What is minimum wage?
Minimum wage is the lowest hourly wage allowed by federal and state labor laws. It generally applies to unskilled or semi-skilled laborers working in service industries or manufacturing plants. Certain occupations such as agricultural workers are usually exempt from minimum wage requirements, as are certain service workers who receive tips or other compensation equal to the minimum wage. In the United States, Congress must approve any adjustments to the federal minimum wage law currently in effect. Because of an act passed under the Clinton administration, individual states now have the right to raise their own minimum wage rates above the current federal requirement. There hasn’t always been a minimum wage law to protect unskilled or semi-skilled workers. Until the 1930s, individual wages were determined largely by employers. Workers had to accept whatever compensation was offered or simply remain unemployed.
Currently, the federal minimum wage is $5.15 per hour. The U.S. Department of Labor’s Wage and Hour Division enforces the federal Fair Labor Standards Act (FLSA) that regulates minimum wage rates, overtime pay, child labor and equal pay for employees. Most states have similar laws to the FLSA. Federal minimum wage and state minimum wage can differ. Generally, the wage rate that provides the most benefit to the employee determines the employee’s rate of pay.
According to the United States Department of Labor, the federal minimum wage for hourly, nonexempt employees is $6.55/hour, effective July 24, 2008. Now what this means is that U.S. employees, subject to the Fair Labor Standards Act, must be paid at least $6.55. However, depending on state law (which work in conjunction with federal laws, as opposed to separate and apart from federal law) an employer may need to also pay an employee additional monies to meet a state and/or specific city’s minimum wage laws as well. For example, in much of California, the minimum wage is $8.00/hour. In San Francisco, California the minimum wage is $9.36. So if an employer is subject to federal, state, and local minimum wage laws, a private employer in San Francisco would not have a choice and cannot choose to pay an employee the lower federal or state minimum wage but must pay at least $9.36 to all employees. We know that much of this may seem confusing. If you have questions, please do not hesitate to
Currently $7.25 is the Federal law. Some states have a higher minimum wage that would take priority over the Federal law. However if a states minimum wage is lower than federal minimum wage you must use the federal minimum wage. States with a minimum wage that is higher than Federal include: • California – $8.00 • Colorado – $7.28 • Connecticut – $7.65 (increases to $8.25 01/01/2010) • District of Columbia – $8.25 • Illinois – $8.00 (increases to $8.25 07/01/2010) • Maine – $7.50 • Massachusetts – $8.00 • Michigan – $7.40 • Nevada – $7.55 (with no health insurance benefits) • New Mexico – $7.50 • Ohio – $7.30 • Oregon – $8.40 • Rhode Island – $7.40 • Vermont – $8.06 • Washington – $8.
