In keeping with the State’s “Live Free or Die” motto, the New Hampshire legislature last week took the unusual step of repealing the State’s minimum wage law. This action, supported by Republican legislators seeking to eliminate what they consider “job killing” regulations, has little practical effect, as the repealed New Hampshire minimum wage was harmonized with the federal minimum of $7.25 per hour. Thus, this repeal only impacts employers not covered by the FLSA, typically limited to small localized businesses operating intra-state with less than $500,000 in annual revenue. In fact, many New Hampshire lawmakers supporting the bill acknowledged that the repeal was in large part symbolic.
One unclear aspect of the amendment pertains to the use of the tip credit under State law. The amendment did not repeal New Hampshire’s provision requiring that a tip credit employee receive “a base rate from the employer of not less than 45% of the applicable minimum wage.” It is unclear whether this provision now can be read to refer to the federal “applicable minimum wage,” or whether New Hampshire law simply defers to the federal requirement. At present, tip credit employees only must receive $2.13 per hour under the FLSA (less than 45% of the federal minimum wage).
“While the legislature obviously felt strongly, this change will have little or zero impact on most state employers of size,” observes Debra Weiss Ford, Managing Partner of Jackson Lewis’ Portsmouth, New Hampshire office. “State employers need to continue to monitor wage/hour compliance, which in many industries is not focused on the minimum wage.”
Other states are unlikely to follow New Hampshire’s lead, as the trend in most state legislatures, including New York and Massachusetts, has been to expand worker protections. We will continue to advise regarding legislative developments in this area, including the recent Congressional hearings on the efficacy of the FLSA.