Publication Date: June 2007
DCL ID: CB-07-11
Subject: New Federal Minimum Wage and the Federal Work-Study Program.
REFERENCE: This letter supplements Volume 6 of the 2006-2007 Federal Student Aid Handbook.
Posted on 06-18-2007
On May 25, 2007, President Bush signed into law the U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007 (Public Law 110-28). Section 8102 of Public Law 110-28 amended section 6(a) of the Fair Labor Standards Act of 1938 by increasing the Federal minimum wage in three steps. The current Federal minimum wage of $5.15 an hour will be increased to $5.85 an hour effective July 24, 2007, to $6.55 an hour effective July 24, 2008, and to $7.25 an hour effective July 24, 2009.
Section 443(b)(1)(D) of the Higher Education Act of 1965, as amended (HEA), and the implementing regulations at 34 CFR 675.24 specifically state that an institution may not pay any wage to students employed under the Federal Work-Study (FWS) Program that is less than the current Federal minimum wage mandated by section 6(a) of the Fair Labor Standards Act of 1938, as amended. Therefore, effective July 24, 2007, an institution must pay students employed under the FWS Program at least the new Federal minimum wage of $5.85 an hour. Effective July 24, 2008, an institution must pay FWS students at least $6.55 an hour and effective July 24, 2009, at least $7.25 an hour.
The provisions of the Fair Labor Standards Act of 1938, as amended, that provide certain exemptions to the Federal minimum wage do not apply for purposes of the FWS Program. In addition, it is important to note that many States also have minimum wage laws. In instances where an FWS employee is subject to both State and the Federal minimum wage laws, the FWS employee must be paid the higher of the two minimum wages.
If you have questions about the new Federal minimum wage and the FWS Program, please contact the Campus-Based Call Center at (877) 801-7168. Customer service representatives are available Monday through Friday from 8:00 A.M. until 8:00 P.M. (ET). You may also e-mail your questions to CBFOB@ed.gov.
Jeff Baker, Director
Policy Liaison and Implementation
Federal Student Aid
U.S. Department of Education
Publication Date: 6/19/2007