Minimum Wage

The minimum wage page explains what minimum wage is and how it might affect you. It details who the Fair Labor Standards Act covers, as well as what wage applies for probationary periods, minors, and training. This page also explains how minimum wage laws affect commissions, tips.

This page provides answers to the following questions:

1. What is the federal minimum wage?

Minimum wage means the lowest hourly pay that workers can receive. The federal minimum wage for covered, nonexempt employees is $7.25 an hour. The federal minimum wage for contractors is $11.25 an hour.

Many states, and some cities, also have minimum wage laws. If state, city, and federal minimum wage laws apply, then the employee is entitled to whichever minimum wage is higher. For more information on minimum wage laws, visit the Department of Labor website.

On January 21, 2022, The Office of Personnel Management issued guidance on how agencies should ensure all federal workers make at least $15 per hour. Agencies have until January 30, 2022 to implement the changes.

2. Which federal law(s) cover payment of a minimum wage?

The Fair Labor Standards Act (FLSA) contains the federal minimum wage provisions. Under the FLSA, a covered employer is one whose activites are performed through unified operation or common control by any person or persons for a common business purpose and —

whose annual gross volume of sales made or business done is not less than $500,000 (exclusive of excise taxes at the retail level that are separately stated); or
is engaged in the operation of a hospital, an institution primarily engaged in the care of the sick, the aged, or the mentally ill who reside on the premises; a school for mentally or physically disabled or gifted children; a preschool, an elementary or secondary school, or an institution of higher education (whether operated for profit or not for profit); or
is an activity of a public agency.

3. Who is covered by the federal minimum wage law?

There are several ways an employee can be covered under the Fair Labor Standards Act: “enterprise coverage” and “individual coverage.” Either standard is sufficient for you to be entitled to receive the minimum wage.

Enterprise coverage: Employees who work for certain businesses or organizations (“enterprises”) are covered by the FLSA. An enterprise much have at least two employees and:

do at least $500,000 a year in business; or
Be a hospital, business providing medical or nursing care for residents, schools, preschools, or government agency

Individual coverage: Even when there is no enterprise coverage, employees are protected by the FLSA if their work regularly involves them in commerce between states (“interstate commerce”). In its own words, the law covers individual workers who are “engaged in commerce or the production of goods for commerce.”

Examples of employees who are involved in interstate commerce include those who:

produce goods that will be sent out of state (such as a worker assembling components in a factory or a secretary typing letters in an office)
regularly make telephone calls to persons located in other States
handle records of interstate transactions
travel to other States on their jobs
do janitorial work in buildings where goods are produced for shipment outside the State.

Domestic service workers (such as housekeepers, full-time babysitters, chauffeurs, and cooks) are normally covered by the law, as long as:

they receive at least $2,200 in 2020 from one employer in a calendar year (this calendar year wage threshold is set by the Social Security Administration each year,
they work a total of more than 8 hours a week for one or more employers.

There are certain types of employees not covered by the minimum wage laws:

Executive, administrative, and professional employees (including teachers and academic administrative personnel in elementary and secondary schools), outside sales employees, and certain skilled computer professionals (as defined in the Department of Labor’s regulations)
Employees of certain seasonal amusement or recreational establishments
Employees of certain small newspapers and switchboard operators of small telephone companies
Seamen employed on foreign vessels
Employees engaged in fishing operations
Employees engaged in newspaper delivery
Farm workers employed on small farms (i.e., those that used less than 500 “man days” of farm labor in any calendar quarter of the preceding calendar year)
Casual babysitters
Persons employed solely by the individual receiving services (not an agency, non-profit, or other third party employer) primarily providing fellowship and protection (companionship services) to seniors and/or individuals with injuries, illnesses, or disabilities.

See the Department of Labor website for more information.

4. Which employers does the law cover?

Employers whose enterprises are covered by the FLSA, or who have employees engaged in interstate commerce are required by the FLSA to pay the minimum wage. Unlike other laws relating to employment, the standard does not depend on how many employees the employer has. The determining factor is the nature of the work performed by the enterprise and the employee. Coverage depends on whether the employee or employer is engaged in interstate commerce. For more information, please see the previous question.

5. If my state or city's minimum wage is higher than the federal minimum wage, what is my employer required to pay me?

Where an employee is subject to both the state and federal minimum wage laws, or federal, state, and city minimum wage laws, the employee is entitled to higher of the minimum wages. If you are not covered by the federal minimum wage laws, that does not mean that you are also exempt from your state minimum wage requirements. For more information on your state’s minimum wage laws, see the DOL state minimum wage laws.

6. What is my state's minimum wage?

If you have questions about your state’s minimum wage, see the Department of Labor State Minimum Wage page.

