Districts Should Prepare for Coming Minimum Wage Increase

Administrators take note: The second of three 70-cent increases in the minimum wage goes into effect on July 24, 2008. The increase will raise the minimum wage from the current $5.85 per hour to $6.55 per hour. You should review pay for nonexempt employees and substitutes now to be sure your district stays in compliance with the Fair Labor Standards Act (FLSA).

According to data collected by TASB HR Services for the TASB/TASA Salaries and Benefits in Texas Public Schools survey, nearly 19 percent of Texas school districts pay some current employees less than $6.55 per hour.

Also, administrators should not forget that substitute pay may need a second look, particularly the pay of nondegreed, noncertified subs. Minimum wage rules apply to substitute pay even though substitutes are classified as exempt employees.

Districts whose subs work seven-and-a-half hours must pay more than $50 a day to be in FLSA compliance. When subs work eight hours, districts must pay more than $53 a day to be in compliance. Forty-eight percent of districts (359) have sub rates for at least one pay category (nondegreed, noncertified, etc.) that is less than $53 per day. 

The final increase will come on July 24, 2009, with the minimum wage rising to $7.25 per hour. Before then, more than 40 percent of districts will have to adjust their pay for nonexempt employees to maintain FLSA compliance.

A substantial number of districts will need to raise their sub pay to remain in compliance. By 2009, districts will have to pay at least $58 per day for an eight-hour substitute to meet the minimum wage requirement. This year, 489 districts (65 percent) have a sub daily rate that is less than $58 per day.