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Big tip for local low-wage workers in 2008

Vermonts lowest paid workers, including wait staff and others who rely on tips for part of their pay, will see more in their paychecks after New Years Day. Thats because Vermonts minimum wage increased from $7.53 per hour to $7.68 per hour on Jan. 1. The Vermont Department of Labor is reminding employers of the changes in an effort to avoid any problems with workers first paychecks. This is important, especially for service and tipped employees because for first time since 2005 their basic wage rate is also increasing from $3.65 to $3.72 per hour, said Vermonts Labor Commissioner, Patricia Moulton-Powden. Vermonts minimum wage increases at the same rate as the August Consumer Price Index (CPI) each year. The CPI increased by two percent. Legislation signed by Gov. Jim Douglas earlier this year also ties basic wages for tipped employees to the CPI. Service or tipped employees are individuals working in hotels, motels, restaurants, or other businesses who customarily and regularly receive more than $120 per month in tips for direct and personal service. Tipped employees total earnings during a pay period must equal or exceed $7.68 per hour. If a combination of tips and the basic wage do not meet that requirement, the employer must make up the difference. Between 16,000 and 20,000 Vermonters receive minimum wage or are service employees who receive part of their compensation through tips, Moulton-Powden said. These workers are the most vulnerable to rising gasoline and home heating fuel prices, and this can help ease that burden. In January 2008 the minimum wage in neighboring states will range from a high of $8 in Massachusetts to a low of $6.50 in New Hampshire. Vermonts minimum wage is the second highest in the region.

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