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Minimum Wages

The federal minimum wage for covered/non-exempt employees is $5.15 an hour. The federal minimum wage provisions are contained in the Fair Labor Standards Act (FLSA). Many states also have minimum wage laws. When the federal and the state minimum wage laws conflict, employers must apply whichever standard is most beneficial to an employee. (If you are being paid less than the FSLA or your state law requires, protest with the help of the Letter available on this site.)

The law applies to:

  • Employees of those enterprises that do at least $500,000 a year of business.
  • Employees of smaller firms, if the employee is engaged in interstate commerce.
  • Employees of hospitals, local government agencies, and schools, and also domestic workers.
  • Employees engaged in the production of goods for commerce, and those working in transportation
  • Employees regularly using phone calls or mails for interstate communication.

The federal minimum wage law applies to enterprises covered by the FLSA and employees engaged in interstate commerce. The FLSA assesses the nature of the work performed by the employee and the enterprise, to determine whether the law is applicable or not.

Who enforces the minimum wage?

The wage and hour division of the U.S Department of Labor has the responsibility of enforcing the minimum wage.

Does the law apply to employees who are paid a salary?

Yes, it applies to salaried employees. It implies that the average hourly earning for a week must be equal to $5.15, or higher. The employer has to pay a salary at least equal to the minimum wage stated in the federal or state law (whichever is higher) to the employee.

For example: The employer cannot pay an employee a salary of $180/week for 40 hours of work; as per the minimum wage law, it must be at least $206 (40 x $5.15), or perhaps more, depending upon the state law.

It applies to all those employees who otherwise might have been covered by the FLSA or state laws.

Minimum wage for workers who receive tips

The employer of a waiter, waitress, etc., is only required to pay $2.13 an hour in direct wages, and it is assumed that the employee will receive at least $3.02 an hour, on average, in tips.

Conditions for the above

  • If the tipped amount + $2.13 equals (or exceeds) the federal minimum wage of $5.15 per hour.
  • If the employee retains all tips.
  • If the employee regularly receives and retains more than $30 per month in tips.
  • If the employee's tip + $2.13 do not equal the mandatory $5.15 per hour, the employer needs to make up the difference.

Minimum wage for young workers below the age of 20

A minimum wage of $4.25 per hour applies to workers under the age of 20 during their first 90 consecutive calendar days of employment with an employer, as long as their work does not displace other workers. After 90 consecutive days of employment or when the employee reaches 20 years of age, whichever comes first, the employee must receive a minimum wage of $5.15 per hour.

There is a special program for vocational education students (16 years of age or older). It allows their employer to obtain a certificate from the Department of Labor, so that these students are paid not less than 75% of the minimum wage: $3.86 an hour.

Full-time students

The Full-time Student Program is for full-time students employed in retail or service stores, agriculture, or colleges and universities. The employer that hires students can obtain a certificate from the Department of Labor which allows the student to be paid not less than 85% of the minimum wage. The certificate also limits the hours that the student may work to 8 hours in a day and no more than 20 hours a week when school is in session and 40 hours when school is out, and requires the employer to follow all child labor laws. Once students graduate or leave school for good, they must be paid $5.15 per hour.

Not all employees, who hire students, participate in this program or have the necessary certificate.

Commission- paid worker

Minimum laws also apply to employees who are paid commissions —all those employees who otherwise might have been covered by the FLSA or state laws. The average hourly earning for a week must be equal to $5.15 or higher. If the commission plus any hourly pay total less than minimum pay, then the employer is required to pay the difference.

Employers cannot make a low commission the norm. They have to pay at least the minimum wage when the employee's weekly pay is averaged by the number of hours worked.

Worker with disability

The FLSA authorizes employers, after receiving a certificate from the Wage and Hour Division, to pay special minimum wages - wages less than the federal minimum wage - to workers who have disabilities for the work being performed. The certificate also allows the payment of wages that are less than the prevailing wage to workers who have disabilities for the work being performed on contracts subject to the McNamara-O'Hara Service Contract Act (SCA) and the Walsh-Healey Public Contracts Act (PCA).

A worker who has disabilities for the job being performed is one whose earning or productive capacity is impaired by a physical or mental disability, including those relating to age or injury.

Disabilities which may affect productive capacity include blindness, mental illness, mental retardation, cerebral palsy, and alcoholism or drug addiction. The following, taken by themselves, are not considered to be disabilities for purposes of paying special minimum wages: education disabilities, chronic unemployment, receipt of welfare benefits, nonattendance at school, juvenile delinquency, and correctional parole or probation.

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