Minimum Wages

Minimum wages were established to protect the livelihood of society's lowest-paid workers by ensuring that they are not exploited by their employers. The first minimum wage law was passed in 1938 as part of the Fair Labor Standards Act. At the time, the lowest legal wages were $0.25 per hour.

As the cost of living has risen, minimum wages have increased accordingly. To keep pace with inflation, the current Federal minimum wage was increased to $7.25 per hour on July 24, 2009, although several states have higher minimum wage standards (see chart below).

Minimum Wage Exemptions
There are two exceptions to the standard minimum wage rate: young employees and employees who earn tips.

• Workers who are under 20 years old are subject to minimum wages of $4.25 per hour for their first 90 consecutive days of employment.
• Employees who earn tips (such as wait staff and bartenders) must be paid a minimum of $2.13 per hour under Federal law. If their wages plus tips do not total the Federal minimum wage of $7.25, the employer is required to make up the difference.

State Minimum Wages
Many states adhere to the standard Federal minimum wage, while others choose to implement their own higher minimum wage rates. Certain municipalities also have their own minimum wages. Any employee who is subject to both municipal and state minimum wage rates must be paid the higher of the two.

On July 24, 2009, the federal and many of the state minimum wage standards are set to increase. Federal minimum wage will rise to $7.25, while each individual state's minimum wage rates will rise (or stay constant) as listed below:

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