On May 25, 2007, the Fair Labor Standards Act (FLSA) was amended to increase the federal minimum wage in three steps: from $5.15 to $5.85 per hour effective July 24, 2007; to $6.55 per hour effective July 24, 2008; and to $7.25 per hour effective July 24, 2009.

The first increase in the minimum wage takes it to $5.85 on July 24, 2007.

Clients with minimum wage earning employees should ensure that their payroll adjusts to ensure that minimum wage employees are paid the increase; and insure that they adjust the federal income tax and FICA withholding amounts, as well as any attendant increase in federal and state unemployment taxes.

Clients should also periodically check with the Texas Workforce Commission and/or the U.S. Department of Labor to obtain updated wage posters for their work sites.

Clients should also make adjustments in their budgets and business plans to reflect this change and plan for the coming increases in the minimum wage in 2008 and 2009.