Overview: The federal Fair Labor Standards Act (FLSA) requires that all nonexempt employees be paid at least $7.25 for every hour they work. Many states and municipalities 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.
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 subminimum wages below the normal rate.
Trends: To help employees keep pace with the rising cost of living, many states and municipalities adjust their minimum wage rates once a year based on the rate of inflation.
Author: Michael Cardman, Legal Editor
Updated to reflect the 2018 annual inflation adjustment to the minimum wage in Santa Fe County.
Updated to reflect the 2018 annual inflation adjustment to the minimum wage in Santa Fe County, New Mexico.
This podcast takes an in-depth look at the many recent California employment law changes with Littler Mendelson attorney Bruce Sarchet, of the firm's Sacramento office.
The actual cost of operating and maintaining a room, not market value, determines how much of a minimum wage credit an employer may claim, the 4th Circuit Court of Appeals ruled in Balbed v. Eden Park Guest House.
Updated to reflect the repeal of the subminimum wage for employees of seasonal amusement and recreational establishments, effective January 1, 2018.
Updated to reflect an increase in the state minimum wage, effective January 1, 2018.