By Audrey M. Calkins
Some state legislatures have decided to put more money in employees’ pockets by implementing minimum wage increases that will take effect in 2020. Understanding the federal, state, and local (including city or county) wage laws applicable to your company’s employees will help ensure that your pay practices comply with the law. This article aims to arm you with the information you need to ensure that your company complies with federal and state minimum wage laws in the new year. If your company has employees in states other than those listed in this article, the U.S. Department of Labor’s state minimum wage map, https://www.dol.gov/whd/minwage/america.htm#stateDetails, can be a starting point for your review of state minimum wage changes going into effect in 2020.
Is Your Company A Covered Employer?
The Fair Labor Standards Act (“FLSA”), which contains the federal $7.25/hour minimum wage discussed below, covers employees in two ways: “enterprise coverage” and “individual coverage.” First, the FLSA covers employees working for certain businesses or organizations (“enterprises”) that have at least two employees and either (1) do at least $500,000 in business annually or (2) are hospitals; businesses providing medical or nursing care to residents; schools and preschools; or government agencies. Second, in the absence of enterprise coverage, the FLSA covers individual employees if their work regularly involves them in interstate commerce—a broad definition that covers nearly all employees. See https://www.dol.gov/whd/regs/compliance/whdfs14.htm.
Because Alabama, Florida, Louisiana, Mississippi, and Tennessee have no state-specific minimum-wage-coverage law, the FLSA’s coverage law applies to employees in those states. The below four states have state-specific laws regarding minimum wage coverage:
| State | Minimum-Wage-Covered Employers |
| Arkansas |
All employers with at least four employees are
covered except for those specifically exempt by statute, which include (1)
independent contractors; (2) workers employed by the federal government; (3)
students working for schools where they regularly attend classes and are
enrolled; and (4) certain hand-harvest laborers paid on a piece-rate basis. See https://labor.publishpath.com/Websites/ labor/images/May29MinWageRegs2.pdf. |
| Georgia | All employers with at least six employees are covered except for those specifically exempt by statute, which include (1) employers with less than $40,000 in annual sales; (2) employers of domestic employees; and (3) employers who are farm owners, sharecroppers, or land renters. Ga. Code Ann. § 34-4-3(a)-(b). |
| Kentucky | All employees are covered by the state minimum wage law except for those specifically exempt by statute, which include (1) agriculture workers; (2) federal workers; (3) exempt outside collectors; and (4) those employed in domestic service in or about a private home if more than one domestic servant is regularly employed. See Ky. Rev. Stat. Ann. §§ 337.010(1)(d), (2)(a); https://labor.ky.gov/standards/Pages/Wages-and-Hours.aspx |
| North Carolina | All employees are covered by the state minimum wage law except for those specifically exempt by statute, which include (1) employees covered by the FLSA; (2) certain exempt employees; (3) certain computer-related workers; and (4) agriculture employees and those employed in catching, processing, or first selling seafood. N.C. Gen. Stat. §§ 95-25.2(5), 95-25.3, 95-25.14. |
For a full list of covered employers (or employers exempt from coverage) under state law, please see the citations above. The rest of this article assumes that your company is a covered employer under federal or state law—which is likely the case. Regardless, applicability of minimum wage laws is the first step in your review of your company’s payment procedures.
Federal Minimum Wage
Effective July 24, 2009—over a decade ago—the federal minimum wage rose to $7.25/hour. Wage-and-hour laws divide employees into two categories: exempt and non-exempt. (As of January 1, 2020, exempt employees must be paid a salary of at least $684 per week ($35,568 annually) and meet a duties test that places their job within one of the delineated exemptions in the FLSA. See https://ogletree.com/insights/2019-09-24/finally-the-final-part-541-rule-35568-is-the-new-salary-threshold-for-exempt-employees/.)
