What Is The Federal Minimum Wage - Truth or Dare: As an employer, you can pay your employees as much as you want. False. 100% false. Why? Because of the minimum wage law.
But what is the minimum wage? Depending on where your business is located, you may be subject to different federal, state, and local minimum wages. Learn about the minimum wage to ensure your business complies with labor laws.
What Is The Federal Minimum Wage
The minimum wage is the lowest amount an employee can be paid for each hour worked. You can pay more than minimum wage if you want, but you can't pay less than minimum wage.
Top Economic Lesson Of 2019: Raise The Minimum Wage
Since the minimum wage law does not apply to independent contractors, it is important to properly classify your employees.
What if the state minimum wage is lower than the federal minimum wage? What if the local minimum wage is lower than the federal minimum wage?
If the state or local minimum wage is lower than the federal minimum wage, you must pay your employees at least the federal minimum wage.
What if the state or local minimum wage is higher? If the state or local minimum wage is higher than the federal rate, the state or local minimum wage is higher for the employee.
Federal Minimum Wage
Advice. Whether you choose a federal, state or local minimum wage law, always pay your workers the highest wage.
The federal minimum wage is set by the Fair Labor Standards Act (FLSA) and enforced by the US Department of Labor (DOL).
So what is the national minimum wage? The current federal minimum wage is $7.25 an hour. However, the federal minimum wage may increase in the coming years.
But if you don't know all the rules of the FLSA, you could be breaking them and paying big bucks. Check out our FREE introductory FLSA cheat sheet to learn FLSA regulations, find must-have resources, and more.
Here's How Much The Federal Minimum Wage Fell This Year
Each country can set its own minimum wage. If the state minimum wage is higher than the federal minimum, workers are paid at least the state minimum wage.
For example, Ohio has a minimum wage of $9.30 an hour by 2022. If you have employees in Ohio, you must pay them at least the state minimum wage because the federal minimum wage is higher than $7.25.
Several states have passed legislation to raise the national minimum wage to $15.00 for a given year. For example, Connecticut Public Law 19-4 requires the state's minimum wage to increase every year for five years. Connecticut is following this minimum wage increase schedule, so the state is on track to reach a $15.00 minimum wage by 2023.
Use the map below to see which states follow the federal minimum wage and which set their own.
Federal Minimum Wage
You may be wondering what the minimum wage is in your country. To find out, check out our national minimum wages below. Remember that states follow the federal minimum wage at $7.25.
Businesses that provide health insurance to their employees can pay $1.00 less than the minimum wage.
$8.75 ($7.25 for employers with fewer than six non-exempt employees in single, separate, permanent positions)
*These states do not have a national minimum wage. Instead, most employers must pay the federal minimum wage.
As New Industries Became Covered By The Federal Minimum Wage, More Black Workers Were Covered, But Often At Lower Wages
**In these states, the minimum wage for any employer not covered by the Fair Labor Standards Act is $5.15. Most employers are covered by the FLSA and must pay the federal minimum wage of $7.25.
Pay attention to! National minimum wage laws are constantly changing. Check your state's website periodically for the latest information on your state's minimum wage requirements.
Some cities and states set local minimum wages that differ from state or federal rates. Local wages are most common in big cities. If the local minimum wage is different from the national minimum wage, employers must pay the higher of the two rates.
For example, the minimum wage in San Francisco is $16.32 an hour. Employers in San Francisco must pay employees at least the local minimum wage, which is higher than the state and federal minimums.
Minimum Wage Increases Effective Jan. 1
Use the chart below to get started. However, this list may not be comprehensive, so check your city's laws.
$15.75 (Employers with 500 or fewer employees pay $1.52 per hour for health benefits and/or employees receive $1.52 per hour in tips)
$17.27 (employers with 500 or fewer employees do not pay $1.52 per hour in health benefits and/or employees are tipped at $1.52 per hour)
Local rates are subject to change, as are national minimum wages. Please contact your local authority for more information.
The Federal Minimum Wage Doesn't Really Matter Anymore
The FLSA currently allows tip credits, which reduce the federal minimum wage for tipped employees. Since tipped employees make up the residual salary, the base salary may be lower.
The federal minimum wage is currently $2.13. This applies to workers who earn more than $30 per month.
Certain states may also have minimum wage laws for salaried workers. Check your state's minimum wage laws to learn more.
The FLSA specifically authorizes a minimum wage for youth workers. You can pay workers under 20 $4.25 for the first 90 days of work. After 90 consecutive days of work or when the employee turns 20 (whichever comes first), the minimum wage must be paid.
Free Federal Minimum Wage (spanish) 2023
In some states, the youth minimum wage is higher than the federal youth minimum wage. For more information, visit the US Department of Labor website.
When researching state and local minimum wage laws, you may see the term "living wage." For example, Nassau County, New York uses a living wage rather than a minimum wage. So what is the living wage?
The living wage is a state or local minimum wage that is higher than the federal or state minimum wage. Lawmakers can set those wages to meet or exceed federal poverty guidelines for a family of four. Alternatively, they may choose a minimum living wage based on the cost of living in a particular geographic area. The purpose of the Living Standards Act is to reduce poverty by increasing income.
Some living wage laws may provide for paid vacation, health insurance, or other benefits for employees.
Minimum Wage In Charts: History Of U.s. Federal Minimum Wage, State_by State Comparison, Other Countries And By Industry
Minimum wage and living wage laws may overlap. Or instead of raising the minimum wage, a minimum living wage could be introduced.
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The $1.9 trillion stimulus package signed by President Biden on March 11 includes a broad spending measure aimed at supporting the U.S. economy, with a special focus on low-income households. America's bailout offers direct payments of up to $1,400 to many Americans; Extending unemployment insurance benefits by $300 per week; extension of the child tax credit by one year; $20 billion spent on Covid-19 vaccination efforts; and $4.5 billion for the Low-Income Home Energy Assistance Program, which helps people pay their utility bills. And that's just the beginning.
The legislation includes an increase in the federal minimum wage to $15 an hour. The federal minimum wage is $7.25 an hour. The proposal to boost the dollar was originally part of the stimulus bill. But the Senate voted 58-42 against an amendment to include the wage increase in the package after Senate lawmakers ruled that the increase was not covered by the budget reconciliation rule.
The Us Federal Minimum Wage
Efforts to raise the federal minimum wage are expected to continue. Sen. Bernie Sanders (I-Vt.) and other progressives have vowed to continue their push for a $15 wage increase, and recent polls show a majority of Americans support it. Sen. Joe Manchin (D-W.Va.), a critical voter in the somewhat divided Senate, supports a smaller increase to $11 an hour.
Raising the federal minimum wage to $15 an hour by 2025 would raise wages for millions of workers and lift about 900,000 people out of poverty, but it could eliminate 1.4 million jobs and increase the deficit, the Congressional Budget Office said last month. increased by 54 billion dollars.
The four charts below show how the current US federal minimum wage has risen historically; how the United States compares to the rest of the world; What are the state minimums across the US; Which industry has the highest percentage of minimum wage workers?
The last time the US raised the federal minimum wage from $6.55 to $7.25 an hour was in July 2009, as it emerged from recession. A rate of $7.25 in mid-2009 would be $8.81 an hour in 2021. For most of the 1960s and 1970s, the federal minimum wage was more than $10 an hour in today's dollars, adjusted for inflation. When the federal minimum wage was raised from $1.40 to $1.60 an hour in February 1968, it was the equivalent of $12.24 an hour in 2021.
Most Violators Of Us Federal Minimum Wage And Overtime Laws Face Relatively Lenient Penalties
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