Payroll Blog

Payroll Training, Tips, and News

picture of 20 dollar bill for federal minimum wage state local

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

When it comes to setting employee salaries or wages, you can’t pay any amount you want. You must follow minimum wage law.

So, what’s minimum wage? Depending on your business location, you might have differing federal, state, and local minimum wage rates. To comply with labor laws, understand 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, but you cannot pay less than the minimum wage.

Who determines minimum wage?

The federal government sets a standard minimum wage that applies to all employees in the U.S. However, states and localities can set minimum wages, too.

So, do you follow federal, state, or local minimum wage rates?

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 rate.

Now that you know what happens if a state’s minimum wage is lower than the federal, you might be wondering what happens if state or local minimum wage is higher than federal.

If the state or local minimum wage is higher than the federal rate, pay your employees the state or local rate, whichever is greater.

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.

The current federal minimum wage is $7.25 per hour.

Minimum wage by state

Again, each state can set its own base 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 Michigan is $9.45 per hour. If you have employees in Michigan, you must pay them at least the state’s minimum since it is greater than the federal minimum wage of $7.25.

Use the map below to see which states follow the federal minimum wage rate and which set their own minimum.

minimum wage law map of federal and state rules

So, how much is minimum wage in your state? Use the chart below to navigate state-by-state minimum wage rates.

[Minimum wages as of 7/1/2019]

State Minimum Wage
Alabama $7.25
Alaska $9.89
Arizona $11.00
Arkansas $9.25
California $11.00 (employers with 25 or fewer employees)
$12.00 (employers with more than 25 employees)
Colorado $11.10
Connecticut $10.10
Delaware $8.75
District of Columbia $14.00
Florida $8.46
Georgia $7.25
Hawaii $10.10
Idaho $7.25
Illinois $8.25
Indiana $7.25
Iowa $7.25
Kansas $7.25
Kentucky $7.25
Louisiana $7.25
Maine $11.00
Maryland $10.10
Massachusetts $12.00
Michigan $9.45
Minnesota $9.86
Mississippi $7.25
Missouri $8.60
Montana $8.50
Nebraska $9.00
Nevada 8.25
New Hampshire $7.25
New Jersey $10.00
New Mexico $7.50
New York $11.10
North Carolina $7.25
North Dakota $7.25
Ohio $8.55
Oklahoma $7.25
Oregon $11.25
Pennsylvania $7.25
Rhode Island $10.50
South Carolina $7.25
South Dakota $9.10
Tennessee $7.25
Texas $7.25
Utah $7.25
Vermont $10.78
Virginia $7.25
Washington $12.00
West Virginia $8.75
Wisconsin $7.25
Wyoming $7.25

Keep in mind that state minimum wage law is subject to change. Check with your state for more information.

Local minimum wage

Some cities create a local minimum wage. Local base wages are most common in bigger cities. 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 $15 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.

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

[Minimum wages as of 7/1/2019]

State Minimum Wage
Alameda, California $13.50
Albuquerque, New Mexico $9.20
$8.20 (if employer provides healthcare and/or childcare benefits)
Belmont, California $13.50
Berkeley, California $15.59
Bernalillo County, New Mexico $9.05
Chicago, Illinois $13.00
Connecticut $10.10
Cook County, Illinois $12.00
Cupertino, California $15.00
Daly City, California $12.00
El Cerrito, California $15.00
Emeryville, California $16.30
Flagstaff, Arizona $12.00
Fremont, California $13.50 (employers with more than 25 employees)
Las Cruces, New Mexico $10.10
Los Altos, California $15.00
Los Angeles, California $13.25 (employers with 25 or fewer employees)
$14.25 (employers with more than 25 employees)
Malibu, California $13.25 (employers with 25 or fewer employees)
$14.25 (employers with more than 25 employees)
Milpitas, California $15.00
Minneapolis, Minnesota $11.00 (employers with 100 or fewer employees)
$12.25 (employers with more than 100 employees)
Montgomery County, Maryland $12.50 (employers with 50 or fewer employees)
$13.00 (employers with more than 50 employees)
Mountain View, California $15.65
Nassau County, New York $12.00
New York City, New York $13.50 (employers with 10 or fewer employees)
$15.00 (employers with more than 10 employees)
Oakland, California $13.80
Palo Alto, California $15.00
Pasadena, California $14.25 (employers with 26 or more employees)
Portland, Maine $11.50
Prince George’s County, Maryland 8.25
Redwood City, California $13.50
Richmond, California $15.00
San Francisco, California $15.59
San Diego, California $12.00
San Jose, California $15.00
San Leandro, California $14.00
San Mateo, California $15.00
$13.50 (501(c)(3) nonprofits)
Santa Clara, California $15.00
Santa Fe City, New Mexico $11.80
Santa Fe County, New Mexico $11.80
Santa Monica, California $13.25 (employers with 25 or fewer employees)
$14.25 (employers with more than 25 employees)
SeaTac, Washington $16.09 (for employees in hospitality and transportation industries)
Seattle, Washington Varies depending on where employees work
Suffolk County, New York $12.00
Sunnyvale, California $15.65
Tacoma, Washington $12.35
Westchester County, New York $12.00

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 for tipped employees

The FLSA 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 tipped minimum wage is $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 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.

Some states have a youth minimum that is greater than the federal youth minimum wage.

Want to make your payroll process easier? Try Patriot’s payroll software. We make payroll simple, and for a low price! Start your self-guided demo now!

Questions, comments, concerns? Head on over to our Facebook page to keep the conversation going!

This article has been updated from its original publication date of 3/22/2012. 

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

Comments are closed.

Try our payroll software in a free, no-obligation

30-day trial!

Easily run payroll in just 3 easy steps.

Start My Free Trial

Or you can EXPLORE A DEMO ACCOUNT!