This article will focus on non-exempt employees, who must be paid at least the applicable minimum wage per hour. While exceptions to the federal minimum wage obligation exist (including tipped employees, workers with disabilities, full-time students, youth under age 20 in the first 90 consecutive calendar days of their employment, and student-learners), this article focuses on the generally applicable minimum wage in nine Southeastern states: Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, and Tennessee.
Importantly, if an employer is subject to both state and federal minimum wage laws, the employee is entitled to the higher minimum wage. See https://www.dol.gov/whd/minwage/q-a.htm.
Minimum Wages for Southeastern Employees
- Alabama
Alabama does not have a state minimum wage. As such, covered employers must pay non-exempt employees the federal minimum wage of $7.25/hour.
- Arkansas
Arkansas’ 2019 minimum wage is $9.25/hour, and it will go up on January 1 for the next two years. See https://www.labor.arkansas.gov/minimum-wage-and-overtime. Effective January 1, 2020, Arkansas’ minimum wage will be $10.00/hour.
- Florida
Florida’s 2019 minimum wage is $8.46/hour, and Florida law requires the Florida Department of Economic Opportunity to calculate a minimum wage rate each year based on inflation. See http://www.floridajobs.org/business-growth-and-partnerships/for-employers/display-posters-and-required-notices. Effective January 1, 2020, the minimum wage in Florida will be $8.56/hour.
- Georgia
Georgia’s minimum wage is $5.15/hour—less than the federal minimum wage. Georgia employers subject to the federal minimum wage must pay their employees $7.25/hour. See Ga. Code Ann. § 34-4-3(c); https://dol.georgia.gov/minimum-wage.
- Kentucky
Kentucky’s minimum wage is $7.25/hour. See https://labor.ky.gov/standards/Pages/Wages-and-Hours.aspx. If the federal minimum wage increases above the state minimum, the state minimum increases to the same amount as the federal rate. See Ky. Rev. Stat. Ann. § 337.275(1); http://205.204.196.14/dows/doesam/pw/Pages/Prevailing-Wage.aspx.
- Louisiana
Louisiana does not have a state minimum wage. As such, covered employers must pay non-exempt employees the federal minimum wage of $7.25/hour. See http://www.laworks.net/LaborLawInfo.asp.
- Mississippi
Mississippi does not have a state minimum wage. As such, covered employers must pay non-exempt employees the federal minimum wage of $7.25/hour. See https://mdes.ms.gov/employers/unemployment-tax/employer-resources/employment-issues/.
- North Carolina
North Carolina’s employees must be paid at least $6.15 an hour or the federal minimum wage, whichever is higher. See N.C. Gen. Stat. §95-25.3(a); https://www.labor.nc.gov/workplace-rights/employee-rights-regarding-time-worked-and-wages-earned/minimum-wage-nc. Accordingly, the applicable minimum wage in North Carolina is $7.25/hour.
- Tennessee
Tennessee does not have a state minimum wage. As such, covered employers must pay non-exempt employees the federal minimum wage of $7.25/hour. See https://www.tennessean.com/story/money/2019/05/03/tennessee-minimum-wage-unchanged/3004107002/.
Help! My Company Employs Employees in Multiple States!
Many employers have employees working in multiple states (e.g., working in Florida and Georgia), or who work in only in one state that differs from the state where the employer is based (e.g. Georgia company with a Florida employee). Because the location of employees’ work determines the applicable minimum wage, an employee working in Florida and Georgia should be paid the Florida minimum wage for work performed in Florida and the Georgia minimum wage for work performed in Georgia. A Georgia-based company must pay its Florida workers at least Florida’s minimum wage.
Additionally, employers must pay the applicable wage most generous to the employee. For example, if an employee works in a state with a minimum wage of $10.00/hour, but the city where they work has a $11.00/hour minimum wage, the employee should be paid $11.00/hour. Remember that these minimum wages set the floor for compliance, and some states’ wages increase in January or July each year. As such, remaining cognizant of the changing wage landscape can help ensure your compliance with wage and hour laws.
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