What Is the Minimum Wage?

Minimum wage laws set the lowest hourly rate that employers can legally pay workers. Multiple levels of government set minimum wage rates.

Federal minimum wage. The Fair Labor Standards Act (FLSA) sets the federal minimum wage at $7.25 per hour, a rate that has not changed since 2009.

State minimum wages. As of this writing, more than 30 states and the District of Columbia have set minimum wages above the federal level. Examples include California ($16.00), New York ($15.00+), Washington ($16.28), and Massachusetts ($15.00). Some states have no state minimum wage or set theirs at or below the federal level, in which case the federal rate applies.

Local minimum wages. Many cities and counties have set even higher minimums. Seattle, San Francisco, and Denver are examples.

Which rate applies. You are entitled to the highest applicable rate. If your city minimum is $17, your state minimum is $15, and the federal minimum is $7.25, you earn at least $17.

Tipped employees. The federal tipped minimum wage is $2.13 per hour, but if tips plus the cash wage do not equal the regular minimum wage, the employer must make up the difference. Several states require the full minimum wage before tips.

Exempt employees. Salaried employees who meet certain duties and salary thresholds (executive, administrative, professional) may be exempt from minimum wage and overtime requirements.

Youth and training wages. Limited exceptions exist for workers under 20 (a lower rate for the first 90 days) and student learners.

This is legal information, not legal advice.