Friday, February 14, 2014

President Supports Pay Increase to Combat Inflation

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Workers across the country are still beaming after President Obama's announcement that he supports raising the federal minimum wage to $10.10/hr. The increase is intended to help those performing service and construction industry jobs that currently get paid less than the proposed new federal minimum wage. The new rate will only be paid to employees covered by the Fair Labor Standards Act (FLSA). The increase will take effect for new contracts after the effective date of the president's executive order to enable contractors adequate time to prepare and price their work bids accordingly.

President Obama also supports legislation that would raise the federal minimum wage in steps in order to index it for inflation. The Fair Minimum Wage Act seeks to raise the minimum wage to $10.10/hr in three progressions of 0.95 cents each. The first increase would raise the minimum wage to $8.20/hr then to $9.15/hr before finally ending at the desired $10.10/hr. The act will also provide for automatic annual increases linked to changes in the cost of living. There are currently 10 states that adjust their minimum wage rates for inflation every year; however, it will be the first time the federal government has taken this step. No states currently have a minimum wage higher than the new proposed federal minimum wage.

Check your inbox for PayState Update Issue #4 for more information and a full list of states where the minimum wage is tied to the federal rate.