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 forthcoming Flagstaff minimum wage ordinance.
Updated to reflect the forthcoming San Leandro minimum wage ordinance.
Updated to reflect state preemption of local minimum wage laws, effective March 30, 2017.
Updated to reflect an announcement regarding the state minimum wage rate.
The Walt Disney Company has agreed to pay $3.8 million in back wages to more than 16,000 employees after the US Department of Labor (DOL) found it had violated the minimum wage, overtime and recordkeeping provisions of the Fair Labor Standards Act (FLSA).
Updated to reflect the reinstatement of the St. Louis minimum wage ordinance, effective February 28, 2017.
HR and legal considerations for employers regarding FLSA minimum wage laws. Support on following rules and regulations regarding this topic.