By law, employers in the United States must comply with municipal, state, and federal laws that define the minimum wage at which they pay their employees. In 2009, the federal government mandated a minimum wage of $7.25 per hour, but a number of states and cities have their own laws that are higher than the federal minimum.
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What Is a Minimum Wage?
Minimum wage is often defined as the minimum amount of pay that an employer is required to their employees for the services that are performed during a given pay period. This minimum wage applies differently to employees based on the state that they live in, their age, their position, and their physical and mental disabilities. Salaried employees are generally exempt from federal minimum wage laws.
Though there is a mandatory minimum wage of $7.25 at the federal level, different states and municipalities are permitted to increase the minimum wage to whatever they see fit. Employees are entitled to receive whichever wage is higher in the state that they live in. If, for example, you live in Seattle, Washington, you would be entitled to receive the current municipal minimum wage, which is expected to grow to $15 per hour, rather than the federally mandated minimum wage.
The Fair Labor Standards Act (FLSA) does have exceptions to these rules, which we will cover in further detail below.
Why Was the Minimum Wage Created?
Origins of Minimum Wage
The minimum wage was a concept first conceived of in 1895, when there was a significant increase in the number of bakeries opening in New York. As NPR’s David Kestenbaum and Robert Smith noted, bakeries used to be one of the most deadly places to work, and in an effort to protect workers, the state of New York passed the Bakeshop Act. While this did not explicitly enact a minimum wage in New York, it did successfully improve working conditions for bakers, and limited their work hours.
“It’s an early test of this idea that the government sometimes has an obligation to get between an employer and an employee,” NPR reported.
FLSA and America’s First Minimum Wage Law
The minimum wage as we know it today was a product of the 1938 landmark proposal known as the Fair Labor Standards Act, which was created in order to help combat the Great Depression. In its original form, the FLSA was considered to be revolutionary, creating measures that limited work hours to 44 per week, created child labor laws, and set a federal minimum wage.
Under the FLSA, employers were also legally required to pay workers overtime, if they worked in certain professions. At the time, the country’s minimum wage was $0.25 per hour (which today translates to roughly $4 per hour). Acting president at the time, Franklin D. Roosevelt saw the act as the second-most important piece of New Deal legislation, short only to the enactment of Social Security, and referred to the legislation as “the most far-reaching, farsighted program for the benefit of workers ever adopted in this or any other country.”
Minimum Wage Enforcement and Compliance
While companies weren’t legally required to comply with these measures at the time, Roosevelt incentivized the minimum wage by creating imagery that signified that businesses were on board with minimum wage standards. Those who complied received a sign with a blue eagle, indicating that they were “doing their part.” Those who didn’t have signs in their windows were at risk of being boycotted or losing business.
After much pushback, and several other initiatives, the federal minimum wage was ratified in 1938.
Since then, the act has been amended twice, and the minimum wage is typically adjusted every few years. Recently, it has become a topic of heavy debate. Some have become critical of raising the minimum wage for falling far behind the inflation of the times, while others believe that raising the minimum wage will reduce employment and ultimately be detrimental to American workers.
Minimum Wage Exemptions
There are a number of career paths and individuals who are ineligible to receive minimum wage protections under the FLSA. Those include tipped employees, independent contractors, farm workers, young workers, student workers, and workers with disabilities. Those who perform casual and occasional services (on an as-needed basis), such as babysitting, lawn mowing, or cleaning services are also not-entitled to the minimum wage.
Tipped Employees
Under Federal guidelines, employees who receive part of their compensation with tips, your employer can pay you far less than the otherwise mandated $7.25 per hour. However, your hourly wage combined with the average amount that you earn from tips must be equal to or greater than the federal or state mandated minimum wage.
Many states have banned this practice, instead requiring employers to pay the minimum wage to all of their employees, regardless of whether or not they receive tips.
Contract Workers
The FLSA does not apply minimum wage payment requirements to independent contractors or those who participate in the gig-economy. However, it’s important to know that merely classifying someone as an independent contractor instead of an employee does not automatically prevent a worker from being considered an employee entitled to minimum wage.
Some states, like California, for example, have provided protections for certain independent contractors. In 2014, the California Supreme Court required companies like Uber and Lyft to treat their drivers as employees, therefore protecting them under the state’s minimum wage laws. Similar laws exist in Massachusetts and New Jersey.
There are repercussions for those who misclassify employees as independent contractors. Those who have been found to have misclassified their employees are faced with legal repercussions. Monetary penalties, potential prison sentences, and back wage payments can follow.
Farm Workers
Virtually all employees engaged in agriculture are covered by the FLSA, but there are some who are exempt. If you are related to the owner of a farm on which you work, if you work on a small farm, are paid a piece rate, or if you work with livestock, you may not be entitled to minimum wage protections. These exemptions, as with all exemptions, can be quite technical.
