Two key federal laws have changed, affecting how employers handle wage-and-hour issues. A new federal minimum wage went into effect in July, and civil penalties for child-
Federal minimum wage
Congress increased the federal minimum wage last year when it passed the Fair Minimum Wage Act of 2007. The law amended the Fair Labor Standards Act (
Although many states have minimum wage levels higher than the federal rate, Texas uses the federal rate as its minimum wage.
The tip credit an employer can claim also increased on July 24. When Congress passed the Fair Minimum Wage Act it did not change the wage an employer is required to pay a tipped employee under Section 3(m) of the FLSA. The FLSA requires employers to pay a wage of $2.13 per hour to take advantage of the tip credit, while the tip credit an employer can claim increases from the current $3.72 per hour to $4.42 per hour. If the employer’s wage of $2.13 per hour plus the employee’s tips do not equal $6.55, then the law requires the employer to pay the difference.
Employers that are subject to the new federal minimum wage should ensure that their payroll records reflect the change and that the proper posters are in place.
A revised federal minimum wage poster that reflects the recently enacted minimum wage increase is available free from The HR Specialist. You can choose two versions to download:
All employers with employees subject to the FLSA’s minimum wage provisions are required to post a notice explaining the statute’s protections. The poster must be in a conspicuous place in the employer’s establishments so it is easy for employees to read.
Child-labor civil penalties
Congress included another change to the FLSA in the Genetic Information Nondiscrimination Act of 2008, which President Bush signed into law on May 21. Included in this law is language increasing the civil money penalty (CMP) that the U.S. Department of Labor can assess against an employer for violations of child-labor laws.
First, Congress increased the maximum CMP by 10% (to $11,000) that the DOL can assess for employing minors in violation of Sections 12 and 13 of the FLSA, and the implementing regulations at 29 CFR Part 570.
In addition, Congress increased the maximum CMP for a violation of the child-labor laws that results in the death or serious injury of an employee under 18 years old.
Where the death or serious injury is the result of a repeated or willful violation, the DOL may double the CMP to $100,000. The law also increased by 10% (to $1,100) the maximum CMP that the DOL can assess for repeated or willful minimum wage and overtime FLSA violations.
The new provisions define a “serious injury” as one that causes: (1) a permanent loss or substantial impairment of one of the five senses; (2) a substantial impairment or permanent loss of the function of a body part, mental ability or organ; or (3) permanent paralysis or substantial impairment that results in the loss of movement of a body part.
More to come?
The increase in the DOL’s authority to assess additional penalties may be a harbinger of things to come in the remainder of this Congressional session and particularly in the Congress that will convene in 2009.
For example, several bills have been introduced in this session to increase penalties OSHA can assess and to strengthen the criminal sanctions of the Occupational Safety and Health Act. The House Education and Labor Committee and its subcommittees have conducted several hearings on this topic. Traditionally, when Congress raises one set of penalties, other labor law penalties are quickly adjusted to match.
Author Alfred B. Robinson Jr. is a shareholder in Ogletree Deakins’ Washington, D.C., office. Mr. Robinson has practiced and advised business clients on employment compliance issues since 1981. Before joining Ogletree Deakins, he served as the acting Administrator of the Wage and Hour Division of the U. S. Department of Labor.
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