What Are the Rules Regarding Minimum Wage?


Quick Answer

The federal government establishes a minimum wage that applies to all of the states. States and localities are free to set their minimum wage at a higher level than the federal minimum but cannot go below it. There are some exceptions for tipped workers, minors, workers with disabilities and students.

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Full Answer

The federal government establishes separate minimum wages for tipped workers, non-tipped workers and youth. States and localities are free to choose to establish their own minimum wages in these general categories. If a state or locality establishes a minimum wage, the worker is legally entitled to whichever is higher of the wages. Most states have established their own minimum wages for tipped and non-tipped workers, and some are higher than the federal minimum. Some localities, such as the cities of Seattle and San Francisco, have established minimum wages that are higher than those of the state they are in.

The rules for the American territories are different. Each has an established federal minimum wage, but they are not uniform nor are they necessarily the same as the wages that apply in the states. The territories of Guam, Puerto Rico and the Virgin Islands have a minimum wage that is equal to that of the states, but there are certain industries and added conditions that can lower the wage to below the minimum legally.

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