What is the Federal Minimum Wage?

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Gone are the days when an employer in the United States could pay people desperate for work a dollar or two a day. The federal government has enacted laws setting a floor for hourly wages that cannot be legally violated. While not every worker is covered by the federal minimum wage laws, most workers are. Today, the federal minimum wage is $7.25 an hour, less than some state laws setting minimum wages for their residents.

TL;DR (Too Long; Didn't Read)

The current federal minimum wage is $7.25 per hour.

Why is There a Federal Minimum Wage?

The federal minimum wage is the lowest hourly wage that employers are legally allowed to pay workers under federal law. That minimum wage is currently $7.25, most recently adjusted in 2009. You may not think that $7.25 per hour is a very generous wage, but consider that when the Fair Labor Standards Act of 1938 was passed, the initial wage set was $0.25 per hour. The adjustment in 2007 was the 22nd time the wage has increased since them.

In 1938, the wage protections of the Fair Labor Standards Act applied only to about 20 percent of the labor force. Coverage has been slowly expanded over the decades. Currently the federal minimum wage law covers approximately 84 percent of the labor force.

What is the Current Federal Minimum Wage?

At this time, the minimum wage is set at $7.25 an hour. This law applies to approximately 130 million workers in the country.

The law covers workers in two categories. The first category of coverage is at the enterprise level. An enterprise is subject to minimum wage requirements if it has more than $500,000 in annual sales or business. The second category of coverage is on the individual level. Employees of a company may be covered, regardless of the annual sales of the enterprise, if they help produce goods for interstate commerce.

The interstate commerce requirement is less complex than it sounds. Employees have been held to take part in interstate commerce if they work on products shipped out of state, if they commute to work from another state and if they communicate with persons in another state. They are even found to qualify if they provide services to buildings in which goods are made for shipment outside of the state.

When Do State Minimum Wages Apply?

Each state is free to set its own minimum wage for its residents ,and most do. The current state minimum wages range from a high of $12.50 in the District of Columbia (followed by $11.50 in Washington) to a low of $5.15 in Wyoming and Georgia. Several states are set to raise their minimum wages in the near future, including California, Maine and D.C. where the minimum wage will rise to $15 in 2020.

If a state minimum wage is higher than the federal minimum wage, the state wage applies to workers within the state. If the state has not enacted a minimum wage or if the federal minimum wage is higher than the state wage, the federal wage applies. The state minimum wage is lower than the federal wage in only a few states.

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About the Author

Teo Spengler earned a J.D. from U.C. Berkeley's Boalt Hall. As an Assistant Attorney General in Juneau, she practiced before the Alaska Supreme Court and the U.S. Supreme Court before opening a plaintiff's personal injury practice in San Francisco. She holds both an M.A. and an M.F.A in creative writing and enjoys writing legal blogs and articles. Her work has appeared in numerous online publications including USA Today, Legal Zoom, eHow Business, Livestrong, SF Gate, Go Banking Rates, Arizona Central, Houston Chronicle, Navy Federal Credit Union, Pearson, Quicken.com, TurboTax.com, and numerous attorney websites. Spengler splits her time between the French Basque Country and Northern California.