A new $6.55 minimum wage will be in effect today for all 12 states, including Texas, operating off the federally syandardized minimum wage. UH employers’ concerns, however, are already fixed on next summer as the threshold minimum wage rises incrementally to $7.25 in July 2009.
The Fair Minimum Wage Act, passed in 2007, called for two 70-cent minimum wage raises. On July 24, 2007, the wage increased to $5.85 per hour and will increase again on the same date next year to $7.25 per hour.
To fund the federally mandated minimum wage increase to $7.25, University Center and Associated Facilities Director Keith Kowalka requested a base augmentation of $20,723 in February 2008 for the UCAF in fiscal year 2009, in addition to its $1,317,035 student service fee base budget.
UCAF was denied requested funds by the Student Fees Advisory Committee, which would allow student workers to earn 50 cents more than the new minimum wage.
"If we are not able to reward students for outstanding service and outstanding growth, we just don’t have the ability to succeed and provide service in positive ways," Kowalka said.
The auxiliary department plans to draw from reserve funds and be creative with its budget to ensure students are paid commensurate to skills and job performance.
"We are trying to use a business model for our students and that means giving them incentive for staying and longevity," UCAF Financial Administrator Noel Clarke said.
SFAC has been advised to budget a pool of funds to cover appropriate increases during the next fiscal year.
"Several units requesting funds raised the issue of minimum wage. Lots of our units were compensating students above minimum wage," Dean of Students and SFAC chairman William Munson said. "Departments are accountable for providing the funds if they wish to pay students more than the minimum wage."
Associate Vice President of Finance Jim McShan said while several hundred employees were affected as the minimum wage rose incrementally to $5.15 from $4.25 in 1997, with only 15 employees making less than the required minimum wage this year, the $7.25-increase will have virtually no impact on the system-wide budget.
This year the difference in the newly-elevated minimum wage will be less than $7,000 in UH system’s billion-dollar budget. In summer 2007, 31 employees system-wide were making less than the $5.85 base wage.
Learning and Assessment Services Director Patrick Daniel said, of the 93 students employed by his department, 10 students were making $6.50 an hour and their five-cent pay increases would be implemented by today.
Undergraduate tutors at Learning and Assessment Services start at $9 an hour.
University of Houston Libraries employs 27 students at $6.50 per hour, all of whom will be impacted by the federally mandated increase of $6.55 per hour.
Library Business Administrator Zagui Paredes said the department would offer student employees a $7.50 per hour pay rate starting this fall to keep up with the $7.25 minimum wage, to be implemented next summer.
"We’re trying to recruit more students and with the cost of everything going up we want to stay ahead of the game," Paredes said.
For fiscal year 2008, University of Houston Libraries operated on a $450,000 budget.
Student employees are eligible for a 25-cent merit increase after their first 12 months of employment with a maximum rate of $8.25 per hour.
Student leaders, however, begin with a pay rate of $8.25 per hour and are eligible for a one-time merit increase of 25 cents after their first 12 months with the library.
All 120 students employed by the Campus Recreation and Wellness Center are paid more than minimum hourly wage, so the department will not incur any mandatory adjustments in its budget because of the increase.
