RE:  Week Ending June 3, 2007

On May 25, 2007, President Bush signed into law the Small Business and Work Opportunity Act of 2007.  We have yet another new tax bill that has been signed into law.  One of the important points here is that there has been a change in the minimum wage on a Federal level.  Each state can sometimes claim its own minimum wage, but it must be at least what the Federal minimum wage is.  To date, the Federal minimum wage is $5.15 per hour.  Over the next two years, it will grow to $7.25 per hour.  Some states, such as California , have a minimum wage of $8.25.  Arizona has a minimum wage of $6.75 per hour.  We can expect to see prices go up as minimum wage goes up over the next two years.  This sometimes causes inflation.  We want to let you know that you will see the minimum wage increase from $5.15 per hour to $7.25 per hour in three 70-cent increments over the next two years.  Sixty days after the bill is signed, which is July 25; the Federal minimum wage goes to $5.85 per hour.  One year later, which will be July 25, 2008, it goes to $6.55 per hour and then one year after that, July 25, 2009, it will be $7.25 per hour.  It also means that employees paid via tips will see an increase in their minimum wage as well.  Employers must be able to compute tip income to meet the minimum wage for the employees, the wait staff as well.  Here are some points to remember:  

Ø      Federal minimum wage increases on July 25, 2007  

Ø      The first minimum wage increase is to $5.85 per hour on July 25, 2007 until July 24, 2008  

Ø      July 25, 2008 the minimum wage increases to $6.55 per hour  

Ø      July 25, 2009 the minimum wage increases to $7.25 per hour

If you have any questions, or would like more information on this topic, please feel free to call and schedule an appointment with my office.  

Respectfully,  

Robert F. Hockensmith, PC

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