HOUSE BUSINESS AND INDUSTRY COMMITTEE SUBSTITUTE FOR

HOUSE BILL 258

47th legislature - STATE OF NEW MEXICO - second session, 2006

AN ACT

RELATING TO PAYMENT OF WAGES; INCREASING THE STATE MINIMUM WAGE; EXPANDING EXEMPTIONS; PROVIDING FOR A TRAINING WAGE; PREEMPTING LOCAL INCREASES FOR FOUR YEARS; PRESERVING LOCAL ORDINANCES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     Section 1. Section 50-4-21 NMSA 1978 (being Laws 1955, Chapter 200, Section 2, as amended) is amended to read:

     "50-4-21. DEFINITIONS.--As used in the Minimum Wage Act:

          A. "employ" includes suffer or permit to work;

          B. "employer" includes any individual, partnership, association, corporation, business trust, legal representative or any organized group of persons employing one or more employees at any one time, acting directly or indirectly in the interest of an employer in relation to any employee, but shall not include the United States, the state or any political subdivision thereof; and

          C. "employee" includes any individual employed by any employer, but shall not include:

                (1) any individual employed in domestic service in or about a private home;

                (2) any individual employed in a bona fide executive, administrative or professional capacity and foremen, superintendents and supervisors;

                (3) any individual employed by the United States or by the state or any political subdivision thereof;

                (4) any individual engaged in the activities of an educational, charitable, religious or nonprofit organization where the employer-employee relationship does not, in fact, exist or where the services rendered to such organizations are on a voluntary basis. The employer-employee relationship shall not be deemed to exist with respect to any individual being served for purposes of rehabilitation by a charitable or nonprofit organization, notwithstanding the payment to the individual of a stipend based upon the value of the work performed by the individual;

                (5) salesmen or employees compensated upon piecework, flat rate schedules or commission basis;

                (6) students regularly enrolled in primary or secondary schools working after school hours or on vacation;

                (7) registered apprentices and learners otherwise provided by law;

                (8) persons eighteen years of age or under who are not students in a primary, secondary, vocational or training school;

                (9) persons eighteen years of age or under who are not graduates of a secondary school;

                (10) persons employed by ambulance services;

                (11) G.I. bill trainees while under training;

                (12) seasonal employees of any employer obtaining and holding a valid certificate issued annually by the [state labor commissioner] director of the labor and industrial division of the labor department. The certificate shall state the job designations and total number of employees to be exempted. In approving or disapproving an application for a certificate of exemption, the [commissioner] director shall consider the following:

                     (a) whether such employment shall be at an educational, charitable or religious youth camp or retreat;

                     (b) that such employment will be of a temporary nature;

                     (c) that the individual will be furnished [his] room and board in connection with such employment, or if the camp or retreat is a day camp or retreat, the individual will be furnished board in connection with such employment;

                     (d) the purposes for which the camp or retreat is operated;

                     (e) the job classifications for the positions to be exempted; and

                     (f) any other factors that the [commissioner] director deems necessary to consider;

                (13) any employee employed in agriculture:

                     (a) if such employee is employed by an employer who did not, during any calendar quarter during the preceding calendar year, use more than five hundred man-days of agricultural labor;

                     (b) if such employee is the parent, spouse, child or other member of [his] the employer's immediate family; for the purpose of this subsection, employer shall include the principal stockholder of a family corporation;

                     (c) if such employee: 1) is employed as a hand-harvest laborer and is paid on a piece-rate basis in an operation [which] that has been, and is customarily and generally recognized as having been, paid on a piece-rate basis in the region of employment; 2) commutes daily from [his] the employee's permanent residence to the farm on which [he] the employee is so employed; and 3) has been employed in agriculture less than thirteen weeks during the preceding calendar year;

                     (d) if such employee, other than an employee described in Subparagraph (c) of this paragraph: 1) is sixteen years of age or under and is employed as a hand-harvest laborer, is paid on a piece-rate basis in an operation [which] that has been, and is generally recognized as having been, paid on a piece-rate basis in the region of employment; 2) is employed on the same farm as [his] the employee's parent or person standing in the place of [his] the parent; and 3) is paid at the same piece-rate as employees over age sixteen are paid on the same farm; or

                     (e) if such employee is principally engaged in the range production of livestock; [or]

                (14) persons employed by a food processor if the food processor has obtained a valid certificate of exemption issued annually by the director of the labor and industrial division of the labor department. The director shall adopt rules and procedures for issuing a certificate pursuant to this paragraph. The director shall issue a certificate if the food processor:

                (a) obtains a resolution from the local governing body where the business is located that supports the exemption sought by the food processor;

                (b) demonstrates that economic hardship would result without the exemption; and

                (c) meets other requirements as established by rule; or

                [(14)] (15) employees of charitable, religious or nonprofit organizations who reside on the premises of group homes operated by such charitable, religious or nonprofit organizations [for mentally retarded or emotionally or developmentally disabled persons]."