7. Can my employer pay me less for certain hours or average my pay?

While your employer may pay you different rates for different kinds of work, the pay rates cannot be averaged to meet your employer’s minimum wage obligations. Hourly employees must be paid minimum wage for all hours worked. For example, your employer could not pay you $6.50 for certain hours worked, even if for the rest of the hours worked, you were paid $8.00 per hour, making your average rate of pay higher than $7.25 per hour. See the Department of Labor website for more information on state minimum wage laws.

8. I am paid a salary. Does the minimum wage law apply to me?

Yes (if you would otherwise be covered by the Fair Labor Standards Actt or equivalent state laws discussed above), which means that your average hourly earnings for the week must equal $7.25 or higher. This can be determined by dividing your salary by the number of hours that you work. An employer cannot create a salary rate that is so low that when you divide your weekly pay by the number of hours worked the resulting hourly pay is less than the minimum wage.

9. I am paid a commission. Does the minimum wage law apply to me?

Yes (if you would otherwise be covered by the Fair Labor Standards Act or equivalent state laws discussed above), which means that your average hourly earnings for the week must equal $7.25 or higher. Commissions are payments for hours worked and must be included in the regular rate. An employer cannot create a commission standard that is so low that when you divide your weekly pay by the number of hours worked the resulting hourly pay is less than the minimum wage. If your pay including commission is below the minimum wage, then your employer is required to make up the difference.

10. I am paid a piece rate for the amount of goods I produce. Does the minimum wage law apply to me?

Yes (if you would otherwise be covered by the Fair Labor Standards Act (or equivalent state laws discussed above), which means that your average hourly piece rate earnings for the week must equal $7.25 or higher. The regular hourly rate of pay for employees paid on a piece-rate basis is computed by adding together total earnings for the workweek from piece rates and all other sources and any sums paid for waiting time or other hours worked. An employer cannot create a piece rate standard that is so low that when you divide your weekly pay by the number of hours worked the resulting hourly pay is less than minimum wage. If your piece rate total is below the minimum wage, then your employer must make up the difference.

11. I am paid tips. Does the minimum wage law apply to me?

If part of your pay comes from tips, then your employer can pay you significantly less than the minimum wage. This is called taking a tip credit. It is allowed as long as your hourly wage plus the average amount that you make from tips is equal to the minimum wage.

An employer of a tipped employee is only required to pay $2.13 an hour in direct wages, as long as all three of the following conditions are met:

if $2.13 plus the tips you receive equals at least the federal minimum wage of $7.25 per hour,
you retain all tips, and
you customarily and regularly receive more than $30 per month in tips.

If your tips combined with at least $2.13 an hour in wages do not equal the federal minimum hourly wage, your employer must make up the difference. For example, if during a slow period, your tips average only $2 per hour you work, your employer must pay you an additional $3.12 per hour to make up the difference ($2/hour in tips, 2.13 in regular wage, plus the additional $3.12 in wages, so that you receive the $7.25 minimum wage).

Some states and cities have minimum wage laws specific to tipped employees. When an employee is subject to both the federal and state wage laws, or federal, state, and city wage laws, the employee is entitled to the provisions of each law which provide the greater benefits.

12. I was just hired, and my employer says I will receive a lower training wage until I pass probation in 90 days. Is this legal?

Possibly, but only if you are under 20 years of age. A minimum wage of $4.25 per hour applies to young 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 after the employee reaches 20 years of age, whichever comes first, the employee must receive a minimum wage of $7.25 per hour. If you are over 20 years of age and are required to attend a training program for work, you must be paid for that time.

13. I am 16 years old and a full-time high school student. Does the minimum wage law apply to me?

A minimum wage of $4.25 per hour applies to young 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 $7.25 per hour.

There is also a special Student Learner Program for high school students at least 16 years old who are enrolled in vocational education (shop courses). It allows your employer to get a certificate from the Department of Labor authorizing an employer to pay you 75% of the minimum wage (currently $5.44) while you are enrolled in the vocational education program.

If neither of these special circumstances applies to you, then you are subject to the FLSA and employers must pay you the minimum wage.

For more information on the Student-Learner Program and whether your employer is a participant, contact the: Department of Labor Wage and Hour Division 230 South Dearborn, Room 514, Chicago, Illinois, 60604; Telephone: (312)596-7195.

14. I am 19 years old and a full-time college student. Does the minimum wage law apply to me?

If you are a full-time student working in retail or service stores, agriculture, or colleges and universities, your employer may participate in the Full-Time Student Program. This program allows the employer to get a certificate from the Department of Labor which allows employers to pay you 85% of the minimum wage (currently $6.16 per hour). The certificate also limits the hours that you 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. It requires the employer to follow all child labor laws. Once students graduate or leave school for good, they must be paid $7.25 per hour.

