How Much is the Minimum Wage?

Federal and State Minimum Wage Regulations, Exceptions, and History

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What is the minimum wage? Minimum wage is the lowest amount of pay an employer is required to pay an hourly worker. The hourly minimum wage rate you will be paid depends on the state in which you work and the type of job you are working at.

The minimum wage was enacted in the United States in 1938 as part of the Fair Labor Standards Act. The first minimum wage was .25 an hour. The current US minimum wage is $7.25 per hour. However, some states and cities have set minimum wage rates that are higher than the federal minimum.

Review information on federal and state minimum wage rates, and a history of the minimum wage in the US for information on historical minimum wage rates.

Federal Minimum Wage Rate

Effective July 24, 2009, the federal minimum wage is $7.25 an hour for covered non-exempt employees, which means that employers in covered employment categories cannot pay less than $7.25 per hour.

State Minimum Wage Rates

Some states pay a higher minimum wage than the federal minimum. For example, the minimum wage in Florida is $8.25 for 2018, with some cities having a rate higher than the minimum. Here is a list of current state minimum wage rates (2018) you can use to get information on the minimum wage in your location.

If an employee is subject to both the state and federal minimum wage laws, the employee is entitled to the higher of the two minimum wages.

U.S. Minimum Wage History

The United States first introduced statutory minimum wages in 1938. Here's an overview of the history of the minimum wage in the U.S.

Minimum Wage Legislation

The federal minimum wage originated in the Fair Labor Standards Act (FLSA) signed by President Franklin Roosevelt on June 25, 1938. The law established a minimum wage of 25 cents per hour for all employees who produced products shipped in interstate commerce.

Increases in the Minimum Wage

Until 1956, the federal minimum wage was still below a dollar, only rising to $1.15 by 1961. The minimum wage did not reach the current (2017) hourly rate of $7.25 until 2009. Since 1938, the federal minimum wage has been raised 22 times.

In order for the minimum wage to go up, either the federal government or state legislature must pass a law which stipulates a change in the minimum wage. The last time the federal minimum wage was increased was in 2009.

Major U.S. Minimum Wage Increases

  • 1945: $0.40
  • 1950: $0.75
  • 1956: $1.00
  • 1961: $1.15
  • 1963: $1.25
  • 1967: $1.40
  • 1968: $1.60
  • 1974: $2.00
  • 1981: $3.35
  • 1991: $4.25
  • 1997: $5.15
  • 1997: $5.85
  • 2009: $7.25

When Employee Can be Paid Less Than Minimum Wage

There are some employees that can be paid at rates below the hourly minimum wage. Those employees are permitted to be paid at a rate called a submininum wage.

What is Subminimum Wage?
What does subminimum wage mean? There are some employees who can be paid at hourly rates below the minimum wage according to the Fair Labor Standards Act (FLSA). Workers in certain categories of employment can legally be paid less than the federal minimum wage which is currently $7.25 an hour.

These subminimum wage employees include student-learners (vocational education students), and full-time students working in retail, service, agriculture, or higher education.

Employees who fall under this category also include those whose mental or physical disability (due to age, injury, etc.) that impairs their earning or productive ability.

Employment at less than the minimum wage helps to preserve the jobs for workers in these categories. Subminimum wage employment is allowed only under certificates issued by the Wage and Hour Division

Exceptions to Minimum Wage - Tips

An employer of an employer who receives tips is required to pay $2.13 an hour in wages if that amount plus the tips received equals at least the federal minimum wage, the employee retains all tips and the employee customarily and regularly receives more than $30 a month in tips. If an employee's tips combined with the employer's direct wages of at least $2.13 an hour do not equal the federal minimum hourly wage, the employer must make up the difference.

Exceptions to Minimum Wage - Young Workers

A minimum wage of $4.25 per hour applies to young workers under the age of 20 during their first 90 consecutive calendar days of employment with an employer, as long as their work does not displace other workers. After 90 consecutive days of employment or the employee reaches 20 years of age, whichever comes first, the employee must receive a minimum wage of $5.85 per hour.

Other Classes of Workers Exempt from the Minimum Wage

1. Babysitters on a casual basis
2. Companions for the elderly
3. Federal criminal investigators
4. Fishing workers
5. Homeworkers making wreaths
6. Newspaper delivery workers
7. Newspaper employees of limited circulation newspapers
8. Seamen on foreign vessels
9. Switchboard operators
10. Farm workers employed on small farms
11. Employees of certain seasonal amusement and recreational establishments

Minimum Wage Compliance

If your employer is paying you less than the minimum wage, visit the Compliance Section of the US Department of Labor Employment Standards Administration Wage and Hour Division for information on how to proceed.

More About Minimum Wage: Current Minimum Wage Rates Listed by State