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American Payroll Association (APA) Basic Guide to Payroll, 2013 Edition

American Payroll Association (APA) Basic Guide to Payroll, 2013 Edition
It's more important than ever to be in compliance with payroll laws and regulations! How do you stay in compliance and avoid penalties? The APA Basic Guide to Payroll is written to make understanding the laws and regulations as easy as possible. And this single-volume guide is filled with tools to help you apply the law and make proper calculations ‚Äď with ease!

CCH® PAYROLL — 7/9/08

Federal and many state minimum wage rates to go up in July

The federal minimum hourly wage is scheduled to increase to $6.55 July 24, 2008. This rate applies to nonexempt employers with two or more employees and at least $500,000 in annual dollar volume of business, and also to smaller employers if employees are engaged in interstate commerce or production of good for commerce. Also required to pay the federal minimum wage, regardless of their dollar volume of business, are hospitals; institutions primarily engaged in the care of the sick, aged, mentally ill, or disabled who reside on the premises; schools for children who are mentally, or physically disabled or gifted; preschools, elementary, and secondary schools and institutions of higher education; and federal, state, and local government agencies. This federal increase is the second part of a three-step increase put in place by enactment of House Resolution 2206 on May 25, 2007, which amended the Fair Labor Standards Act of 1938 to provide for increases to $5.85 per hour on July 1, 2007, $6.55 per hour on July 24, 2008, and $7.25 per hour on July 1, 2009.

Employers of employees who are subject to both state and federal minimum hourly wage rates must pay employees the higher of the two rates.

Here's a quick look at the current basic minimum hourly wage rates in the states and what, if any, impact the federal change will have on them:

