Arkansas minimum wage rises to $8.50 on New Year’s Day, now $1.25 above federal standard

Some Arkansas workers will get a 50 cent boost in pay on New Year’s Day when the state’s minimum wage will rise from $8 to $8.50, Arkansas Department of Labor officials said Wednesday (Dec. 28).

“This is the final increment of the (Arkansas Minimum Wage Initiative) that was passed by voters in 2014,” said Rosalyn Miller, public relations officer of the state Department of Labor.

Under the 2014 ballot initiated act, Arkansas’ minimum wage rate was increased from $6.25 to $7.50 per hour in 2015, from $7.50 to $8 in 2016. It will rise the last time from $8 to $8.50 under the voter referred act on Sunday, Jan. 1, 2017.

The act applies to employers who employ four or more employees, and not workers who receive tips, Miller said. According to the federal Department of Labor, there are 29 states, including Arkansas, with minimum wages higher than the federal minimum wage level of $7.25 per hour, which was last raised on July 24, 2009.

Under the nation’s Fair Labor Standards Act (FLSA), in cases where an employee is subject to both the state and federal minimum wage laws, the employee is entitled to the higher of the two minimum wages. Still, the FLSA does not provide wage payment or collection procedures for an employee’s usual or promised wages or commissions in excess of those required by the federal law.

Under outgoing President Barack Obama, raising wages for low and middle-class workers has become a contentious issue between the federal government and private-sector employers. Congress last considered such legislation in April 2014, but the Minimum Wage Fairness Act could not garner enough support in the Senate to proceed to a vote. That measure would have gradually raised the federal minimum wage from $7.25 to $10.10 per hour over a two-year period.

However, President Obama signed an executive order in February 2014 to raise the minimum wage to $10.10 per hour for workers on federal construction and service contracts. That executive order also goes into effect on Sunday, and also affects tipped employees performing work on or in connection with covered contracts who must be paid a minimum cash wage of $6.80 per hour.

In connection with the minimum wage hike for federal contractors, the DOL also in September 2016 implemented President Obama’s executive requiring federal contractors and subcontractors to provide certain employees with up to seven days of paid sick leave annually.

Although President-elect Donald Trump has not expressed any strong view concerning the federal minimum wage, the incoming administration has indicated it may seek to repeal the federal overtime rule that raises the cut-off salary of employees eligible for overtime pay from $23,660 to $47,476 per year.

That rule was due to become effective on Dec. 1, but U.S. Judge Amos Mazzant of the U.S. District for the Eastern District of Texas on Nov. 22 granted plaintiffs an emergency preliminary motion to prevent the DOL from implementing the new overtime rules that the Obama administration said would extend protections to 4.2 million additional Americans not eligible for overtime now under federal law. According to the DOL, all employees would have been entitled to overtime if they earned less than $913 a week – including government employees. The federal injunction, which affects salaried employees working over 40 hours per week, will remain in place until the courts reach a final decision on their legality.

In response, the U.S. Department of Justice on behalf of the DOL filed an expedited notice on Dec. 4 to appeal the preliminary injunction to the U.S. Circuit Court of Appeals for the Fifth Circuit in New Orleans. DOL Secretary Tom Perez has requested a schedule that would require the appeal be fully briefed by Feb. 7, 2017, and noticed for argument as soon as possible thereafter.

However, President-elect Trump takes office on Jan. 20 and has indicated he may alter the DOL’s strategy. The incoming president on Dec. 8 chose Andrew Puzder as his nominee to head the Labor Department. Puzder, CEO of CKE Restaurants, the parent company of Hardee’s and CarL’s Jr. fast food outlets, has been a vocal opponent of the Obama administration’s new overtime rules and raising the federal minimum wage standard.

Meanwhile, Miller said the required signage that Arkansas employers must post at workplace on the new state minimum wage standards are available at the state DOL or online here.