What Are America's Minimum Wage Laws?


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The United States has statutory minimum wage laws intended to ensure that even the least skilled of workers are able to earn enough money on which to live. As of July 2009, the federal minimum wage was set to $7.25 per hour, which equates to weekly earnings of just $290 per week (before taxes) for a full time job. However, many feel this number has not kept up with inflation and that this number is no longer a livable figure.

As of 2012, 1.6 million people were reported earn the federal minimum wage. Surprisingly, about 2 million were reported as earning less than minimum wage, meaning a total of 3.6 million Americans earned at or below the federally mandated $7.25 per hour. While this sounds like an enormous number of people, it actually equates to just 4.7 percent of all hourly-paid workers. How can one pay less than minimum wage, you might ask? A few U.S. territories and types of labor are exempt or subject to other minimum wage standards. For example, tipped labor must only be paid a minimum of $2.13 per hour as long as the hourly wage plus reasonably expected tip equates to at least the minimum wage. Also, those under the age of 20 can be paid just $4.25 per hour for the first 90 days of their employment.

Since minimum wages are contrary to the concepts of laissez-faire economics and pure capitalism, they are often criticized and were almost immediately attacked in the courts after their initial introduction in the early 20th Century. In the case of Commerce Clause in U.S. v. Darby Lumber Co., 312 U.S. 100 (1941) the U.S. Supreme Court considered the issue of minimum wages and whether they were constitutional. The Court held that minimum wage laws were constitutional and did not violate any express or implied provision of the U.S. Constitution.

Recognizing that federal minimum wage laws may actually still set the rate of pay too low for one to live in most jurisdictions, a number of states have enacted their own minimum wage laws that increase the minimum rate of pay. Some counties and/or cities have also enacted laws that increase minimum wages even higher. Current federal laws mandate that tipped employees receive a minimum of $2.13 per hour, provided that such wages plus tips total no less than $7.25 per hour. If they come up short, the employer must pay the difference. Non-tipped employees must be paid a minimum of $7.25 per hour. Those under 20 may be paid a minimum-wage of $4.25 per hour for the first 90 calendar days of employment, but thereafter must be paid the ordinary minimum of $7.25. To find information about state or municipal minimum wage laws in your area, you can check with your local state labor and employment department, or contact your company's attorney.

A new movement has been gaining in popularity to increase the federal minimum wage, in some cases even suggesting that it be more than doubled to $15 per hour. While an increase of this amount in a single step is unlikely, it is likely that minimum wages will be adjusted up in the near future given the effects of inflation on the U.S. economy. If you are interested in more information on minimum-wage laws, or need assistance in lobbying for an increase in such laws, you should contact a local attorney experienced in labor and employment law and possibly in lobbying and political matters. For a list of attorneys in your area, please visit the Law Firms page on our site at HG.org.

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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.

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