1. What is the minimum wage?
The federal minimum wage provisions for covered, nonexempt employees are contained in the Fair Labor Standards Act (FLSA). The Fair Minimum Wage Act of 2007 included phased increases to the federal minimum wage.
* For work performed prior to July 24, 2007, the federal minimum wage is $5.15 per hour.
* For work performed from July 24, 2007 to July 23, 2008, the federal minimum wage is $5.85 per hour.
* For work performed from July 24, 2008 to July 23, 2009, the federal minimum wage is $6.55 per hour.
* For work performed on or after July 24, 2009, the federal minimum wage is $7.25 per hour.
Many states also have minimum wage laws. Where an employee is subject to both the state and federal minimum wage laws, the employee is entitled to the higher of the two minimum wages.
Various minimum wage exceptions apply under specific circumstances to workers with disabilities, full-time students, youth under age 20 in their first 90 consecutive calendar days of employment, tipped employees and student-learners.
2. What is the minimum wage for workers who receive tips?
The Fair Labor Standards Act (FLSA) requires payment of at least the federal minimum wage to covered, nonexempt employees. An employer of a tipped employee is only required to pay $2.13 an hour in direct wages if that amount plus the tips received equals at least the federal minimum wage, the employee retains all tips and the employee customarily and regularly receives more than $30 a month in tips. If an employee’s tips combined with the employer’s direct wages of at least $2.13 an hour do not equal the federal minimum hourly wage, the employer must make up the difference.
Some states have minimum wage laws specific to tipped employees. When an employee is subject to both the federal and state wage laws, the employee is entitled to the provisions which provides the greater benefits. (more…)