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Professional Service Agreement

Increase in Federal Minimum Wage

July 07, 2008

Legislation passed by the U. S. Congress in 2007 mandated increases in the federal minimum wage in three incremental steps. The current minimum wage is $5.85 per hour. Effective July 24, 2008 the federal minimum wage will be $6.55 per hour. After another year, the federal minimum wage will increase to $7.25 per hour effective July 24, 2009.

This increase in the federal minimum wage will obviously affect those businesses that compensate some workers at or near the previous minimum wage. In addition, this change may impact the internal equity of pay structures of some organizations. Prior to making any across the board adjustments in the current pay scales, contact SESCO to discuss the potential impacts and realities of compensation practices.

SESCO also provides to clients specially priced federal (and state) posters that reflect the minimum wage change. These posters will ensure compliance with the federal minimum wage posting requirement. Call SESCO to order your posters, or posters may be fromthis website in our online publicatins store.

Finally, this change in the federal minimum wage needs to be evaluated in light of the minimum wage established by some states. Some states tie their minimum wage to the federal standard, while others may have a minimum wage that is higher than the federal hourly rate. Please contact SESCO should you need clarification on this issue.