Section 6(a)(1) of the federal Fair Labor Standards Act requires most U.S. employers to pay their workers a minimum wage per hour. The law has been amended numerous times since it took effect in October 1938, when the minimum wage was 10 cents an hour. As of late 2012, Section 6(a)(1) mandated a minimum wage of $7.25 an hour.
Engaged in Commerce
The federal minimum wage applies to any business that's engaged in interstate commerce. The law defines "engaged" broadly enough that it covers nearly every employer in the country. It includes not only companies that actually operate across state lines or that produce goods for delivery across state lines, but also companies that simply handle or sell goods or materials that have been delivered through interstate commerce. Even if a company just sends something through the mail or makes a phone call to another state, it's engaged in interstate commerce.
Most Recent Updates
Congress can raise the minimum wage by amending Section 6(a)(1). As of 2012, the law was operating under an amendment passed in 2007. The 2007 amendment raised the minimum wage in three steps: from $5.15 to $5.85 an hour in July 2007, then to $6.55 an hour in July 2008, and finally to $7.25 an hour in July 2009.
Exemptions
Section 6 allows businesses to pay less than minimum wage to new workers under age 20. As of 2012, employers could pay such employees $4.25 an hour for the first 90 days after they were hired. After 90 days, the rate goes up to the standard minimum wage. Other provisions of the Fair Labor Standards Act exempt certain salaried professional, executive and administrative workers from the minimum wage requirement. Employees who receive tips can get a base wage less than the minimum, although their total combined tips and wages must meet the minimum.
State Minimums
The Fair Labor Standards Act allows states to set their own minimum wages. Workers are entitled to receive whichever wage -- state or federal -- is higher. As of 2012, 18 states and the District of Columbia had minimum wages higher than the federal minimum: Alaska ($7.75), Arizona ($7.65), California ($8), Colorado ($7.64), Connecticut ($8.25), D.C. ($8.25), Florida ($7.67), Illinois ($8.25), Maine ($7.50), Massachusetts ($8), Michigan ($7.40), Montana ($7.65), Nevada ($8.25), New Mexico ($7.50), Ohio ($7.70), Oregon ($8.80), Rhode Island ($7.40), Vermont ($8.46) and Washington ($9.04).