Labor Logic

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John D. Finerty, Jr.

The Doyle Administration and state Legislature reached an agreement prior to Memorial Day to raise the Wisconsin’s minimum wage from $5.15 to $5.70, effective June 1, 2005. The minimum wage then moves to $6.50 on June 1, 2006. As part of the legislation to raise the minimum wage, the Governor also enacted a state law that preempts local minimum wage ordinances. As a result, the new $5.70 per hour minimum wage applies statewide for the next year.

Here are the details on the new law and what employers need to do to comply:

The Department of Workforce Development’s New Rules

To explain the basis for increasing the minimum wage and the details on how this new legislation will affect employers, the Department of Workforce Development issued emergency rules on May 11, 2005. The Administrative Code now requires, "All employees except opportunity and minor employees [shall be paid] $5.70 per hour."

The minor minimum wage rate which increases from $5.15 per hour to $5.30; the opportunity minimum wage increases from $4.25 per hour to $5.30 per hour; agricultural employees rates move to $5.15 per hour ($4.25 for minors). Camp counselors also receive increases in minimum weekly rates and the minimum for golf caddies increase from $5.95 for 18 holes to $10.50.

The Department estimates that 100,000 to 125,000 minimum wage employees will be affected by the increase to $5.70 per hour. Further, nearly 80 percent of minimum wage workers are adults, 65 percent are female and over 1/3 are heads of their household. These employees work primarily in the leisure and hospitality industry, that includes employees who work in hotels and motels, restaurants, the arts, entertainment and recreation. According to the Department, the pay of Wisconsin workers in the accommodations and foods industry ranks 49th nationally.

State Law Preempts Local Ordinances

Governor Doyle also signed Assembly Bill 49 that takes effect June 1, 2005. That bill calls for state preemption of local minimum wage ordinances in Wisconsin municipalities. In other words, cities such as Milwaukee and Madison are prohibited by state law from imposing higher minimum wages on employers within the city.

Employer Compliance

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Employers will need to ensure minimum wage employees are paid at the new minimum rates for all work performed beginning June 1, 2005. These rates apply to all employers with at least 1 non-owner employee within the state of Wisconsin. Federal law has not changed, so the federal minimum rate remains at $5.15 per hour.

Because state law is just about all encompassing within Wisconsin, few, if any, employers will be subject to the federal minimum only.

State minimum wage posters may also be changed to reflect the new minimum rates. That is, the Department has released an optional poster for Wisconsin employers. The new Wisconsin minimum wage poster may be downloaded from the Department’s website or by calling the Equal Rights Division of the Department at (608) 266-6860. Copies of the new Wisconsin minimum wage poster are also available from the Wisconsin Manufacturers & Commerce by calling Kim Bautz at (608) 661-6942.

For more information on Wisconsin’s new minimum wage law, contact John D. Finerty, Jr. at Michael Best & Friedrich LLP at (414) 225-8269.