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
The Minimum Wage, FMLA and Other Leaves sections of the Employment Law Manual have been updated after the San Diego City Council overrode a veto of its new minimum wage and paid sick leave ordinance.
In-depth review of the spectrum of California employment law requirements HR must follow with respect to minimum wage.
If the council overrides an expected veto, the minimum wage will start at $9.75, effective January 1, 2015, then rise to $10.50 in 2016 and to $11.50 in 2017. Starting January 1, 2019, and every January 1 thereafter, the minimum wage will be adjusted for inflation.
In-depth review of the spectrum of Minnesota employment law requirements HR must follow with respect to Minimum Wage.
Many states have minimum wage requirements. This Quick Reference chart sets forth the state minimum wage rates for all 50 states plus the District of Columbia.
The Nevada Supreme Court's ruling in Thomas v. Nev. Yellow Cab Corp. effectively eliminates minimum wage exemptions for certain casual babysitters, domestic service employees, outside salespersons, taxicab and limousine drivers, agricultural employees and workers with disabilities.
A recently passed amendment will raise Rhode Island's minimum wage from $8.00 to $9.00, effective January 1, 2015.
In-depth review of the spectrum of Rhode Island employment law requirements HR must follow with respect to minimum wage.
With the federal minimum wage holding steady for five years and counting, more and more states are taking matters into their own hands by raising their minimum wages well above the $7.25 federal rate.
HR guidance on complying with federal and state minimum wage laws.