Minimum Wage Laws – State and Federal
On July 24, 2009, the federal minimum wage was raised to $7.25. Federal overtime rules require employers to pay one-and-a-half times the employee’s hourly rate for all hours worked over 40 in any workweek, unless the employee performs work that’s considered exempt from overtime (such as salaried executives). Accurate time records are required for all non-exempt employees, and child labor restrictions apply. Federal contractors must also abide by additional wage laws, including minimum wages they must pay.
The federal Fair Labor Standards Act (FLSA) contains some exemptions from the minimum wage requirement. Some exceptions apply to specific types of businesses and others apply to specific types of work. The FLSA also provides for the employment of certain individuals at wage rates below the minimum wage.
HR Guide to Employment Law: A practical compliance reference manual covering 14 topics, including overtime and FLSA requirements
State minimum wage rates
At least 25 states and the District of Columbia currently have minimum wage rates higher than the federal minimum wage. Many of the state laws provide that the state minimum wage rate applies only if it’s higher than the federal minimum wage. Other state laws tie the state minimum wage to the federal minimum wage. As a result, the minimum wage in some states may be affected by the increase in the federal minimum wage. Some municipalities also have their own minimum wage rates as well, so employers need to check local, state, and federal minimum wage laws.
State-by-state comparison of 50 employment laws in all 50 states, including minimum wage
Employees who receive tips
Under the federal wage and hour law, employers that use the “tip credit” are permitted to pay tipped employees a cash wage of $2.13 per hour under the assumption that they will make enough in tips to earn the required minimum wage. The new federal law doesn’t change the required cash payment; nevertheless, employers should ensure that tipped employees earn enough in tips to bring their wages up to the new required federal minimum wage rates.
Audit your minimum wage policies and practices with the Employment Practices Self-Audit Workbook