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S.F. No. 399 - Family Economic Security Act (Minimum Wage Provision)
 
Author: Senator David J. Tomassoni
 
Prepared By:
 
Date: March 4, 2013



 

BACKGROUND

Senate File No. 399 is titled as the Family Economic Security Act.  It has provisions related to minimum wage, child care assistance, and tax credits for child care and the working family tax credit.  This summary addresses only the changes in state minimum wage law.

There are both state and federal minimum wage laws.  Employers in the state must pay the higher of the applicable state or federal minimum wage.  The current federal minimum wage is $7.25 an hour.  The current federal minimum wage generally applies to covered employees of employers who have annual gross volume of sales made or business done of $500,000 or more.  The current state minimum wage for large employers is $6.15 an hour and for small employers is $5.25 an hour.  A large employer is defined as an enterprise whose annual gross volume of sales made or business done is not less than $625,000.  A small employer is less than $625,000.  The state also has a youth or training wage of $4.90 an hour for persons under the age of 20 for the first 90 consecutive days of work.  There are some types of employers and some types of employees that are exempted from minimum wage coverage under both federal and state law.

Section 8 repeals the exemption from the state labor standards law, including minimum wage and overtime requirements for “any driver employed by an employer engaged in the business of operating taxicabs.”  These employees will be subject to minimum wage and other requirements.

Section 9 amends the definition of a large employer from an enterprise with $625,000 in annual sales to $500,000 in annual sales.  It also increased the minimum wage for large employers to $8.25 an hour beginning September 1, 2013, $9.50 an hour beginning July 1, 2014, and beginning July 1, 2015, to the higher of the current federal minimum wage or the state minimum wage as adjusted annually for inflation each July 1.  A method of computing inflation is provided.

For small employers the increase is to $7.50 an hour beginning September 1, 2013, to $8.25 an hour beginning July 1, 2014, and beginning July 1, 2015, to the higher of the current federal minimum wage or the state minimum wage adjusted annually for inflation each July 1.

The training or youth minimum wage rate is increased to $6.50 an hour beginning September 1, 2013, $7.50 an hour beginning July 1, 2014, and beginning July 1, 2015, the higher of the current federal minimum wage or the state minimum wage as adjusted annually for inflation each July 1.

Section 10 increases the amount of liquidated damages that the Commissioner of Labor and Industry can order an employer to pay for a violation of the minimum wage and certain other labor laws from the amount of compensation owed the employee to twice the compensation owed the employee.

Section 11 provides that in a civil action for violation of the minimum wage and overtime law, an employer can be ordered to pay as liquidated damages twice the amount of compensation owed.  Current law states that liquidated damages are limited to the amount owed.

JCF/syl

 
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