Minimum Wage

• Author: Richard Leiter
• Pages: 301-306

Page 301

The federal government has established a minimum wage, or the least dollar amount that may be paid hourly workers, that applies to all workers in all fifty states who are engaged in interstate commerce or the production of goods for interstate commerce (and closely allied enterprises) or are employed by an enterprise engaged in interstate commerce or the production of goods for commerce. Businesses engaged in “interstate commerce” are defined as those with potential to come in contact with interstate travelers or consumers in other states.

Thus the federal minimum wage does not apply to all occupations. Domestic workers are not covered in many situations; fishermen, employees of certain small newspapers, babysitters, and agricultural seasonal workers in small family farms are some of the common exemptions from the federal minimum wage law. Others who are exempt include those in seasonal employment, such as at amusement parks or seasonal recreation centers, and in “exempt” occupations, such as managers, salesmen, or administrators who are not paid on an hourly basis. Further, if a local business does not qualify as participating in interstate commerce, it, too, would be exempt. These exempt occupations are covered by state minimum wage laws that can be higher or lower than the federal minimum wage which is now $5.15 per hour. However, if the state minimum wage is higher than the federal minimum wage and the employee is subject to both state and federal law, the higher rate will apply.

Subminimum wages are hourly rates below the established minimum wage that may be paid for a limited time to learners, apprentices, messengers, student workers, and those employed in occupations not ordinarily given to full-time workers. The subminimum wage permits businesses to be able to continue to hire certain types of workers in certain nontraditional, “convenience” occupations.

Overall, there is little variation among states in regard to the minimum wage. Since the federal government has established a national minimum wage covering virtually all occupations, most states have simply adopted that wage as their standard, though a few have established higher rates and a few lower. In the last few years, six states that had minimum wages set lower than the federal provision have revised theirs to match the federal rate, and seven have bettered the federal rate. The most dramatic rise in the minimum wage is seen in Georgia, which recently raised its rate to $5.15 from $3.25! Surprisingly, one state (Kansas) still has a rate that is less than the federal rate. Five states have taken no action at all, perhaps determining that the market is the best regulator of wages. That is, if the wage is too low, the employer will either get no applicants or ones with no experience and no skills. Generally, the higher the wage, the better the applicant pool. However, there are circumstances in which workers may be taken advantage of either out of desperation or ignorance. This is precisely why the minimum wage exists.

Page 302

Table 20: Minimum Wage
State	Code Section	Minimum Wage Per Hour	Subminimum Wage Per Hour
FEDERAL	Federal Labor Standards Act, 29 USC §206	$5.15 (eff. 9/1/99); applies to all employees covered by FLSA in 50 states, territories, and possessions except for American Samoa; standard applies to employees, not specifically exempt, who are: (1) engaged in interstate commerce; (2) engaged in production of goods for commerce; or (3) employed in an enterprise engaged in commerce or production of goods for commerce	$4.25; for up to 90 days of training for individuals under 20 years of age
ALABAMA	No statutory provisions
ALASKA	23.10.065; 23.10.070	$7.15 (eff. 1/1/03); Public school bus drivers shall be paid double the minimum wage	Department of Labor Commissioner to set rate of statutory minimum for learners and/or apprentices; individuals whose earning capacity is impaired due to physical or mental defect, age, or injury; individuals in work therapy in residential drug or alcohol treatment programs designed to extend more than 120

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