On July 24, 2009 the federal minimum wage will increase to $7.25 per hour, a raise of 70 cents over the current hourly rate of $6.55 that became effective last year.
Former President George W. Bush authorized the minimum wage increase in May 2007, when he signed the Fair Minimum Wage Act of 2007 passed by congress.
The 2007 Act amended the Fair Labor Standards Act of 1938 (FLSA) by increasing the federal minimum wage in increments of 70 cents per year, starting on the effective date of July 24, 2007 and ending on the same effective date in 2009.
Subsequently, the upcoming 70-cent raise will be the third and last of three federal minimum wage increases authorized under the amended FLSA. The new minimum wage amount of $7.25 per hour will remain in effect until new legislation changes it.
Several states have planned to match the new federal minimum wage of $7.25 per hour, also effective July 24, 2009. Meanwhile, a few states have already increased the hourly rate amount to $7.25 or more. Eligible employees are entitled to whichever hourly rate is the most generous between the federal and state minimum wage.
About the Minimum Wage
The federal minimum wage is the least hourly amount that employers in all U.S. states must pay to employees who are covered by the FLSA; however, the FLSA has special rules that permit employers to pay a lower hourly base rate, referred to as a subminimum wage, under certain circumstances, such as when employees receive enough in tips to compensate for the difference.
States may enact their own minimum wage laws that mandate different hourly rates than does the FLSA. Many states have, while others have simply adopted the FLSA “as is”. Regardless, the FLSA always rules, except where state minimum wage laws are more generous to eligible employees.