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As of Friday July 24th, both the state and federal minimum wage rates have increased to $7.25/hr. This increase nullifies the Wisconsin Minor Minimum Wage of $5.90/hr. but employees 14–19 years old may still be paid the Opportunity Wage of $5.90/hr for the first 90 calendar days on the job.
Federal and State General Minimum Wage
• Increases to $7.25/hr. as of 7/24/09
WI Minor Minimum Wage
• Increases to $7.25/hr. as of 7/24/09
Opportunity Minimum Wage
(for employees 14-19 yrs. old, first 90 calendar days on job)
• Remains $5.90/hr.
Tipped Employee Minimum Wage
• Base wage will remain at $2.33/hr. for employees age 20 or older and employees age 14 - 19 after 90 days of opportunity wage has passed.
• Opportunity Base wage will remain at $2.13/hr. for new hires under the age of 20 during the first 90 calendar days on the job.
We’ve been getting many calls about the increase so here are some Frequently Asked Questions that may help you.
Q: Do I really need to pay teen employees the full $7.25/hr. rate?
A: Yes, if they aren’t eligible for the Opportunity Wage during their first 90 calendar days on the job. For example if you hire a new employee next week who is under the age of 20, then you could use the opportunity wage of $5.90/hr. for their first 90 calendar days on the job – after that they would need to making the full $7.25/hr. general minimum wage. If you hired an employee earlier in their year and didn’t take advantage of the opportunity wage or used it and their first 90 calendar days on the job has passed, then that employee will need to be paid $7.25/hr as of today.
Q: What is the Opportunity Wage about?
A: This $5.90/hr. wage applies to teen employees under the age of 20 during their first 90 calendar days of work. After this period they must be paid the general minimum wage of $7.25/hr. The opportunity wage will still be available to ALL employers regardless of whether your business is subject to Wisconsin law only or both Wisconsin and federal law. The federal opportunity wage rate is actually $4.25, but Wisconsin’s rate of $5.90 is higher and therefore more favorable for the employee – making it the rate that should be used by all employers in the state who take advantage of the opportunity wage.
Q: My pay day is today. I think my employees will be expecting a bigger paycheck. How do I handle that?
A: Well, the increase is effective as of today – July 24th. I’m assuming the paycheck that you issue today will not include hours worked today – it would be for hours worked prior to the minimum wage increase and would reflect that pay rate. Your employees’ increase will show up in the next pay period. Some employers will be dealing with a paycheck that will include some hours at the previous lower pay rate and some at the new, increased rate – depending on when their payday falls.
Q: What about new posters?
A: If you have the WRA Labor Law Poster pack – the federal minimum wage listed on the yellow Fair Labor Standards Act poster is still valid. That poster listed all three stages on the three step federal increase. The bright pink Wisconsin minimum wage poster has been revised. This poster is recommended, but not required of employers in Wisconsin. The June-July issue of WRA News included paper copies of the WI minimum wage poster and the revised Wisconsin Family and Medical Leave Act poster. These serve to keep you in compliance until WRA sends the laminated versions in the annual HERO update packet which typically goes out in the winter. Below you’ll find links to the Federal and State posters.
Q: Can I use the tip credit for my bartenders?
A: Wisconsin law defines a tipped employee as any employee in an occupation in which he or she customarily and regularly receives tips from patrons or others.
Federal law defines a tipped employee, for minimum wage purposes, as any employee engaged in an occupation in which he or she customarily and regularly receives more than $30 per month in tips. ($20 per month for IRS tip reporting purposes.)
So, as long as your bartenders fall into the category of a tipped employee, then you can take the tip credit for them. If you’ve been paying them $6.55/hr. you could leave them at that rate and take the tip credit for the difference between $7.25 and $6.55. You would have to inform them prior to doing so. No particular form of notice is required, but a posted notice or a memo explaining “Management is taking a tip credit of $- per hour as permitted by law” would suffice.
Q: I use the tip credit. What if my employees don’t make enough in tips to meet the new minimum wage?
A: If over a full pay period, an employee does not receive enough money in tips plus actual base wages to bring him or her up to the full minimum wage, the employer must increase the base wages to make up the difference!
Link to WI minimum wage poster:
http://www.dwd.state.wi.us/dwd/publications/erd/pdf/erd_9247_p.pdf
Link to Federal (FSLA) minimum wage poster:
http://www.dol.gov/esa/whd/regs/compliance/posters/minwagebwp.pdf
Link to HERO Minimum Wage page:
http://www.wirestaurant.org/pdf/membership/minwage09.pdf |
