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 an amendment to the Florida Civil Rights Act.
Updated to reflect changes in the tip credit in multiple states and municipalities, effective July 1, 2020.
Updated to reflect changes in the minimum wage in Alameda, Berkeley, Emeryville, Fremont, Los Angeles, Los Angeles County, Malibu, Milpitas, Novato, Pasadena, San Francisco, San Leandro, Santa Monica and Santa Rosa, effective July 1, 2020.
Updated to reflect increases in the statewide minimum wage and tip credit; increases in the Chicago minimum wage and tip credit; increases in the Cook County minimum wage and tip credit; and amendments to the Chicago minimum wage ordinance regarding employee coverage and recordkeeping, effective July 1, 2020.
Updated to reflect an increase in the minimum wage in Montgomery County, effective July 1, 2020.
Updated to reflect an increase in the state minimum wage, effective July 1, 2020.
Updated to reflect amendments to the tip credit for Miscellaneous Industries and Occupations, effective June 30, 2020.
Updated to reflect increases in the state's three-region minimum wage, effective July 1, 2020.