Minimum Wage


The Fair Labor Standards Act (FLSA) , which prescribes standards for the basic minimum wage and overtime pay, affects most private and public employment. It requires employers to pay covered employees who are not otherwise exempt at least the federal minimum wage and overtime pay of one-and-one-half-times the regular rate of pay. For nonagricultural operations, it restricts the hours that children under age 16 can work and forbids the employment of children under age 18 in certain jobs deemed too dangerous. For agricultural operations, it prohibits the employment of children under age 16 during school hours and in certain jobs deemed too dangerous. The Act is administered by the Employment Standards Administration’s Wage and Hour Division within the U.S. Department of Labor.

The federal government has established a minimum wage, or the least dollar amount that may be paid hourly workers, that applies to all workers in all fifty states who are engaged in interstate commerce or the production of goods for interstate commerce (and closely allied enterprises) or are employed by an enterprise engaged in interstate commerce or the production of goods for commerce. Businesses engaged in “interstate commerce” are defined as those with potential to come in contact with interstate travelers or consumers in other states.

Thus the federal minimum wage does not apply to all occupations. Domestic workers are not covered in many situations; fishermen, employees of certain small newspapers, babysitters, and agricultural seasonal workers in small family farms are some of the common exemptions from the federal minimum wage law. Others who are exempt include those in seasonal employment, such as at amusement parks or seasonal recreation centers, and in “exempt” occupations, such as managers, salesmen, or administrators who are not paid on an hourly basis. Further, if a local business does not qualify as participating in interstate commerce, it, too, would be exempt. These exempt occupations are covered by state minimum wage laws that can be higher or lower than the federal minimum wage which is $7.25 per hour, as of July 24, 2009. With this change, employees who are covered by the federal Fair Labor Standards Act (FLSA) will be entitled to pay of no less than $7.25 per hour.

This increase is the last of three provided by the enactment of the Fair Minimum Wage Act of 2007, which amended the FLSA to increase the federal minimum wage in three steps: to $5.85 per hour effective July 24, 2007; to $6.55 per hour effective July 24, 2008; and now to $7.25 per hour effective July 24, 2009. The latest change will directly benefit workers in 30 states (Alabama, Alaska, Arkansas, Delaware, Florida, Georgia, Idaho, Indiana, Kansas, Louisiana, Maryland, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Jersey, New York, North Carolina, North Dakota, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Wisconsin and Wyoming) where the state minimum wage is currently at or below the federal minimum wage, or there is no state minimum wage. It will also benefit workers in the District of Columbia, where the minimum wage is required to be $1 more than the federal minimum wage.

Subminimum wages are hourly rates below the established minimum wage that may be paid for a limited time to learners, apprentices, messengers, student workers, and those employed in occupations not ordinarily given to full-time workers. The subminimum wage permits businesses to be able to continue to hire certain types of workers in certain nontraditional, “convenience” occupations.

Every employer of workers subject to the FLSA’s minimum wage provisions must post, and keep posted in each of its establishments, a notice explaining this act. The notice must be posted in conspicuous places to permit employees to readily read them. Posters and other compliance assistance materials concerning the minimum wage increase are available free of charge from the Labor Department’s Wage and Hour Division and may also be obtained from the agency’s Web site at Minimum Wage Laws in the States – July 24, 2009.

Many states have minimum wage laws with provisions that differ from the federal law. When an employer is subject to both, the employer must pay the higher of the two rates.

OVERTIME PAY:

At least 1/1/2 times the regular rate of pay for all hours worked over 40 in a workweek.

CHILD LABOR:

An employee must be at least 16 years old to work in most non-farm jobs and at least 18 to work in non-farm jobs declared hazardous by the Secretary of Labor.

Youths 14 and 15 years old may work outside of school hours in various non-manufacturing, non-mining, non-hazardous jobs under the following conditions: No more than 3 hours on a school day or 18 hours in a school week; 8 hours on a non-school day or 40 hours in a non-school week.

Also work may not begin before 7 a.m. or end after 7 p.m, except from June 1 through Labor Day, when evening hours are extended to 9 p.m. Different rules apply in agricultural employment.

TIP CREDIT:

Employers of “tipped employees” must pay a cash wage of at least $2.13 per hour if they claim a tip credit against their minimum wage obligation. If an employee’s tips combined with the employer’s cash wage of at least $2.13 per hour do not equal the minimum hourly wage, the employer must make up the difference. Certain other conditions must also be met.

ENFORCEMENT:

The Department of Labor may recover back wages either administratively or through court action, for the employees that have been underpaid in violation of the law. Violations may result in criminal action.

Employers may be assessed civil money penalties of up to $1,100 for each willfull or repeated violation of the minimum wage or overtime pay provisions of the law and up to $11,000 for each employee who is the subject of a violation of the Act’s child labor provisions. In addition, a civil money penalty of up to $50,000 may be assessed for each child labor violation that causes the death or serious injury of any minor employee, and such assessments may be doubled, up to $100,000, when the violations are determined to be willful or repeated. The law also prohibits discriminating against discharging workers who file a complaint or participate in any proceeding under the Act.

ADDITIONAL INFORMATION:

Certain occupations and establishments are exempt from the minimum wage and/or overtime pay provisions.

Special provisions apply to workers in American Samoa and the Commonwealth of Northern Mariana Islands.

Some state laws provide greater employee protections; employers must comply with both.

The law requires public display of WHD Publication 1088.

Employees under 20 years of age may be paid $4.25 per hour during their first 90 consecutive calendar days of employment with an employer.

Certain full-time students, student learners, apprentices, and workers with disabilities may be paid less than the minimum wage under special certificates issued by the Department of Labor.

FURTHER INFORMATION:

Employers and employees seeking more compliance information on the increased minimum wage may call the Wage and Hour Division’s toll-free helpline at 866-4US-WAGE (487-9243).

To learn the current minimum-wage law in each of the states, please see the following Department of Labor link: Minimum Wage Laws in the States – July 24, 2009.