Minimum Wage Law | Federal, State, and Local Minimum Wage Rates
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A Detailed Overview of Federal, State, and Local Minimum Wage Law

True or false: As an employer, you can pay employees any amount you want. False. It’s 100% false. Why? Because of minimum wage law.

But, what’s minimum wage? Depending on your business location, you might have differing federal, state, and local minimum wage rates. To ensure your business is compliant with labor laws, get to know minimum wage.

What is minimum wage?

The minimum wage is the lowest amount you can pay an employee per hour of work. You can pay more than the minimum wage if you’d like to, but you cannot pay less than the minimum wage.

Who sets the minimum wage?

The federal government sets a standard minimum wage that applies to all employees in the United States. However, states and localities can set their own minimum wage rates, too.

So, which rate do you need to follow? Federal, state, or local?

Federal minimum wage vs. state vs. local

What happens if a state’s minimum wage is lower than the federal minimum wage? What about if the local minimum wage is lower than the federal?

If the state or local minimum wage is lower than the federal minimum wage, you must pay your employees at least the federal minimum wage rate.

What about if the state or local minimum wage is higher? If the state or local minimum wage is higher than the federal rate, pay your employees the state or local rate, whichever is higher.

Pro tip: When it comes to choosing between federal, state, and local minimum wage law, always pay your employees the highest rate.

Federal minimum wage

The federal minimum wage is regulated by the Fair Labor Standards Act (FLSA) and enforced by the U.S. Department of Labor.

Although the federal minimum wage rate is subject to change, it has not increased since 2009.

So, what is the federal minimum wage? The current federal minimum wage is $7.25 per hour. However, the federal minimum wage could potentially increase in upcoming years under the Biden Administration. Stay tuned for more information.

Minimum wage by state

Each state can set its own minimum wage. If a state’s minimum wage is greater than the federal minimum, pay employees at least the state’s minimum wage.

For example, the minimum rate in Ohio is $8.80 per hour. If you have employees in Ohio, you must pay them at least the state’s minimum since it is greater than the federal minimum wage of $7.25.

A number of states have passed legislation to increase the state’s minimum wage to $15.00 by a certain year. For example, Connecticut’s Public Act No. 19-4 requires the state’s minimum wage to increase annually over a five-year period. Because Connecticut follows this minimum wage increase schedule, the state is on track to reach a minimum wage of $15.00 by 2023.

You might be wondering how much minimum wage is in your state. Check out our state-by-state minimum wage rate chart below to find out. Keep in mind that the states with $7.25 follow the federal minimum wage base.

[State minimum wages as of 3/1/2021]

StateState Minimum Wage
Alabama$7.25
Alaska$10.34
Arizona$12.15
Arkansas$11.00
California$13.00 (employers with 25 or fewer employees)

$14.00 (employers with more than 25 employees)
Colorado$12.32
Connecticut$12.00 ($13.00 effective August 1, 2021)
D.C.$15.00
Delaware$9.25 ($10.25 effective April 2021)
Florida$8.65 (will increase to $10.00 on September 30, 2021)
Georgia$7.25 ($5.15 for employers not covered by the Fair Labor Standards Act)
Hawaii$10.10
Idaho$7.25
Illinois$11.00
Indiana$7.25
Iowa$7.25
Kansas$7.25
Kentucky$7.25
Louisiana$7.25
Maine$12.15
Maryland$11.75
Massachusetts$13.50
Michigan$9.65
Minnesota$10.08 (employers with gross revenue > $500,000)

$8.21 (employers with gross revenue < $500,000)
Mississippi$7.25
Missouri$10.30
Montana$8.75
Nebraska$9.00
Nevada$9.00 ($9.75 effective July 1, 2021)

Businesses providing health insurance to employees may pay a wage of $1.00 less than the minimum wage.
New Hampshire$7.25
New Jersey$12.00 (employers with > 6 employees)

$11.10 (seasonal and employers with < 6 employees)
New Mexico$10.50
New York$12.50
North Carolina$7.25
North Dakota$7.25
Ohio$8.80
Oklahoma$7.25
Oregon$12.00 ($12.75 effective July 1, 2021)
Pennsylvania$7.25
Rhode Island$11.50
South Carolina$7.25
South Dakota$9.45
Tennessee$7.25
Texas$7.25
Utah$7.25
Vermont$11.75
Virginia$7.25 ($9.50 effective May 1, 2021)
Washington$13.69
West Virginia$8.75
Wisconsin$7.25
Wyoming$7.25 ($5.15 for employers not covered by the Fair Labor Standards Act)

State minimum wage laws are ever-changing. Stay up-to-date with your state’s minimum wage requirements.

