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Prepare to comply with new state minimum wage law

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in Compensation and Benefits,Human Resources

Gov. Rendell signed legislation last month that increases Pennsylvania's minimum wage by $2 per hour phased in over the next two years, but smaller businesses will have more time before having to pay the higher rates.

Under the new law, Pennsylvania's minimum wage will increase to $6.25 per hour on Jan. 1, 2007, then to $7.15 an hour on July 1, 2007.

That increase will take effect more slowly for small businesses (those with the equivalent of 10 or fewer full-time employees). Small employers will pay $5.65 an hour beginning Jan. 1, 2007 and then $6.65 beginning July 1, 2007. They won't have to pay the full $7.15 per hour until July 1, 2008. (Franchises of larger chains don't qualify for the exemption.)

At the July 9 bill signing, Rendell said the increase will also have the effect of pushing up wages for people who now make $7 to $8 per hour.

The state Department of Labor and Industry says about 423,000 workers in Pennsylvania make between $5.15 and $7.14 an hour, according to an AP report.

Pennsylvania is just the latest state legislature to take action on the minimum wage while Congress turns back Democratic efforts to raise the federal minimum beyond its $5.15 per hour limit. In fact, Pennsylvania is the 22nd state to approve an increase since Congress last raised the federal minimum in 1997.  

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