Alabama—no state minimum hourly wage. The state adheres to the federal minimum wage rate. For those subject to the federal law, the federal minimum wage of $6.55 will apply effective July 24, 2008.
Alaska—$7.15. The state minimum wage will remain higher than the federal rate.
Arizona—$6.90, for businesses that have $500,000 or more in annual gross revenue. Application to small business is the same as with federal law. The state minimum wage will remain higher than the federal rate.
Arkansas—$6.25, if employers have four or more employees employed in a workweek. For those subject to the federal law, the federal minimum wage of $6.55 will apply July 24, 2008.
California—$8.00. The state minimum wage will remain higher than the federal rate.
Colorado—$7.02. The state minimum wage will remain higher than the federal rate.
Connecticut—$7.65. The state minimum wage will remain higher than the federal rate. Note: The state minimum wage rate will increase to $8.00 January 1, 2009, and to $8.25 per hour on January 1, 2010.
Delaware—$7.15. The state minimum wage will remain higher than the federal rate.
District of Columbia—$7.00. District law provides that the minimum wage in the District is $7.00 per hour or the minimum wage rate set under the federal Fair Labor Standards Act plus $1, whichever is greater. Therefore, effective July 24, 2008, the minimum wage in the District will be $7.55 per hour ($6.55 plus $1).
Florida—$6.79. The state minimum wage will remain higher than the federal rate.
Georgia—$5.15. The state rate is lower than the federal rate. For employers and employees subject to federal law, the federal rate of $6.55 will apply.
Hawaii—$7.25. The state minimum wage will remain higher than the federal rate.
Idaho—$5.85. The minimum wage will increase to $6.55 per hour on July 24, 2008, along with the federal rate; State law says the minimum wage is to conform to and be on track with the federal minimum wage.
Illinois—$7.50 until July 1, 2008. $7.75, effective July 1, 2008. The state minimum wage will remain higher than the federal rate.
Indiana—$5.85. State law says that the minimum wage for employees of employers having two or more employees must be not less than the federal minimum rate. Therefore, Indiana's minimum hourly wage will increase to $6.55 along with the federal rate change on July 24, 2008.
Iowa—$7.25. The state minimum wage will remain higher than the federal rate.
Kansas—$2.65. This rate is lower than the federal minimum hourly wage. For those subject to the federal law, the higher federal minimum wage rate of $6.55 will apply.
Kentucky—$5.85 until July 1, 2008. Effective July 1, 2008, the state minimum wage rate increases to $6.55. The state minimum hourly wage rate change occurs earlier in the month than the federal increase.
Louisiana—no minimum wage rate. For those subject to the federal law, the federal minimum wage of $6.55 will apply effective July 24, 2008.
Maine—$7.00 until October 1, 2008. $7.25, effective October 1, 2008; $7.50, effective October 1, 2009. The state minimum wage will remain higher than the federal rate.
Maryland—$6.15. Employees subject to both the federal Fair Labor Standards Act and Maryland's minimum wage law must be paid the higher federal rate of $6.55 per hour on July 24, 2008. Other employees covered under the state minimum wage law must be paid a wage that equals the higher federal rate of $6.55 or a training wage, if applicable.
Massachusetts—$8.00. The state minimum wage will remain higher than the federal rate.
Michigan—$7.15 until July 1, 2008, for employees of employers having two or more employees. Effective July 1, 2008, the state minimum wage increases to $7.40 per hour. The state minimum wage will remain higher than the federal rate.
Minnesota—$6.15/$5.25. The minimum wage rate of $6.15 applies to large employers having an annual gross volume or sale of business done of not less than $625,000 who are subject to the state minimum wage law; For covered smaller employers, the rate of $5.25 applies. If an employer is subject to both state and federal minimum wage laws, the employee must be paid the higher rate.
Mississippi—no minimum wage. For those subject to the federal law, the federal minimum wage of $6.55 will apply effective July 24, 2008.
Missouri—$6.65. The state minimum wage will remain higher than the federal rate.
Montana—$6.25. State law provides that employees must be paid the greater of either the federal or the state minimum wage; Therefore, the federal rate of $6.55 per hour will apply effective July 24, 2008.
Nebraska—$5.85. The state minimum wage is scheduled to increase to $6.55 on July 24, 2008, aligned with the federal rate changes.
Nevada—$5.85/$6.85. Employers who provide qualified health insurance benefits must pay employees a minimum hourly wage of $5.85; employers who do not provide qualified health insurance benefits must pay employees a minimum hourly wage of $6.85. Effective July 24, 2008, the basic rate of $5.85 will be lower than the federal rate, and employers subject to the federal law would be required to pay the higher federal rate.
New Hampshire—$6.50. State law provides that an employer can not employ an employee at a rate lower than the federal rate; Therefore, effective July 24, 2008, the $6.55 federal rate will apply, but, only until September 1, 2008, when the New Hampshire minimum hourly wage is scheduled to increase to $7.25 per hour.
New Jersey—$7.15. The state minimum wage will remain higher than the federal rate.
New Mexico—$6.50. Effective July 24, 2008, this rate will be lower than the federal rate, but only until January 1, 2009, when the state minimum wage is scheduled to increase to $7.50 per hour. For employers subject to federal law, the federal rate of $6.55 will apply from July 24, 2008, until January 1, 2009.
New York—$7.15. The state minimum wage will remain higher than the federal rate.
North Carolina—$6.15. State law provides that employers in North Carolina must pay the state minimum wage or the federal rate, whichever is higher; Therefore, the federal rate of $6.55 per hour will apply July 24, 2008.
North Dakota—$5.85. State law provides that the state minimum wage is to increase to $6.55, along with the federal rate, on July 24.
Ohio—$7.00. The state minimum wage will remain higher than the federal rate.
Oklahoma—$5.85, for employees of employers having at least 10 full-time employees at one location and for employees of employers who have gross sales of more than $100,000 annually, regardless of the number of employees. State law provides that, with certain exceptions, no employer is to pay an employee less than the federal minimum hourly wage rate. Therefore, the federal minimum wage of $6.55 per hour will apply on July 24, 2008.
Oregon—$7.95. The state minimum wage will remain higher than the federal rate.
Pennsylvania—$7.15, for larger employers. For employers with 10 or fewer full-time employees, the minimum wage is $6.65 per hour; Effective July 1, 2008, the state minimum wage rate of $7.15 per hour will apply to these employers as well. The state minimum wage will remain higher than the federal rate.
Rhode Island—$7.40. The state minimum wage will remain higher than the federal rate.
South Carolina—no minimum wage rate. For those subject to the federal law, the federal minimum wage of $6.55 will apply effective July 24, 2008.
South Dakota—$5.85, same as federal. The state minimum wage is scheduled to increase to $6.55 per hour on July 24, 2008.
Tennessee—No minimum wage. For those subject to the federal law, the federal minimum wage of $6.55 will apply effective July 24, 2008.
Texas—$5.85. State law provides that the minimum wage is to be the same as the federal rate; Therefore, the minimum wage in Texas will increase to $6.55 per hour on July 24, along with the federal rate.
Utah—$5.85. State rulemaking provides for the state minimum wage to increase to $6.55 on July 24, the same as the federal rate changes.
Vermont—$7.68. The state minimum wage will remain higher than the federal rate.
Virginia—$5.85. Virginia law provides that employers are to pay employees a minimum wage rate of not less than the federal rate. Therefore, the federal minimum wage of $6.55 will apply on July 24.
Washington—$8.07. The state minimum wage will remain higher than the federal rate.
West Virginia—$6.55. Effective July 1, 2008, this rate increase to $7.25 per hour. The state minimum wage will remain higher than the federal rate.
Wisconsin—$6.50. This rate will be lower than the federal rate on July 24; For those subject to the federal law, the federal minimum wage of $6.55 will apply.
Wyoming—$5.15. This rate is lower than the federal rate. For those subject to the federal law, the federal minimum wage of $6.55 will apply effective July 24, 2008.

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