However, not all employers who hire students participate in this program or have the necessary certificate. If you are being paid less than minimum wage, you should find out whether your employer is a formal participant in the program and in compliance with its provisions.

For more information on the Full-Time Student Program and whether your employer is a participant, contact the:

Department of Labor Wage and Hour Division 230 South Dearborn, Room 514, Chicago, Illinois, 60604; Telephone: (312) 596-7195.

15. My employer provides housing for me as part of my job benefits. Can the value of the housing be deducted from my wages?

Yes, if the value deducted is a reasonable estimate of the actual cost. Under the FLSA, the pay you receive must be in the form of cash or something that can be readily converted into cash or other legal forms of compensation, such as food and lodging. This means that an employer may include the reasonable cost of furnishing board, lodging, or other facilities. This rule applies when the employer pays for the benefit, and if the employer customarily furnishes such board, lodging, or other facilities. Not only must the employee receive the benefits of the facility for which he is charged, but it is essential that his acceptance of the facility be voluntary and uncoerced. Whether a value is reasonable is determined by the Secretary of Labor. For example, you are provided with lodging worth an estimated $250 per month, based on other rents in the area. Your employer can count that $250 towards your rate of pay, but could not deduct $500 if that rate was not the reasonable value of the lodging provided.

16. Is my employer required to pay me for meal and break time?

The FLSA does not require that your employer give you meal breaks or rest breaks from your work, although some state laws require rest and meal breaks. Whether or not you must be paid for breaks depends on state law, the length of your break, and what you do with your break time. Also, some state laws have different rules for meal and break time for younger workers.

If your employer does give you a rest period of short duration, usually 20 minutes or less, this must be counted as hours worked. If you take a longer break than the amount of time that was authorized, your employer is not required to count this as hours worked. To not pay you for unauthorized break time your employer must have expressly and unambiguously told you:

that the authorized break may only last for a specific length of time
that any extension of the break is contrary to the employer’s rules and
that any extension of the break will be punished

Bona fide meal periods (typically 30 minutes or more) do not need to be paid, or counted as work time, as long as you are completely relieved from duty for the purpose of eating regular meals. You are not considered relieved from duty if you are required to perform any work duties, whether active or inactive while eating.

17. Is my employer required to pay me for travel time?

It depends on the type of travel involved.The Portal-to-Portal Act (an amendment to the FLSA) clarifies the treatment of travel time for the purpose of wage payments.

Home to Work Travel: Ordinary home to work travel, traveling from home before the regular workday and returning home at the end of the workday is not counted as work time. You are not entitled to pay for this type of travel.
Home to Work on a Special One Day Assignment in Another City: This applies when you regularly work in one place and are given a one-day assignment in another city, but return home the same day. The time you spend traveling to and from the other city is work time that you should be paid for. Your employer may deduct that time you normally spend commuting to the regular work site. For example, you normally spend 30 minutes commuting each way to work. You are given a one-day assignment to work in a city two hours away and work seven hours. Your employer should pay you for 10 hours, the seven hours worked and the additional three hours (one and a half hours each way) commuting time.
Travel That is All in the Day’s Work: The time you spend on travel as part of your regular work, such as travel from job site to job site during the workday, is work time and must be counted as hours worked.
Travel Away from Home Community: Travel that keeps you away from home overnight is travel away from home. Travel away from home is work time when it is during the employee’s regular workday and regular work hours. Travel time is also work time during regular work hours on nonworking days. However, the Department of Labor will not enforce payment for travel away from home outside of regular working hours that you spend as a passenger on an airplane, train, boat, bus, or automobile.

Generally, under the Portal-to-Portal Act, no employer shall be liable for the failure to pay the minimum wage for time spent traveling to and from the actual place of performance of the principal activity or activities which employees are employed to perform. The Department of Labor has released a letter clarifying this subject that provides several scenarios which may be helpful.

18. Is my employer required to pay me for the time I spend attending a seminar away from the office?

Yes, unless four specific criteria are met. Attendance at lectures, meetings, training programs and similar activities need not be counted as working time if:

it is outside normal hours
it is voluntary
not job related
and no other work is performed at the same time

If you have to travel to take a training program or seminar offsite, your travel time must be paid as well.

19. Who enforces the law?

The FLSA is enforced by the Wage-Hour Division of the U.S. Department of Labor. The Wage-Hour Division (WHD) uses investigators stationed across the U.S., who conduct investigations and gather data on wages, hours, and other employment conditions or practices, to determine whether an employer is following the law. The Wage and Hour Division can compel the attendance of witnesses at hearings and may also require an employer to make records available to the Wage-Hour Administrator. If they find violations, they may recommend changes in employment practices to bring an employer into compliance.

