What is a minimum wage?
A minimum wage mandate is enforced by federal and state governments and determines the lowest amount of money employers can pay their workers.
What is the federal minimum wage?
Since its enactment in 1938, the federal minimum wage has risen 30x what it was over 80 years ago. The federal minimum wage now stands at $7.25 per hour. Many states have adopted wages even higher, with the state of California leading the charge.
When was the current federal minimum wage set?
Over the course of history, Congress has changed the federal minimum wage 22 times. The last time was in 2009 when Congress moved to increase the minimum wage from $6.55 to $7.25. Check out this graph to see a full history of how the federal minimum wage has changed over time.
Are there exceptions to the federal minimum wage?
Yes, there are a few exceptions. For example, employees who receive tips for their work are not required to be paid minimum wage. Additionally, some farm and seasonal workers may be exempt.
Certain states have also created exemptions. For example, in Wyoming, employees under the age of 20 can be paid a “training wage” of $4.25 per hour for the first 90 days of work. In Georgia, full-time student workers can be paid 85% of the minimum wage, or $6.16 per hour, for up to 20 hours of work per week while school is in session.
What you need to know
HR professionals and business owners must be aware of the minimum wage in every state in which they do business. As states regularly change their minimum wage rate, it’s important to regularly check-in and confirm your company is compliant with updated laws and regulations.
In 2020 alone, 24 different states have made changes to their minimum wage requirements, and we expect to see even more changes made in the coming year.
To help you in your effort to maintain compliance, here is a list of the minimum wage in every state in America.
|State||2020 Minimum Wage|
|Alabama||$7.25 (Alabama does not have a state minimum wage)|
|California||$12.00 (25 or fewer employees), $13.00 (26 or more employees)|
|Georgia||$7.25 (Georgia technically has a $5.15 state minimum wage but all employers subject to FLSA must pay the federal minimum)|
|Louisiana||$7.25 (Louisiana does not have a state minimum wage)|
|Minnesota||$10.00 (for employers with annual gross revenue exceeding $500k), $8.15 (for employers with annual gross revenue below $500k)|
|Mississippi||$7.25 (Mississippi does not have a state minimum wage)|
|Nevada||$8.00 (The $8.00 minimum wage applies to employees who qualify for health benefits. The minimum wage is $9.00 for employees who do not receive these benefits)|
|New Hampshire||$7.25 (New Hampshire does not have a state minimum wage)|
|New York||$11.80 (This is the statewide minimum mandate. There are some cities or counties that require a higher wage be paid)|
|Oregon||$11.50 (This is the statewide minimum mandate. There are some cities or counties that require a higher wage be paid)|
|South Carolina||$7.25 (South Carolina does not have a state minimum wage)|
|Tennessee||$7.25 (Tennessee does not have a state minimum wage)|
|Wyoming||$7.25 (Wyoming technically has a $5.15 state minimum wage but all employers subject to FLSA must pay the federal minimum)|
Of the 50 states (and Washington DC) listed above, 20 states stick to the federal minimum of $7.25, while the other 32 have increased the rate for their state. 16 states pay $10.00 or more.
For more tips, advice, and information on all things human resources, check out our blog! We post multiple articles each week that help HR professionals stay compliant, improve performance, and build great teams.
DISCLAIMER: Eddy is not a legal, tax, benefit, accounting, or investment advisor. This article is written solely for informational purposes. It is not meant to provide legal, regulatory, or tax advice. We recommend speaking to a legal, tax, or accounting professional before making any decisions.