The United States government has instituted a minimum wage of pay for workers since 1938. Some states have set higher minimum wages to account for cost of living.
Federal Minimum Wage
The federal minimum wage is set by the federal government. Members of congress review and determine if there should be an increase in the federal minimum wage on a periodic basis. The minimum wage is governed by the Fair Labor Standards Act (FLSA), and the current federal minimum wage of $7.25 was set in 2009. State legislatures who pass their own minimum wage laws normally debate the amount on a yearly basis.
Effective July 24th, 2009, employees who are under the age of 20 must be paid at least $4.25 per hour for the first 90 days of employment. After that employee has completed 90 days of continual employment or reaches the age of 20, the employer must pay him or her at least $7.25 per hour. High school students who are at least 16 years old can be paid at a rate equal to 75% of the federal minimum wage rate while employed as a vocational worker. Employers must obtain a special certificate from the Department of Labor's Wage and Hour National Certification Team prior to hiring these types of employees.
State Minimum Wage
Every state in the country is required to set their own minimum wage that is equal to or greater than the federal standard. Many states have chosen to implement a minimum wage that is higher than the federal level, including California and Washington. California's current minimum wage is $8.00 per hour, while Washington's minimum wage stands at $9.32 per hour. The minimum wage that applies to you will depend on where you live, what type of work you perform, whether or not you get tips and, in some cases, your age. Territories such as Guam, Puerto Rico, and the District of Columbia must also adhere to the same federal minimum wage laws as the rest of the country.
Individuals who live in states that have set a minimum wage higher than the federal standard must be paid an hourly wage equal to or greater than the amount set by the state. Employees who earn tips as part of their living can be paid a lower wage according to local state laws. Federal law states that employees who makes tips as part of their job must be paid at least $2.13 an hour in addition to their tips. If the amount of tips they receive does not add up to the federal minimum wage amount, the employer must compensate them for the difference. In some states, the same rule applies to individuals who work at commission-based jobs.
