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What is Minimum Wage?

Updated on March 26, 2010

Minimum Wage Law

The minimum wage is the lowest wage that an employer is allowed to pay to workers as defined by State, Local, or Federal Law. Finding out what is minimum wage in your state is pretty easy… you contact your states department of labor. In my State it’s called the Nevada Office of the Labor Commissioner. The Federal Minimum Wage applies to most, but not all States as you’ll find out below.

The Fair Labor Standards Act (FLSA)

The Fair Labor Standards act established a minimum wage, overtime pay, record keeping and youth employment standards for the private sector, Federal, State and Local Governments. Overtime pay at a rate of at least 1.5x the regular rate of pay is required for any employee that works more than 40 hours a week (Any fixed 168 hour period). This law only applies to nonexempt workers; if you are on salary and making above minimum wage your employer does not have to pay you time and a half for the extra hours you put in.

If you are an hourly worker your employer must by law display the official FLSA requirements at your job site. This is done by displaying the official minimum wage poster. Unfortunately at the time of this writing the United States Department of Labor Website is a mess of broken links (You would probably expect that from a Government Site right?). Lawmakers may impose their own minimum wage laws that override Federal Law. For example the State Minimum wage in the State of Washington is $8.55 per hour and California $8.00 per hour (Above the Federal Rate) while Georgia is $5.15 per hour (Below the Federal Rate).

Interesting Minium Wage Fact: The Minimum wage is lower than the poverty level for a single worker household supporting four people. Minimum wage is simply not enough to raise a family, but I believe everyone has already figured this out. There is a lot of debate whether a minimum wage law actually helps or hurts an economy. What is for sure is there is nothing in the constitution that provides with this kind of Government intervention in the workplace. But it seems trivial when compared to the damage the Federal Reserve System imposes on society.

There are exceptions to the Federal Minimum Wage Laws:

  • US Territories are not required to comply with the law
  • Some labor types are exempt – tipped labor must pay $2.13 per hour*
  • State Law can override Federal Law

* The combination of Tips and Labor must equal $7.25 per hour.There are unscrupulous employers that take advantage of this law and require workers to attend meetings and perform services for the company while they know that this is just eating back at commissions already earned.

State Minimum Wage Effective by Law as of July 24, 2009 is $7.25 Per Hour

All States are $7.25 per hour with the following exceptions:

  • California – $8.00 per hour
  • Connecticut - $8.00 per hour
  • Illinois - $8.00 per hour
  • Massachusetts - $8.00 per hour
  • Nevada - $7.55 per hour
  • New Mexico - $7.50 per hour
  • Oregon - $8.40 per hour
  • Rhode Island - $7.40 per hour
  • Vermont - $8.06 per hour
  • Washington - $8.55 per hour

New Minimum Wage Laws by State

  • On November 7, 2006 voters in six states -- Arizona, Colorado, Missouri, Montana, Nevada, and Ohio -- approved measures to raise state minimum wage levels by $1 to $1.70 an hour and index them to inflation.
  • Ohio, Oregon, Missouri, Vermont and ashington have linked their minimum wages to the consumer price index.

Local Cities can also dictate their own minimum wage laws. In San FranciscoCalifornia the minimum wage is $10.36 per hour! In some States companies are allowed to pay a lower minimum wage to workers if they are providing benefits.

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Minium Wage Laws

You probably don't find anything surprising about this Cartoon in light of today's Wall Street Rip Offs!
You probably don't find anything surprising about this Cartoon in light of today's Wall Street Rip Offs!

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