It is a violation to fire or in any other manner discriminate against an employee for filing a complaint or for participating in a legal proceeding under Fair Labor Standards Act.

Willful violations may be prosecuted criminally and the violator fined up to $10,000. A second conviction may result in imprisonment. Employers who willfully or repeatedly violate the minimum wage requirements are subject to a penalty of up to $1,000 for each violation.

The Fair Labor Standards Act makes it illegal to ship goods in interstate commerce which were produced in violation of the minimum wage, overtime pay, child labor, or special minimum wage provisions.

See the the Wage-Hour Division for information on how to contact them for assistance. You may also contact your local WHD office.

If you need information about your state’s minimum wage law or wish to report a potential state minimum wage violation, you can contact the agency in your state that handles wage and hour/labor standards violations, see the the Department of Labor for contact information. government agencies page.

20. What are the remedies available to me?

There are several methods for an employee to recover unpaid minimum or overtime wages; each method has different remedies.

Wage-Hour may supervise the payment of back wages.
The Secretary of Labor may bring suit for back wages and an additional penalty, called “liquidated damages,” which can be equal to the back-pay award (essentially doubling the damages) if an employer willfully violated the statute.
An employee may file a private lawsuit for back pay and an equal amount as liquidated damages, plus attorney’s fees and court costs. An employee may not bring a lawsuit if he or she has been paid back wages under the supervision of Wage-Hour or if the Secretary of Labor has already filed suit to recover the wages.
The Secretary of Labor may get an injunction to restrain any person from violating the FLSA, including the unlawful withholding of proper minimum wage and overtime pay.

Your state minimum wage law may have different methods for recovery of unpaid wages, and different remedies to be awarded to those who succeed in proving a violation. For further information, please contact your state agency that handles wage and hour/labor standards violations, listed on our site’s state government agencies page.

21. How can I file a complaint / how long do I have to file?

The Department of Labor (DOL), Wage and Hour Division (WHD), is responsible for enforcing Federal minimum wage, overtime pay, recordkeeping, and child labor requirements of the FLSA.

If you would like to file a complaint for unpaid wages, the WHD is the division of the DOL that would administer and enforce wage protection laws and may pursue the complaint on your behalf. You may also file your own lawsuit (which may require you to hire an attorney).

To file a complaint, you must obtain and provide WHD requested information. Do not delay in contacting the Wage and Hour Division or your state agency to file a claim. There are strict time limits in which charges of unpaid wages must be filed. To preserve your claim under federal law, you must file a lawsuit in court within 2 years of the violation for which you are claiming back wages, except in the case of an employer’s willful violation, in which case a 3-year statute applies. However, as you might have other legal claims with shorter deadlines, do not wait to file your claim until your time limit is close to expiring. You may wish to consult with an attorney prior to filing your claim, if possible. If you are unable to find an attorney who will assist you, it is not necessary to have an attorney to file your claim with the state and federal administrative agencies.

Your state minimum wage law may have different deadlines for recovery of unpaid wages. See the Department of Labor website for information on state minimum wage laws.

22. What do I need to file a complaint?

You will need your name, address and telephone number so that you may be contacted. You will also need to provide the name of the company that you are filing the complaint against. The location of the company as well as their contact information are also required. You will be expected to additionally provide the manager’s or owner’s names, the type of work that you did, and the method and frequency of payment that you received. Copies of pay stubs, person record of hours and other information related to your employment are helpful.

In proceeding with your case, you will be directed to your nearest WHD office to file the complaint. See the Department of Labor website for state office contact information.

23. Can my boss fire me for filing a claim?

No. Your employer may not terminate you for filing a claim. They also may not punish you in any other manner or discriminate against you for filing a claim. The FLSA explicitly prohibits employers from firing or discriminating against an employee because the employee has filed any complaint under or related to the FLSA. See our page on Retaliation for more information.

24. More Information About the Minimum Wage

U.S. Department of Labor Wage Page: The Department of Labor is the federal agency which administers a variety of Federal labor laws including those that guarantee workers’ rights to a minimum hourly wage and overtime pay.

U.S. Department of Labor Employment Law Guide : The Employment Law Guide is offered by the Department of Labor as a public resource. They have a page dedicated to explaining minimum wage and overtime pay.

Resources: State Laws Government Agencies

25. Who is covered by the federal minimum wage law?

The Fair Labor Standards Act (FSLA) covers more than eighty million American workers. There are two ways an employee can be covered: “enterprise coverage” and “individual coverage.” Either standard is sufficient for you to be entitled to receive the minimum wage.