True or false: As an employer, you may pay staff any quantity you need. False. It’s 100% false. Why? Due to minimal wage legal guidelines.
However, what’s minimal wage? Relying on your enterprise’s location, you might have differing federal, state, and native minimal wage charges. To make sure your enterprise is compliant with labor legal guidelines, get to know minimal wage.
What’s minimal wage?
The minimal wage is the lowest quantity you may legally pay an worker per hour of labor. You’ll be able to pay greater than the minimal wage should you’d like, however you can not pay lower than the minimal wage.
Minimal wage legal guidelines don’t apply to impartial contractors, so it’s essential to just be sure you classify your staff accurately.
Who units the minimal wage?
The federal authorities units a regular minimal wage that applies to all staff in the US. Nevertheless, states and localities can set their very own minimal wage charges, too.
So, which fee do it’s essential to observe? Federal, state, or native?
Federal minimal wage vs. state vs. native
What occurs if a state’s minimal wage is decrease than the federal minimal wage? What about if the native minimal wage is decrease than the federal?
If the state or native minimal wage is decrease than the federal minimal wage, it’s essential to pay your staff at the very least the federal minimal wage fee.
What about if the state or native minimal wage is larger? If the state or native minimal wage is larger than the federal fee, pay your staff the state or native fee, whichever is larger.
Professional tip: When selecting between federal, state, and native minimal wage legal guidelines, all the time pay your staff the best fee.
What’s the federal minimal wage?
The federal minimal wage is ready by the Honest Labor Requirements Act (FLSA) and enforced by the U.S. Division of Labor (DOL).
Though the federal minimal wage fee is topic to vary, it has not elevated since 2009.
So, what’s the nationwide minimal wage? The present federal minimal wage is $7.25 per hour. Nevertheless, the federal minimal wage might probably enhance in upcoming years.
Minimal wage by state
Every state can set its personal minimal wage. If a state’s minimal wage is bigger than the federal minimal, pay staff at the very least the state’s minimal wage.
For instance, the minimal fee in Ohio is $9.30 per hour for 2022. When you’ve got staff in Ohio, it’s essential to pay them at the very least the state’s minimal since it’s higher than the federal minimal wage of $7.25.
Plenty of states handed laws to extend the state’s minimal wage to $15.00 by a particular yr. For instance, Connecticut’s Public Act No. 19-4 requires the state’s minimal wage to extend yearly over a five-year interval. As a result of Connecticut follows this minimal wage enhance schedule, the state is on monitor to achieve a minimal wage of $15.00 by 2023.
Use the map beneath to see which states observe the federal minimal wage fee and which set their very own minimal.
You is perhaps questioning how a lot minimal wage is in your state. Take a look at our state-by-state minimal wage fee chart beneath to seek out out. Remember that the states with $7.25 observe the federal minimal wage base.
[State minimum wages as of 2/7/2022]
*These states should not have a state-mandated minimal wage. As an alternative, most employers should pay the federal minimal wage.
**These states have a minimal wage of $5.15 for any employers who are usually not lined by the Honest Labor Requirements Act. Most employers are lined by the FLSA and should pay the federal minimal wage of $7.25.
Heads up! State minimal wage legal guidelines are ever altering. Keep up-to-date together with your state’s minimal wage necessities by periodically checking your state’s web site.
Native minimal wage
Some cities and counties create a neighborhood minimal wage that differs from state or federal charges. Native wages are most typical in larger cities. Employers should pay the larger of the 2 charges if the native minimal wage is totally different from the state minimal wage.
For instance, the minimal wage in San Francisco is $16.32 per hour. Employers in San Francisco should pay staff at the very least the native base wage as a result of it’s higher than each the state and federal minimums.
Use the chart beneath to get began. Nevertheless, verify your metropolis’s legal guidelines, as this is probably not an all-inclusive checklist.
