HB 665-FN-LOCAL – AS AMENDED BY THE HOUSE
06Apr2005… 0853h
2005 SESSION
06/04
HOUSE BILL 665-FN-LOCAL
AN ACT relative to the applicable minimum wage for hourly employees.
SPONSORS: Rep. Keans, Straf 1; Rep. Michon, Hills 25; Rep. Norelli, Rock 16; Rep. Ryan, Merr 2; Rep. M. Smith, Straf 7; Sen. Larsen, Dist 15; Sen. Green, Dist 6
COMMITTEE: Labor, Industrial and Rehabilitative Services
This bill raises the minimum wage for hourly employees.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
06Apr2005… 0853h
05-0758
06/04
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Five
AN ACT relative to the applicable minimum wage for hourly employees.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Minimum Hourly Rate. Amend the introductory paragraph of RSA 279:21 to read as follows:
279:21 Minimum Hourly Rate. Unless otherwise provided by statute, no person, firm, or corporation shall employ any employee at an hourly rate lower than that set forth in the federal minimum wage law, as amended, or as follows, whichever is higher:
Date Hourly Rate
[April 1, 1991 to September 30, 1996 $4.25
October 1, 1996 to August 31, 1997 $4.75]
On and after September 1, 1997 $5.15
On and after September 1, 2005 $5.65
On and after September 1, 2006 $6.15
Tipped employees of a restaurant, hotel, motel, inn or cabin, who customarily and regularly receive more than $20 a month in tips directly from the customers will receive a base rate from the employer of not less than $2.38 per hour. With any change to the minimum wage after the effective date of this section, the employer is responsible to pay employees $2.38 per hour or 45 percent of the applicable minimum wage whichever is higher. If an employee shows to the satisfaction of the commissioner that the actual amount of wages received at the end of each pay period did not equal the minimum wage for all hours worked, the employer shall pay the employee the difference to guarantee the applicable minimum wage. The limitations imposed hereby shall be subject to the following exceptions:
2 Effective Date. This act shall take effect 60 days after its passage.
LBAO
05-0758
Amended 4/18/05
HB 665 FISCAL NOTE
AN ACT relative to the applicable minimum wage for hourly employees.
FISCAL IMPACT:
The Department of Employment Security has determined this bill, as amended by the House (House Amendment 2005-0853h), will increase county expenditures by $5,038 in FY 2006, $45,388 in FY 2007, $45,756 in FY 2008, and $45,756 in FY 2009. Local expenditures will increase by $59,896 in FY 2006, $552,488 in FY 2007, $556,975 in FY 2008, and $556,975 in FY 2009. There will be no fiscal impact on state expenditures or state, county, and local revenue.
METHODOLOGY:
The Department of Employment Security states this bill will increase the minimum wage from $5.15 per hour to $5.65 per hour on September 1, 2005, and from $5.65 per hour to $6.15 per hour on September 1, 2006.
The Department states under the current state employee contract the lowest pay level of any state employee is $7.65 per hour, therefore this bill will have no immediate fiscal impact on the state. The Department estimated the number of county and local government employees that will be affected by each increase in the minimum wage. According to the US Bureau of Labor Statistics, in 2003 there were approximately 19,000 people in New Hampshire who made less than $6.15 per hour. Of those, 2,300 made $5.15 per hour and 16,700 made between $5.16 per hour and $6.14 per hour. The Department assumes 5% of these wage earners are government employees, and of that 5%, the counties employ 7.5% and local governments employ 92.5%. The estimated number of county and local employees in each wage bracket is calculated as follows:
Government County (7.5% of Local (92.5% of
Wage Bracket Statewide (5% of statewide) Government) government)
1 $5.15 2,300 115 9 107
2 $5.16 - $6.14 16,700 835 63 772
The Department states it is likely many of the government employees earning these wages are seasonal or part-time, and therefore assumes they work an average of 20 hours per week, or 1,040 hours per year, and assumes they do not receive medical or retirement benefits. The Department calculated the anticipated increase in annual wages, including the employer’s FICA contribution (7.65%), for each wage bracket.
The Department also calculated additional unemployment insurance benefit costs resulting from increased wages. Most counties and local governments reimburse the unemployment insurance trust fund dollar for dollar in benefits paid. The Department assumes an average of 1.6% of the workforce will receive benefits and the replacement value of benefits will be 57% of the recipient’s wages. The impact during the first year is minimal because benefits are calculated based on wages earned in the first 4 of the 5 preceding calendar quarters and will accordingly lag behind increased wages.
The Department calculated the following annual increased expenditures at the county and local levels:
County
FY 2006 FY 2007 FY 2008 FY 2009
Wage Bracket 1 $5,038 $10,076 $10,076 $10,076
Wage Bracket 2 - 35,266 35,266 35,266
Unemployment Costs - 46 414 414
Total $5,038 $45,388 $45,756 $45,756
Local
Wage Bracket 1 $59,896 $119,792 $119,792 $119,792
Wage Bracket 2 - 432,150 432,150 432,150
Unemployment Costs - 546 5,033 5,033
Total $59,896 $552,488 $556,975 $556,975