What is the federal minimum wage?
Under the Fair Labor Standards Act (FLSA), the federal minimum wage for covered nonexempt employees is $5.85 per hour effective July 24, 2007; $6.55 per hour effective July 24, 2008; and $7.25 per hour effective July 24, 2009. Many states also have minimum wage laws. Where an employee is subject to both the state and federal minimum wage laws, the employee is entitled to the higher minimum wage rate. Various minimum wage exceptions apply under specific circumstances to workers with disabilities, full-time students, youth under age 20 in their first 90 consecutive calendar days of employment, tipped employees and student-learners. What is the minimum wage for workers who receive tips? An employer may pay a tipped employee not less than $2.13 an hour in direct wages if that amount plus the tips received equal 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.
As a result of legislation passed by Congress and signed by the president earlier this year, the federal minimum wage will increase to $7.25 per hour in three steps. The first step, effective July 24, 2007, increased the wage to $5.85 per hour. On July 24, 2008, the wage will increase to $6.55 per hour. The third and final step, effective July 24, 2009, will result in a minimum wage rate of $7.25 per hour.
