Minimum wage increase takes effect next week

Workers and employers, take note: The minimum wage will go up next week in Idaho and most other states.

The minimum wage will increase to $6.55 an hour from $5.85 on July 24 under state and federal laws passed in 2007. It is the second of three increases that will lead to the wage rising once more to $7.25 an hour a year from now. The wage rose to $5.85 an hour from $5.15 last July.

The increase will pump millions of dollars into the pockets of tens of thousands of Idaho's lowest-paid workers over the next year, the Idaho Labor Department said Tuesday. The increase last July gave raises to more than 19,000 workers and amounted to an additional $12 million in pay over the past year, the department said.

The biggest chunk of those workers - more than 40 percent - worked in leisure and hospitality, which includes restaurants, hotels and recreational businesses. Seventeen percent were in some segment of retailing.

The same types of workers will likely benefit again this year, although more detailed estimates are not yet available. Rising unemployment across the state has taken pressure off the labor pool, and that could affect employer decisions on hourly wages since competition for qualified workers has eased from a year ago.

States are not required to adhere to the federal minimum wage, but the Idaho Legislature voted last year to make Idaho's basic minimum wage identical to the federal minimum so that any change in the federal minimum wage would immediately be reflected in the state minimum.

The federal minimum wage applies only to workers for businesses involved in interstate commerce or with gross receipts of $500,000 or more a year. The state minimum wage covers all other workers.

The minimum wage for Idaho employees in jobs where they earn tips - bartenders, waiters and waitresses, for example - remains unchanged at $3.35 an hour. But employers must ensure that tips provide an additional $3.20 an hour so that tips combined with wages equal at least the new minimum. If the combination falls short, the employer must make up the difference.

Next week's increase is likely to have the least impact in the northern part of the state. Employers in border cities like Moscow, Lewiston and metropolitan Coeur d'Alene have had to boost wages well over the minimum to compete for qualified workers with businesses in Washington, where the minimum wage is $8.07 an hour. Oregon's minimum is $7.95 an hour.

Posters required to be displayed by employers, including one on the minimum wage, are available free of charge from the Idaho Department of Labor on its Web site, http://labor.idaho.gov.