Agricultural workers are also not required to receive time and a half for overtime, according to the FLSA
Student Workers
Full-time students who work in retail, agriculture, or colleges and universities might not be entitled to minimum wage if their employee has a certificate from the U.S. Department of Labor. If this is the case, student employees are still entitled to at least 85 percent of the minimum wage, state or federal.
There are very strict guidelines to this, however, and this typically only applies to occupations that require extended specialized training.
“The student should receive an educational benefit from the relationship, and the training element needs to be educationally sound,” Kathleen Anderson, an attorney practicing in Columbus, Ohio wrote. “Students should not be shortchanged educationally in exchange for their work.”
Young Workers
As far as young workers are concerned, a special minimum wage requirement of $4.25 may be paid to employees who are under the age of 20 years old during their first 90 consecutive calendar days of employment with their employer. After that 90-day period is completed, young employees’ pay must be raised to the minimum wage.
Workers With Disabilities
Since 1938, the FLSA has authorized employers to pay wages that are less than the Federal minimum wage to workers who have disabilities after receiving a certificate from the Wage and Hour Division (WHD) of the U.S. Department of Labor. However, there have been many laws passed since then that have improved the employment rights for individuals with disabilities, perhaps most impactful is The Americans With Disabilities Act of 1990, and the Workforce Innovation and Opportunity Act of 2014.
Still, 20 percent of people with disabilities participate in the workforce, according to the DOL, and of those people, 3 percent of them are paid subminimum wages.
“These workers typically make well below the minimum wage, sometimes as low as ‘pennies per hour,’ according to the Department of Justice,” writes Ashley Dejean for Mother Jones.
Minimum Wage by State
Minimum wage laws vary by state. Below, we’ve highlighted each state’s minimum wage laws. Click through to find more relevant information based on your individual state’s requirements. It should be noted that some municipalities and cities, like Seattle, WA and Portland, ME have minimum wage requirements that are higher than the state laws.
Alabama
$7.25 per hour; No state minimum wage law
Alaska
$ 10.19 per hour
Arizona
$12 per hour
Arkansas
$10.00 per hour
California
$13.00 per hour
Colorado
$12.00 per hour
Connecticut
$11.00 per hour
Delaware
$9.25 per hour
District of Columbia
$14.00 per hour
Florida
$8.56 per hour
Georgia
$7.25 per hour
Hawaii
$10.10 per hour
Idaho
$7.25 per hour
Illinois
$9.25 per hour
Indiana
$7.25 per hour
Iowa
$7.25 per hour
Kansas
$7.25 per hour
Kentucky
$7.25 per hour
Louisiana
$7.25 per hour; No state minimum wage law
Maine
$12.00 per hour
Maryland
$11.00 per hour
Massachusetts
$12.75 per hour
Michigan
$9.65 per hour
Minnesota
$10.00 per hour
Mississippi
$7.25 per hour; No state minimum wage law
Missouri
$9.45 per hour
Montana
$8.65 per hour; subject to a cost-of-living adjustment no later than September 30th of each year
Nebraska
$9.00 per hour
Nevada
$8.25 per hour
New Hampshire
$7.25 per hour
New Jersey
$11.00 per hour
New Mexico
$9.00 per hour
New York
$11.80 per hour
New York is scheduled to continue to increase employee wages each year until the state reaches a $15 per hour minimum wage, and a $10 per hour tipped wage.
North Carolina
$7.25 per hour
North Dakota
$7.25 per hour
Ohio
$8.70 per hour
Oklahoma
$7.25 per hour
Oregon
$11.25 per hour; subject to a cost-of-living adjustment each year
Pennsylvania
$7.25 per hour
Rhode Island
$10.50 per hour
South Carolina
$7.25 per hour; No state minimum wage law
South Dakota
$9.30 per hour
Tennessee
$7.25 per hour; No state minimum wage law
Texas
$7.25 per hour
Utah
$7.25 per hour
Vermont
$10.96 per hour
Virginia
$7.25 per hour; the Virginia minimum wage law does not contain current dollar minimums. Instead the state adopts the federal minimum wage by reference.
Washington State
$13.50 per hour; Washington is scheduled to continue to increase employee wages each year until the state reaches a $13.50 per hour minimum wage. Starting January 2021, the minimum wage will be subject to a cost-of-living adjustment each year
West Virginia
$8.75 minimum wage
Wisconsin
$7.25 per hour
Wyoming
$7.25 per hour
American Samoa
$4.98 to $6.39 per hour; American Samoa’s minimum wage rates are set for particular industries, not for an employee’s particular occupation.
Commonwealth of the Northern Mariana Islands
$7.25 per hour; the CNMI has special minimum wage rates
Guam
$8.75 per hour
Puerto Rico
$7.25 per hour for employees covered by the FLSA; $5.08 per hour for employees not covered by the FLSA
U.S Virgin Islands
$10.50 per hour
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