Minimum Wage

Decoding Minimum Wage: Unveiling the Wage Baseline

Understanding Minimum Wage: Foundations and Regulations

Minimum wage stands as the lowest hourly wage an employer can legally pay an employee under the Fair Labor Standards Act (FLSA). As of now, the federal minimum wage for non-exempt U.S. workers stands at $7.25 per hour. However, several states mandate a higher minimum wage, necessitating compliance with state regulations if they surpass the federal baseline.

State Variations: Charting the Minimum Wage Landscape

While the federal minimum wage sets a benchmark, individual states exercise the authority to establish their own minimum wage standards. Washington, D.C. leads with a minimum wage of $15 per hour, effective from July 1, 2020. Following closely are Washington at $13.50 per hour and California at $13 per hour. Conversely, Georgia holds the lowest state minimum wage at $5.15 per hour, requiring employers to adhere to the federal standard due to its subpar rate.

Minimum Wage Dynamics: The Timing of Adjustments

Unlike a predetermined schedule, the federal minimum wage doesn’t witness regular increments. Congressional approval and subsequent presidential endorsement are prerequisites for any adjustment. The most recent federal minimum wage hike occurred in 2009. States, however, have autonomy over their minimum wage adjustments, enabling changes through legislation, ballot initiatives, or state constitutional amendments.

Exemptions Unveiled: Understanding Exceptions to Minimum Wage

Certain categories of employees are exempt from federal minimum wage requirements. This includes commissioned sales employees, farmworkers, seasonal and recreational establishment workers, salaried executive, administrative, professional, and outside sales employees, casual babysitters, companions for the elderly, workers with disabilities, federal criminal investigators, fishing employees, full-time students, newspaper delivery individuals, newspaper employees for limited circulation publications, seamen on non-American vessels, and switchboard operators.

Navigating Tip-Based Wages: Minimum Wage for Tipped Workers

Employers have the flexibility to pay tipped workers a minimum of $2.13 per hour, provided the total (including tips) meets or exceeds the federal or state minimum wage. The employee should retain all tips and consistently earn over $30 in tips monthly. If the tips and the $2.13 hourly wage fall short of minimum wage, the employer is obligated to bridge the gap. Various states may have unique regulations regarding tipped workers.

Youthful Workers and Wage Provisions: Minimum Wage for Under 20s

For employees under 20 years old, a special provision allows employers to pay a minimum wage of $4.25 per hour for the initial 90 days of employment. Post this period or upon reaching the age of 20, the employee must receive the federal or state minimum wage, whichever is higher.