Local minimum wage

Some cities create a local minimum wage. Local wages are most common in bigger cities. Again, if your city’s minimum pay rate is greater than the state and federal minimum wage, you must pay employees the local rate.

For example, the minimum wage in San Francisco is $16.07 per hour. Employers in San Francisco must pay employees at least the local base wage because it is greater than the state and federal minimums.

Use the chart below to get started. However, it’s a good idea to check your city’s laws, as this may not be an all-inclusive list.

[Local minimum wages as of 3/1/2021]

City / StateLocal Minimum Wage
Alameda, California$15.00
Albuquerque, New Mexico$10.50
Belmont, California$15.90
Berkeley, California$16.07
Bernalillo County, New Mexico$9.35
Chicago, Illinois$13.50

$14.00 (employers with 21 or more workers)
Cook County, Illinois$13.00
Cupertino, California$15.65
Daly City, California$15.00
El Cerrito, California$15.61
Emeryville, California$16.84
Flagstaff, Arizona$15.00
Fremont, California$15.00 (employers with fewer than 25 employees)
Las Cruces, New Mexico$10.50
Los Altos, California$15.65
Los Angeles, California$14.25 (employers with 25 or fewer employees)

$15.00 (employers with more than 25 employees)
Malibu, California$14.25 (employers with 25 or fewer employees)

$15.00 (employers with more than 25 employees)
Milpitas, California$15.40
Minneapolis, Minnesota$11.75 (employers with 100 or fewer employees)

$13.25 (employers with more than 100 employees)
Montgomery County, Maryland$13.00 (employers with 10 or fewer employees)

$13.25 (employers with 11 – 50 employees)

$14.00 (employers with 51 or more employees)
Mountain View, California$16.30
Nassau County, New York$14.00
New York City, New York$15.00
Oakland, California$14.36
Palo Alto, California$15.65
Pasadena, California$15.00 (employers with more than 25 employees)
Portland, Maine$12.15
Prince George’s County, Maryland$11.60 (employers with 14 or fewer employees)

$11.75 (employers with 15 or more employees)
Redwood City, California$15.62
Richmond, California$15.21
San Francisco, California$16.07
San Diego, California$14.00
San Jose, California$15.45
San Leandro, California$15.00
San Mateo, California$15.62
Santa Clara, California$15.65
Santa Fe City, New Mexico$12.10 ($12.32 beginning March 1)
Santa Fe County, New Mexico$12.10 ($12.32 beginning March 1)
Santa Monica, California$14.25 (employers with 25 or fewer employees)

$15.00 (employers with more than 25 employees)
SeaTac, Washington$16.57 (for employees in hospitality and transportation industries)
Seattle, Washington$15.00 (employers with 500 or fewer employees who pays $1.69 per hour toward medical benefits and/or employees earns $1.69 per hour in tips)

$16.69 (employers with 500 or fewer employees who do not pay $1.69 per hour toward medical benefits and/or employees earns $1.69 per hour in tips)

$16.69 (employers with 501 or more employees)
Suffolk County, New York$14.00
Sunnyvale, California$16.30
Tacoma, Washington$13.69
Westchester County, New York$14.00

Like state rates, local minimum wage rates are subject to change. Consult your locality for more information.

Exceptions to minimum wage

There are some exceptions to paying your employees minimum wage. Minimum wage varies for:

  • Tipped workers
  • Youth

Minimum wage for tipped employees

The FLSA currently permits a tip credit, which reduces the federal minimum wage for tipped employees. Tipped employees can have a lower base wage because their tips should make up the rest of their wages.

The federal tipped minimum wage is currently $2.13. This applies to employees who earn more than $30 in tips per month.

Individual states can also have minimum wage laws for tipped employees. Check your state’s tipped minimum wage laws to learn more.

Youth minimum wage

The FLSA also permits a special youth minimum wage. You can pay employees under age 20 a wage of $4.25 for the first 90 days of employment. After 90 consecutive days of employment or the employee reaches 20 years of age (whichever comes first), the employee must receive the minimum wage.

Some states have a youth minimum that is greater than the federal youth minimum wage. For more information, check out the U.S. Department of Labor’s website.

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This article has been updated from its original publication date of March 22, 2012.

This is not intended as legal advice; for more information, please click here.

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