Minimum Wage FAQ

What is Minimum Wage?

Minimum Wage is the base hourly amount that employers are permitted to pay their workers in the United States. The current Federal Minimum Wage is $7.25 per hour, and many states have their own minimum wage rates. You can use this site to find your state's current minimum wage rate.

There are several exemptions to both federal and state minimum wage law, including employees who recieve tips, students and minors, and several others. These are covered in detail elsewhere in this FAQ.

When will Minimum Wage go up?

Federal Minimum Wage only rises when a bill is passed by the Senate and signed into law by the President. The Federal Minimum Wage was last raised in July 2009, and is raised

Many State Minimum Wages are changed yearly based on a cost of living formula, although each state has their own policies when it comes to cost of living. Raising minimum wage has been a hotly debated topic for decades, with strong arguments both for and against raising the current rate. You can read an article discussing the pros and cons or raising minimum wage here.

When am I entitled to overtime pay?

Federal law states that all workers are entitled to overtime pay of at least 1.5 times the applicable minimum wage for all hours worked over the nationwide overtime limit of 40 hours per week.

Several states also award daily overtime pay, generally for any time worked over a daily limit of 8 hours. This overtime rate is also 1.5 times the applicable minimum wage. Your employer is required to record your hours and pay you at the higher overtime rate when applicable.

Why am I being paid less then Minimum Wage?

There are several exceptions to minimum wage law, most notably employees who receive tips and students or teenagers (see below). In addition to these exceptions, certain types of jobs (including farm labor, seasonal employees, and informal work like babysitting) are exempt from minimum wage laws. You can find a full list of exemptions from minimum wage on the minimum wage exemptions page, and a full list of minimum wage exempt jobs here.

What are the laws concerning employees who recieve tips?

The Federal Labor Standards Act allows employees who receive regular tips to be paid less then Federal Minimum Wage (as little as $2.13/hr) as long as the tips they receive in any given hour plus their wage add up to at least the applicable Minimum Wage. A "tipped employee" is defined as any employee who receives at least $30 in tips a month.

If the tipped employee does not receive enough tips during an hour to add up to the applicable Minimum Wage, their employer must make up the difference. Some states have higher direct wage amounts, but no matter where you are you are always guaranteed to earn at least Federal Minimum Wage in any tipped position.

What are the limitations for students or teenagers?

There are several partial exemptions to Minimum Wage law applicable to students and younger workers. The FLSA allows all workers under 20 years of age to be paid a minimum wage of $4.25/hr for the first 90 days of their employment (as a training period). The workers must be paid full minimum wage after 90 days have passed (or after they turn 20).

Full-time vocational students 16 or older may also be paid at a sub-Minimum Wage rate (75% of the applicable Federal or State Minimum Wage) provided their employer has a certificate from the DOL's "Student Learner Program".

The DOL's "Full-Time Student Program" allow full-time students employed in retail or service stores, agriculture, or colleges and universities to be paid at 85% of the minimum wage as long as they are registered as full-time students.

What must I do as an employer to comply with Minimum Wage law?

As an employer, you are responsible for ensuring that all of your employees are educated about their rights and are paid in compliance with minimum wage and overtime laws applicable in your state.

Employers are also responsible for recording wage information pertaining to their employees, and posting minimum wage and labor law information posters in visible areas throughout the workplace. You can learn more about FLSA compliance laws on the Department of Labor's Compliance Assistance website.

What can I do if my employer is breaking Minimum Wage law?

If your employer is breaching Minimum Wage Law, you can submit an anonymous complaint with the Wage-Hour division of the Federal Department of Labor at 1-866-4-US-WAGE.

Employers who do not comply with the DOL standards are heavily fined, and you (as an employee) may be eligible for restitution, backwages, or even a civil settlement.



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