As of 2015, the states of Alabama, Louisiana, Mississippi, South Carolina and Tennessee do not have a minimum wage law. In states where no minimum wage law is in effect, the federal minimum wage rate applies instead.
When federal and state laws do not have the same minimum wage rates, the higher standard applies. In January 2015, 29 states exceeded the federal minimum wage amount of $7.25 an hour. Some states have chosen to increase their minimum wage amounts automatically based on economic factors such as cost-of-living expenses. Other states have adopted measures to raise their minimum wage using legislative or ballot changes.
There are some cases where the federal minimum wage amount does not fully apply in states where it is used. As of 2009, individuals under the age of 20 can be paid as little as $4.25 an hour for their first 90 consecutive calendar days of employment. Additionally, workers who are allowed to keep tips can be paid as little as $2.13 an hour by their employer. However, if a worker makes less than the federal minimum wage from tips, their employer is required to pay the difference.
The original federal minimum wage amount was 25 cents, introduced as part of Fair Labor Standards Act that was enacted in 1938.