The compensation for the work that you do becomes a major factor in the choices you make—where you work, where you live, and when you retire. The federal and state governments recognize the importance of wages and have laws designed to protect your rights to receive fair pay for your work.
Current Minimum Wage Law:
The federal minimum wage is established by and regulated under the Fair Labor Standards Act of 1938.
As of July 24, 2009, the current federal minimum wage is set at $7.25 per hour. However, your age, type of employment, and location can change the legal minimum hourly wage your employer is required to pay.
Anytime the state minimum wage rates differ with the federal rate, the higher wage rate always applies.
Exception to the Minimum Wage Law:
Youth Minimum Wage
- If you are under 20 years of age, you may be paid as little as $4.25 per hour during your first 90 consecutive calendar days of employment.
- This lower wage rate is sometimes called a “training wage” or “youth minimum wage.”
- An employer may not terminate or “fire” one worker who is paid more in order to pay another worker the lower wage.
Workers who earn tips:
- Employers who allow workers to keep tips must pay a cash minimum wage of at least $2.13 per hour IF they claim a “tip credit” against their federal minimum wage obligation of $5.85 per hour.
- Under federal law, an employee who regularly receives tips as a part of his or her pay also gets a minimum wage of $2.13 per hour.
- In order to have this exemption apply, the employee must regularly receive more than $30 per month in tips, and be allowed to keep all tips earned.
- However, if your tips plus cash wages do not equal at least $5.85 per hour, your employer must make up the difference.
Other Cases:
- Many laws mandate that certain types of employees (executive, administrative, professional, and outside sales employees) are exempt from minimum wage requirements, provided they meet certain tests regarding job duties and responsibilities and are compensated “on a salary basis.”
- Full-time college students, workers on some farms, workers employed in fishing enterprises, and other types of employees may be paid less than the minimum wage.
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