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 forthcoming provisions in the Milpitas minimum wage ordinance.
Updated to reflect forthcoming minimum wage ordinances in Flagstaff, Arizona, Milpitas, California and San Leandro, California.
As mandated by the City of Milpitas, California, all covered employers under the Milpitas, California, Minimum Wage Ordinance must post the Milpitas, California, Minimum Wage Notice Poster.
As mandated by the City of Milpitas, California, all covered employers under the Milpitas, California, Minimum Wage Ordinance must post the Milpitas, California, Know Your Rights Poster.
As mandated by the City of St. Louis, Missouri, all employers subject to city's minimum wage law must post this notice and provide it to an employee with the first paycheck subject to this law.