GlossaryHR

The Essential List of Human Resource Definitions You Need to Know

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Minimum Wage Laws

What are minimum wage laws?

A minimum wage law sets the lowest hourly rate an employer can pay an employee who is covered by the law.

What is the federal minimum wage?

The current federal minimum wage is $7.25 per hour. It was enacted July 24, 2009.

Do states/cities/counties have their own minimum wage laws?

29 states and the District of Columbia have a minimum wage law that is different than the federal level. 32 cities and counties raised their minimum wages in 2021. Some of the increases to their minimum wage laws were due to scheduled increases. Others were raised due to cost-of-living mechanisms built into minimum wage laws. Most cost-of-living adjustments are based on the Consumer Price Index (CPI).

Which states raised their minimum wage in 2021?

The following states have minimum wage increases effective during 2021. The highest wage listed became effective January 1, 2021 unless otherwise noted:

  • Alaska $10.19 to $10.34
  • Arizona $12.00 to $12.15
  • Arkansas $10.00 to $11.00
  • California $13.00 to $14.00
  • Colorado $12.00 to $12.32
  • Connecticut $12.00 to $13.00 (effective August 1, 2021)
  • Florida $8.56 to $8.65 to $10.00 (The first increase was effective January 1, 2021, the second increase to be effective September 30, 2021)
  • Illinois $10.00 to $11.00
  • Maine $12.00 to $12.15
  • Maryland $11.00 to $11.75
  • Massachusetts $12.75 to $13.50
  • Minnesota $10.00 to $10.08
  • Missouri $9.45 to $10.30
  • Montana $8.65 to $8.75
  • Nevada $9.00 to $9.75
  • New Jersey $11.00 to $12.00
  • New Mexico $9.00 to $10.50
  • New York $11.80 to $12.50 (effective December 31, 2020)
  • Ohio $8.70 to $8.80
  • Oregon $12.00 to $12.75 (effective July 1, 2021)
  • South Dakota $9.30 to $9.45
  • Vermont $10.96 to $11.75
  • Virginia $7.25 to $9.50 (effective May 1, 2021)
  • Washington $13.50 to $13.69

Which states don’t have a minimum wage law?

Five states have not adopted minimum wage laws: Alabama, Louisiana, Mississippi, South Carolina and Tennessee. Employers in these states must pay the federal minimum wage to non-exempt employees.

What is the most important thing to know about federal and state/local minimum wage laws?

When the laws differ, employers are obligated to pay the minimum wage that is most favorable to the employee. In other words, if your city passes a minimum wage of $14/hr, you can’t pay the employee the federal minimum wage of $7.25.

Who enforces the federal minimum wage?

The federal minimum wage law is contained in the the Fair Labor Standards Act (FLSA). It is enforced by the Wage and Hour Division (WHD) of the U.S. Department of Labor.

What is the minimum wage for workers who receive tips?

You may pay a tipped employee not less than $2.13 an hour in direct wages as long as all three of the following conditions are met:

  1. If $2.13 per hour (or hourly rate above this) plus the tips earned equals at least the federal minimum wage
  2. The employee is allowed to keep all earned tips
  3. The employee customarily receives more than $30 a month in tips
  4. If an employee’s tips combined with their direct wages (at least $2.13/hr) do not equal the federal minimum wage, then the employer must make up the difference

Note: An exception to the rule applies to federal contract workers who receive tips.

Who is covered by the federal minimum wage law?

Most U.S. employees are covered by the minimum wage law:

    • Employees of any business with gross annual sales or business done of at least $500,000
    • Employees of any business that participates in interstate commerce
    • Employees of federal, state, and local government agencies, hospitals and schools
    • Most domestic workers

See also

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