Minimum Wage Increases

May 01, 1996-Shortly before the November, 1996 election, the U.S. Congress adopted and the President signed into law the Small Business Jobs Protection Act. That Act increased the federal minimum wage in two phases. The first phase raises the wage from $4.25 to $4.75 per hour effective October 1, 1996. The second phase is operational September 1, 1997, bringing the federal minimum wage to $5.15 an hour. Once fully implemented, the increase in the federal minimum wage will mean an additional $1800 per year for a minimum-wage worker. The wage package partly excludes workers who receive tips. Their employers will have to pay a minimum of $2.13 an hour, the same as before, provided that the lower minimum rate may have to be supplemented if the employees do not collect enough tips to earn the new minimum wage. The wage package also provides a "training wage" that holds the minium hourly rate for employees younger than 20 years of age during the first 90 consecutive calendar days on the job to the current minimum. Employers are prohibited from displacing employees in order to hire youth at the subminimum wage. Excluded from coverage are all workers not subject to the federal law who fall under the various state minimum wage laws. The bill also amends the Portal-to-Portal Act of 1947 to allow employers and employees (who use company cars to commute to and from work) to agree that commuting time shall not be compensable. That change reverses a two-year old Labor Department ruling that commuting in company vehicles was compensable.