Minimum wage is an aspect of employment law that sets the lowest hourly rate an employer can legally pay their employees.
Both federal and state governments have established minimum wage laws to protect workers from receiving unjustly low compensation.
The federal minimum wage, set by the Fair Labor Standards Act (FLSA) in 2009, is $7.25 per hour. However, states and local governments can set higher minimum wages to reflect regional cost-of-living differences.
Employers are obligated to pay the highest applicable minimum wage, whether it is federal, state, or local.
Although minimum wage laws usually define an hourly rate, employers can pay employees in other ways as long as the total compensation divided by the total hours worked meets or exceeds the minimum wage.
Are There Specific Exceptions to Minimum Wage Rates?
Minimum wage laws do not cover Independent contractors because they are not considered employees. For example, a freelance graphic designer hired by a company to design a logo and paid a flat fee for the project would not be subject to minimum wage laws since they are an independent contractor and not an employee of the company.
Examples of other workers exempt from federal minimum wage include the following:
- Outside salespersons: A sales representative who travels to different locations to sell products or services directly to customers and is paid based on commissions.
- Workers on small farms: Employees on small farms that employ a limited number of workers and do not engage in significant interstate commerce, such as a family-owned farm with a few employees.
- Seasonal amusement or recreational business employees: Workers at a summer camp or a seasonal water park that operates only for a few months during the year.
- Newspaper deliveries: A person who delivers newspapers to homes on a daily or weekly basis.
- Students and learners as defined by law: An apprentice working under the supervision of a skilled worker to learn a trade, such as a trainee electrician.
Other exemptions include the following:
- Full-time students employed by higher education institutions: A graduate student who works as a teaching assistant at their university.
- Employees with disabilities affecting their job performance: A person with a developmental disability who works at a non-profit organization through a supported employment program.
- Family members: A family-owned restaurant where the owner’s son or daughter works without receiving the minimum wage.
- Employees in training: A new employee undergoing a training program before starting their actual job, such as a trainee nurse.
- Volunteers: A person who offers their time and skills to a non-profit organization without receiving any compensation.
Employees not covered by federal law might still be protected by state or local laws. For example, a state may have its own minimum wage law covering workers not subject to federal minimum wage requirements. In this case, the worker would be entitled to the state minimum wage, which might be higher than the federal minimum wage.
Federal law allows employers to pay a lower hourly rate for employees who earn tips, known as the tipped minimum wage. For example, a restaurant server who receives a base hourly wage of $2.13 plus tips could meet the federal minimum wage requirement if their tips combined with the base wage equal at least $7.25 per hour. If the server’s tips and base wage do not meet the minimum wage, the employer is required to make up the difference.
What Else Should I Know About Wages?
Under the FLSA, employers are not obligated to pay employees for time not worked, such as holidays or personal vacations. These benefits are usually negotiated between the employee and the employer. Laws do exist, however, to regulate holiday pay for employees working on those days.
Laws regulating holiday pay for employees working on those days vary depending on the jurisdiction. In the United States, there is no federal law mandating extra pay for employees who work on holidays.
However, some states and local governments may have regulations requiring employers to pay a higher rate, such as time-and-a-half or double-time, for employees working on certain holidays. These laws differ from state to state, so it is essential for employers and employees to familiarize themselves with their local regulations.
Hazard pay, additional compensation for physically demanding or dangerous work, is not explicitly regulated by the FLSA, except for the provision that it should be included as part of an employee’s regular pay.
Examples of physically demanding or dangerous work that may warrant hazard pay include:
- Mining operations, where workers face risks of cave-ins, exposure to harmful substances, and equipment accidents.
- Firefighting, where employees are exposed to high temperatures, hazardous materials, and life-threatening situations.
- Construction work at great heights, such as on skyscrapers or bridges, where workers are at risk of falls.
- Law enforcement, where officers face the potential for violence or life-threatening situations during their duties.
- Waste management and sanitation work, where employees handle hazardous materials and deal with unsanitary conditions.
Employers who violate minimum wage laws may face penalties, fines, civil penalties, jail time, Department of Labor injunctions, back wages, liability for legal fees, and liquidated damages:
- Fines: Violators may be subject to fines ranging from $100 to $10,000, depending on the severity and frequency of the violations.
- Civil penalties: Willful or repeat offenders may face a civil penalty of $1,100 per occurrence.
- Jail time: Employers who commit egregious violations can potentially face imprisonment, usually no more than one year.
- Department of Labor injunctions: The Department of Labor may issue injunctions to stop employers from continuing their illegal practices.
- Back wages: Employers may be required to pay the affected employee the difference between what they were paid and what they should have been paid according to minimum wage laws.
- Liability for legal fees: Employers may be held responsible for the legal fees associated with their failure to pay the minimum wage.
- Liquidated damages: In some cases, employers may be required to pay liquidated damages, which are typically equal to the amount of back wages owed, effectively doubling the amount owed to the employee.
Do I Need an Attorney for Wage Discrimination?
Employers should consult with an experienced employment attorney to ensure compliance with state and federal wage regulations. An attorney can clarify which laws apply to your business and represent you in any wage dispute lawsuits.
Employees facing wage disputes can also benefit from consulting an employment attorney, who can help them understand their rights and represent them in a lawsuit to recover any owed wages.
LegalMatch is an online legal matching service that can help connect you with qualified employment attorneys who handle wage discrimination cases. By filling out a brief questionnaire on the LegalMatch website, you can be matched with several attorneys who meet your specific needs and have experience in handling wage discrimination cases.
LegalMatch provides you with detailed information about each attorney, including their education, experience, fees, and reviews from past clients. This information can help you make an informed decision about which attorney to hire.
In addition to connecting you with attorneys, LegalMatch also provides resources and information on legal topics, including wage discrimination. You can use our legal library to learn more about the laws and regulations related to wage discrimination, as well as find answers to frequently asked questions.
Use LegalMatch as your resource for facing wage discrimination and finding legal representation.
