Federal Minimum Wage Raised

President Clinton signed the Small Business Job Protection Act on August 20, 1996. Among other things, this bill raised the federal minimum wage from $4.25 to $4.75 per hour effective October 1, 1996 and to $5.15 per hour effective September 1, 1997.

The bill also created a sub-minimum wage of $4.25 per hour for individuals under the age of 20 in their first 90 calendar days of employment.

The bill did not affect the federal minimum wage of $2.13 per hour for tipped employees. However, Pennsylvania’s law provides that the Pennsylvania minimum wage increases any time the federal minimum wage increases. In Pennsylvania, employers are permitted to meet the minimum wage for tipped employees by applying up to 45% of an employee’s tip income to his hourly wage. Therefore, the current hourly minimum wage for tipped employees in Pennsylvania (which was $2.33 per hour), was increased to $2.61 on October 1, 1996, and will increase to $2.83 on September 1, 1997.
– Mike Beausang

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