On May 25, 2007, President Bush signed the Fair Minimum Wage Act of 2007, which will increase the federal minimum wage from $5.15 to $7.25 an hour for actual hours worked; this will occur in several steps over the next two years. The first step, an increase to $5.85 an hour, will occur on July 24, 2007, and subsequent increases will occur on July 24, 2008 and July 24, 2009 to $6.55 and $7.25 an hour, respectively.

These upcoming increases to the federal minimum wage are the first to occur since 1997 and will impact many states that currently have minimum wage below $5.85 or have tied their state minimum wage to the federal minimum wage. Generally, whenever a discrepancy exists between the minimum wage set by the state and federal government, the one that provides a higher hourly minimum wage to employees must be followed.