     Section 2. Section 50-4-22 NMSA 1978 (being Laws 1955, Chapter 200, Section 3, as amended by Laws 2005, Chapter 302, Section 1 and by Laws 2005, Chapter 306, Section 1) is amended to read:

     "50-4-22. MINIMUM WAGES.--

          A. An employer [except as provided in Section 50-4-21 NMSA 1978] shall pay an employee the minimum wage rate of [five dollars fifteen cents ($5.15)] six dollars seventy-five cents ($6.75) an hour after December 31, 2006 and seven dollars fifty cents ($7.50) an hour after December 31, 2007, except that an employer furnishing food, utilities, supplies or housing to an employee who is engaged in agriculture may deduct the reasonable value of such furnished items from any wages due to the employee.

          B. An employee [subject to Subsection A of this section] who customarily and regularly receives more than thirty dollars ($30.00) a month in tips shall be paid a minimum hourly wage of two dollars thirteen cents ($2.13). The employer may consider tips as part of wages, but the tips combined with the employer's cash wage shall not equal less than [five dollars sixty cents ($5.60) per hour] the minimum wage rate as provided in Subsection A of this section. All tips received by such employees shall be retained by the employee, except that nothing in this section shall prohibit the pooling of tips among employees.

          C. An employee [subject to the provisions of Subsection A of this section] shall not be required to work more than forty hours in any week of seven days, unless the employee is paid one and one-half times the employee's regular hourly rate of pay for all hours worked in excess of forty hours. For an employee who is paid a fixed salary for fluctuating hours and who is employed by an employer a majority of whose business in New Mexico consists of providing investigative services to the federal government, the hourly rate may be calculated in accordance with the provisions of the federal Fair Labor Standards Act of 1938 and the regulations pursuant to that act; provided that in no case shall the hourly rate be less than the federal minimum wage.

          D. On January 1, 2009 and on January 1 of each successive year, the minimum wage rate shall be increased by the increase in the cost of living. The increase in the cost of living shall be measured by the lesser of three percent or the percentage increase as of August of the immediately preceding year over the level as of August of the previous year of the consumer price index for all urban consumers, United States city average for all items, or its successor index as published by the United States department of labor or its successor agency, with the amount of the minimum wage increase rounded to the nearest multiple of five cents ($.05). The labor and industrial division of the labor department shall publish by November 1 of each year the adjusted minimum wage rates that shall take effect the following January 1."

     Section 3. A new section of the Minimum Wage Act is enacted to read:

     "[NEW MATERIAL] TRAINING WAGE--DISQUALIFICATION.--

          A. An employer may pay a training wage of not less than five dollars fifteen cents ($5.15) an hour or the federal minimum wage, whichever is higher, to a new employee in the first sixty days of employment. A new employee is a person who has not previously been employed by that employer.

          B. An employer shall not take any action to displace an employee for the purpose of hiring another employee at the training wage set forth in this section. Displacing an employee includes termination of employment, layoff and partial displacement such as reduction in hours, wages or employment benefits.

          C. If the director of the labor and industrial division of the labor department determines that an employer has violated the provisions of this section, the director shall disqualify the employer from paying a training wage to any employee.

          D. The director may adopt rules and procedures governing disqualification of employers pursuant to this section."

     Section 4. A new section of the Minimum Wage Act is enacted to read:

     "[NEW MATERIAL] TEMPORARY STATE PREEMPTION--SAVING CLAUSE.--

          A. Cities, counties, home rule municipalities and other political subdivisions of the state are prohibited from adopting or continuing in effect any law or ordinance that would increase the minimum wage rates set forth in the Minimum Wage Act. The provisions of this subsection expire on December 31, 2010.

          B. A local law or ordinance, whether advisory or self-executing, in effect on February 1, 2006, that provides for a higher minimum wage rate than that set forth in the Minimum Wage Act shall continue in full force and be given full effect until repealed."

     Section 5. EFFECTIVE DATE.--The effective date of the provisions of this act is January 1, 2007.

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