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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 include a forthcoming amendment regarding the credit for tipped employees.
At a time when many cities and states are increasing their minimum wage, Missouri will override the $10 St. Louis minimum wage and lower it back to $7.70 to make it consistent with the state's figure.
Updated to reflect the forthcoming Minneapolis minimum wage ordinance.
Updated to reflect increases in the state's three-region minimum wage, effective July 1, 2017.
Updated to reflect changes in the minimum wage in Emeryville, Los Angeles County, Los Angeles, Malibu, Milpitas, Pasadena, San Francisco, San Jose, San Leandro and Santa Monica, effective July 1, 2017.
Updated to reflect the Flagstaff minimum wage ordinance, effective July 1, 2017.
HR and legal considerations for employers regarding FLSA minimum wage laws. Support on following rules and regulations regarding this topic.