[Local minimum wages as of 2/7/2022]
|Metropolis / State||Native Minimal Wage|
|Alameda, California||$15.00 (+ annual enhance adjustment on July 1, 2022)|
|Albuquerque, New Mexico||$11.50|
|Bernalillo County, New Mexico||$9.45 (use the state minimal wage of $11.50)|
|Chicago, Illinois||$14.00$15.00 (employers with 21 or extra staff)|
|Cook dinner County, Illinois||$13.00 (some municipalities choose out of the county minimal wage)|
|Daly Metropolis, California||$15.53|
|El Cerrito, California||$16.37|
|Fremont, California||$15.00 (employers with fewer than 25 staff)
$15.25 (employers with 26 or extra staff)
Efficient July 1, 2022, all employers should pay the big employer minimal wage
|Las Cruces, New Mexico||$11.50|
|Los Altos, California||$16.40|
|Los Angeles, California||$16.04|
|Malibu, California||$15.00 (+ annual enhance adjustment on July 1, 2022)|
|Menlo Park, California||$15.75|
|Minneapolis, Minnesota||$12.50 (employers with 100 or fewer staff)
$14.25 (employers with greater than 100 staff)
*Charges change on July 1, 2022
|Montgomery County, Maryland||$13.50 (employers with 10 or fewer staff)
$14.00 (employers with 11 – 50 staff)
$15.00 (employers with 51 or extra staff)
|Mountain View, California||$17.10|
|Nassau County, New York||$17.57 (if the employer doesn’t supply well being advantages)
$15.20 (if the employer does supply well being advantages)
|New York Metropolis, New York||$15.00|
|Palo Alto, California||$16.45|
|Prince George’s County, Maryland||$15.00|
|Redwood Metropolis, California||$16.20|
|Rockland, Maine||$13.00 (employers with greater than 25 staff)|
|Saint Paul, Minnesota||$12.50 (will increase to $15.00 on July 1, 2022)|
|San Carlos, California||$15.77|
|San Diego, California||$15.00|
|San Francisco, California||$16.32|
|San Jose, California||$16.20|
|San Leandro, California||$15.00|
|San Mateo, California||$16.20|
|Santa Clara, California||$16.40|
|Santa Fe Metropolis, New Mexico||$12.32|
|Santa Fe County, New Mexico||$12.32|
|Santa Monica, California||$15.00|
|SeaTac, Washington||$17.53 (for workers in hospitality and transportation industries)|
|Seattle, Washington||$15.75 (employers with 500 or fewer staff who pay $1.52 per hour towards medical advantages and/or staff earn $1.52 per hour in ideas)
$17.27 (employers with 500 or fewer staff who don’t pay $1.52 per hour towards medical advantages and/or staff earn $1.52 per hour in ideas)
$17.27 (employers with 501 or extra staff)
|Sonoma, California||$14.00 (employers with 25 or fewer staff)
$15.00 (employers with 26 or extra staff)
|South San Francisco, California||$15.80|
|Suffolk County (Lengthy Island), New York||$15.00|
|Tucson, Arizona||$13.00 (starting April 1, 2022)|
|West Hollywood, California||$17.64 (resort staff)
$15.00 (employers with fewer than 50 staff)
$15.50 (employers with 50 or extra staff)
|Westchester County, New York||$15.00|
Like state minimal wage charges, native charges are topic to vary. Test together with your native authorities for extra data.
Exceptions to minimal wage
There are some exceptions to paying your staff minimal wage. Minimal wage varies for:
Minimal wage for tipped staff
The FLSA at present permits a tip credit score, which reduces the federal minimal wage for tipped staff. Tipped staff can have a decrease base wage as a result of their ideas ought to make up the remainder of their wages.
The federal tipped minimal wage is at present $2.13. This is applicable to staff who earn greater than $30 in ideas monthly.
Particular person states can even have minimal wage legal guidelines for tipped staff. Test your state’s tipped minimal wage legal guidelines to study extra.
Youth minimal wage
The FLSA additionally permits a particular youth minimal wage. You’ll be able to pay staff beneath age 20 a wage of $4.25 for the primary 90 days of employment. After 90 consecutive days of employment or the worker reaches 20 years of age (whichever comes first), the worker should obtain the minimal wage.
Some states have a youth minimal that’s higher than the federal youth minimal wage. For extra data, try the U.S. Division of Labor’s web site.
Dwelling wage vs. minimal wage
When trying via state and native minimal wage legal guidelines, you might even see the time period “dwelling wage.” For instance, Nassau County, NY makes use of dwelling wage rather than minimal wage. So, what’s a dwelling wage?
A dwelling wage is a state or native minimal wage that’s larger than the federal or state minimal wage. Lawmakers might set these wages to fulfill or exceed federal poverty pointers for a household of 4. Or, they might select the dwelling wage to accommodate the price of dwelling in a particular geographic area. The aim of dwelling wage legal guidelines is to lower poverty via elevated earnings.
Some dwelling wage legal guidelines can also mandate paid time without work, medical health insurance protection, or different advantages for workers.
Minimal wage and dwelling wage legal guidelines might overlap. Or, dwelling wage legal guidelines could also be enacted rather than efforts to extend minimal wage charges.
This text has been up to date from its unique publication date of March 22, 2012.
This isn’t meant as authorized recommendation; for extra data, please click on right here.