What Is the Minimum Wage? Federal vs. State
The minimum wage is the lowest hourly pay an employer may legally pay a covered worker. The federal minimum wage, set by the Fair Labor Standards Act (FLSA), is $7.25 per hour for covered nonexempt employees. Many states, and some cities and counties, set higher minimums; when more than one law applies, the employee is entitled to the highest applicable rate. Special rules apply to tipped workers, young workers, and employees who fall under an FLSA exemption.
What the law says
- The federal minimum wage for covered nonexempt employees is $7.25 per hour. It is set by the Fair Labor Standards Act (FLSA). U.S. Department of Labor, Minimum Wage
- The $7.25 federal rate has been in effect since July 24, 2009, and the U.S. Department of Labor notes that the minimum wage does not increase automatically. U.S. Department of Labor, Wage and Hour Division, Minimum Wage FAQs
- Many states have their own minimum wage laws. Where an employee is covered by both state and federal minimum wage laws, the employee is entitled to the higher of the two rates. U.S. Department of Labor, Minimum Wage
- The Department of Labor says employers must pay the highest applicable minimum wage, whether federal, state, or local, and notes that some local governments set rates higher than their state minimum wage. U.S. Department of Labor, Wage and Hour Division, Consolidated Minimum Wage Table
- According to the Department of Labor's table effective July 1, 2026, seven states and American Samoa have no established minimum wage requirement or have one below the federal minimum wage. U.S. Department of Labor, Wage and Hour Division, Consolidated Minimum Wage Table
- Tipped employees: under the FLSA, an employer may pay a tipped worker a cash wage of at least $2.13 per hour and claim a tip credit of up to $5.12 per hour, as long as tips plus the cash wage reach at least $7.25 per hour. If they do not, the employer must make up the difference. U.S. Department of Labor, Fact Sheet #15: Tipped Employees Under the FLSA
- A tipped employee under federal law is one who customarily and regularly receives more than $30 a month in tips. Some states require a higher cash wage for tipped workers than the federal $2.13. U.S. Department of Labor, Fact Sheet #15: Tipped Employees Under the FLSA
- Young workers: a minimum wage of $4.25 per hour may be paid to employees under age 20 during their first 90 consecutive calendar days of employment, as long as their employment does not displace other workers. U.S. Department of Labor, Minimum Wage
- Exemptions: the FLSA exempts bona fide executive, administrative, professional, and outside sales employees, and certain computer employees, from both minimum wage and overtime pay. These employees generally must meet job-duties tests and be paid on a salary basis of not less than $684 per week. U.S. Department of Labor, Fact Sheet #17A: Exemption for Executive, Administrative, Professional, Computer & Outside Sales Employees Under the FLSA
FAQ
What is the federal minimum wage?
$7.25 per hour for covered nonexempt employees under the Fair Labor Standards Act.
If my state's minimum wage is higher than $7.25, which one applies?
When an employee is covered by both state and federal minimum wage laws, the employee is entitled to the higher rate. The Department of Labor says employers must pay the highest applicable rate, whether federal, state, or local.
Where can I find my state's minimum wage?
The U.S. Department of Labor publishes a state-by-state minimum wage page and consolidated table. It notes that individuals should consult the relevant state labor office for official information.
Can a restaurant pay me less than minimum wage because I get tips?
Under federal law, an employer may pay a tipped employee as little as $2.13 per hour in direct wages only if tips bring the total to at least the federal minimum wage; otherwise the employer must make up the difference. Some states require a higher cash wage.
Does the minimum wage go up automatically?
Not the federal minimum wage. The Department of Labor states that the minimum wage does not increase automatically; the current $7.25 rate took effect July 24, 2009.
Is every worker entitled to minimum wage?
No. The FLSA contains a number of exemptions from the minimum wage that may apply to some workers, including certain salaried executive, administrative, professional, computer, and outside sales employees.
Related
- Can You Get Unemployment If You're Fired?
- Hostile Work Environment: When Harassment Becomes Illegal
- No Tax on Overtime: How the Federal Deduction Works
- What Is At-Will Employment?
- Workplace Harassment: Your Rights Under Federal Law
- Employment Law by state
General legal information, not legal advice. Laws change and local rules can differ; check the linked official source or talk to a lawyer about your situation.