Overview: Federal minimum wage law requires that all nonexempt employees be paid at least $7.25 for every hour they work; this is the federal minimum wage. Twenty-six states have (or will soon have) even higher minimum wages.
Since about 97 percent of the American workforce earns more than the minimum wage, very few employers need to concern themselves with this baseline requirement. Nevertheless, an employer that makes agreed-upon deductions from an employee's pay – for example, deductions for cleaning uniforms – must be careful that the deductions do not bring the employee's wage below the applicable minimum rate.
To comply with minimum wage laws, an employer can apply certain payments – most notably, tips that wait staff, bartenders and other tipped employees receive for service, and the cost of board and lodging – toward its minimum wage obligations.
Also, minimum wage laws allow certain employees – including students, workers with disabilities, messengers, apprentices and student-learners – to be paid at subminimum wages below the normal rate.
Trends: To help employees keep pace with the rising cost of living, 14 states adjust (or will adjust) their minimum wage rates based on the rate of inflation. Lawmakers have introduced legislation that would do the same in other states, and at the federal level.
Author: Michael Cardman, Legal Editor
Updated to reflect the 2018 annual inflation adjustment to South Dakota's minimum wage.
Updated to reflect information on a 9th Circuit ruling regarding the tip credit for employees who perform dual jobs / sidework.
Updated to reflect amendments to Santa Clara's minimum wage ordinance, effective September 21, 2017.
Updated to reflect an amendment to the tip pools law, effective September 3, 2017.
In-depth review of the spectrum of Missouri employment law requirements HR must follow with respect to minimum wage.
Updated to reflect forthcoming increases in the minimum wage.
Updated to reflect an increase in Arkansas's minimum wage, effective January 1, 2017.
HR and legal considerations for employers regarding FLSA minimum wage laws. Support on following rules and regulations regarding this topic.