The increase bumps up the Federal Minimum Wage to $7.25 an hour, which is a 10.7 percent increase compared to the current hourly rate of $6.55.
It is the third increase in as many years after former President George Bush signed off on the Fair Minimum Wage Act in May 2007, setting each increase at $0.70 an hour from the then-minimum wage of $5.15 an hour.
With the increases coming at a time where the status of the nation's economy in a constant state of flux, concerns have been raised about its affect on local and small business.
"It may affect some small businesses, but you still have to keep up with customer demand," Sam Crawn, owner of Sam's Do-It-Best Hardware, Brazil, said. "But it is required by law, and we have to do what the law says."
One of the major concerns associated with the increase of minimum wage is whether or not it would adversely affect employment.
"We run pretty lean so it won't change the number of employees we have," Crawn told The Brazil Times. "I could see it possibly affecting larger businesses, but a certain level of staffing has to be maintained to effectively serve the customers."
For employers with staff who may receive tips, the minimum wage remains at $2.13 an hour. However, the law states should the employees tips, combined with the minimum wage, do not meet the $7.25 an hour mark, the employer must make up the difference.
For one local restaurant manager, who requested to remain anonymous due to company policy, this stipulation wouldn't have much of an effect.
"Things really shouldn't change here," the manager told The Brazil Times.
Another concern regarding the increased wage rates surrounded the possibility of increased prices being placed on consumers to compensate.
"I can see where some small, or even large businesses may increase their prices to make up for the increased wages they are paying," the manager said. "But, I don't see it happening too much on the local level, and the prices shouldn't change here either."
There is one exception that allows employers to pay less than the Federal Minimum Wage to a select group of individuals in Indiana.
If an employee is under the age of 20, an employer may pay that individual an hourly wage of $4.25 during the first 90 calendar days after employment begins.
The increase to $7.25 is also going into effect today for the Indiana Minimum Wage Law, which covers employees not covered by the federal law.
Currently the State of Washington has the highest minimum wage at $8.55 an hour, while Kansas has a current rate of $2.65 an hour for those not covered by the Federal Minimum Wage Law, although it will be increasing to $7.25 an hour as of Jan. 1, 2010. In addition, five states -- Alabama, Louisiana, Mississippi, South Carolina and Tennessee -- do not have set required minimum wage.
For more information about minimum wage or other labor information, visit www.in.gov/dol.