase 70 cents an hour over three years.
The final increase took place on July 24, 2009, when the federal minimum wage went up to $7.25 an hour from $6.55.
Small employers in Arkansas can continue to pay $6.25 per hour. However, any employer engaging in interstate commerce, or with annual revenue exceeding $500,000, is covered under federal law.
Before the new legislation was signed into law on May 24, 2007, the federal minimum wage had not increased for ten years. During the same ten-year period, members of Congress had hiked their own yearly pay an average of $31,600 each. By comparison, the new minimum wages amount to $4,368 per worker over the three years, or $84 per week.
Some states follow the effective federal date, and also raise their minimum wages on July 24. More than half of the states have minimums above the federal rate, and in those cases the higher pay rate applies.
It should be noted that, according to the U.S. Department of Labor, it is against the law to pay below the federal minimum for covered employees. The relevant law is the Fair Labor Standards Act of 1938, otherwise known as the FLSA, and the enforcement arm of the Labor Department is its Wage and Hour Division.
Employers with fewer than 50 employees or whose revenues are less than $500,000 annually are not subject to the FLSA. Neither are those who do not engage in interstate commerce. Any firm that regularly mails goods to out of state customers, makes goods for out-of-state sale, or buys supplies out of state, are conducting interstate commerce.
Regardless of the latest federal minimum wage increases, spending power still does not match that of 1968, when the minimum was $1.60 an hour. In order to match the 1968 spending power, proponents of the new minimum wage argued, the rate would have to be $9.12 an hour today.
The July 24, 2009 increase is the third and final hike of three years of increases at 70 cents per hour per year.
The U.S. Department of Labor (DOL) points out that failure to pay the federal minimum is against the law. The DOL’s enforcing agency is its Wage and Hour Division.
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