Minimum wage

The minimum wage is the lowest hourly rate an employer is allowed to pay. In the United States it works as a floor, not a single number: the Fair Labor Standards Act (FLSA) sets a federal rate, and states, counties, and cities are free to set higher ones. When more than one rate could apply, the employee is entitled to the highest.

How it works in the United States

The federal rate is set by Congress through amendments to the FLSA and enforced by the US Department of Labor's Wage and Hour Division. Most states set their own rates, many of which adjust on a schedule or with inflation, and some cities set rates higher still.

Which rate applies: wherever the employee actually works — the highest of the federal, state, and local rates.
Tipped employees: federal law lets employers count part of tips toward the minimum through a tip credit, though several states do not allow it.
Youth and training rates: narrow exceptions exist under federal and some state laws, with strict conditions.

Because rates change regularly, check your state labor department and city ordinances rather than relying on a remembered number — especially if you schedule people across locations.

Fair Labor Standards Act of 1938 (FLSA), 29 U.S.C. § 206 — federal rate set by Congress, enforced by the US DOL Wage and Hour Division; states and cities may set higher rates.

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Related terms

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