While a number of states took action recently this year to increase their minimum wages and expand overtimes protections, West Virginia moved in the opposite direction. SB 377, which passed and was signed by the governor, exempted seasonal amusement park workers from being eligible for overtime pay, while HB 2048, which was introduced by not taken up, would have exempted seasonal amusement park workers from minimum wage requirements.
These bills highlight an often overlooked aspect of the minimum wage, not all employees are entitled to be paid the minimum wage, with millions nationwide being paid less. The Fair Labor Standards Act allows for businesses to pay certain employees below the minimum wage. These include student workers, certain farm workers, those who work on commission, those who receive tips, seasonal and recreation workers, babysitters, and in some instances youth workers, as well as workers with mental or physical disability. West Virginia has its own set of exemptions in state code.
Between restaurant workers receiving the tipped minimum wage, and the other exemptions there are approximately 66,000 workers in West Virginia earning less than the minimum wage. Below is a breakdown of who these workers are. Some highlights include the majority of workers earning less than the minimum wage are women, 83 percent are over the age of 20, nearly half are either married or a parent, 83 percent have at least a high school diploma, two-thirds live in households earning less than $50,000 per year, more than half work full-time, and only 2,500 have a disability preventing work.
If these workers had been paid the federal minimum wage of $7.25/hour, it would have increased their wages by a total of $214 million, or about $3,200 per worker. If they had been paid the state minimum wage of $8.75 hour, their wages would have gone up by a total of $347 million, or about $5,200 per worker.
One of the easiest ways to address the number of workers earning below the minimum wage would be to eliminate the tipped minimum wage. The tipped minimum wage allows businesses, largely bars and restaurants, to pay workers as little as $2.13/hour ($2.62/hour in West Virginia) under the assumption that their tips will make up the difference. The system acts as a subsidy from consumers to the employers of tipped workers, with customers paying part of the employer wage bill via their tips. The federal tipped minimum wage has not been increased since 1991.
Tipped and other sub-minimum wage earners are a growing portion of the U.S. workforce, and raising their pay is an important step to reducing gender, racial, and income inequality.
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