Minimum Wage and Overtime Basics
For most members of the workforce, a paycheck is a major motivation for working in the first place. Compensation is a main factor when employees choose between jobs, make the decision whether to work or retire, and select among places to live for purposes of different costs of living. Federal and state governments recognize the importance of wages, and have enacted many laws designed to protect an employee's interest in receiving fair pay for their work.
Minimum Wage Requirements
Federal law requires that most employees receive a wage of at least $5.15 per hour. Some states have set the minimum at a higher level, and in such states that higher minimum applies. There are some exceptions to the minimum wage, discussed below, but if there is any doubt it is usually assumed that a worker is covered under minimum wage laws.
"Youth Minimum Wage"
Federal law (and some state laws) allow employers to pay a lower minimum wage to employees under twenty years of age. This lower wage rate is sometimes called a "training wage" or "youth minimum wage." Federal law sets this lower minimum at $4.25 per hour, but this lower wage may be paid only for the first 90 days of employment, and an employer may not do anything that displaces one worker who is paid more in order to pay another worker the lower wage.
Employees Who Earn Tips
Under federal law, an employee who regularly receives tips as a part of his or her pay also gets a minimum wage of $2.13 per hour. In order to have this exemption apply, the employee must regularly receive more than $30 per month in tips, and be allowed to keep all tips earned. The combined tips-plus-wages must add up to at least the $5.15 per hour minimum. If tips-plus-wages do not equal that minimum, the employer must make up the difference.
Exemptions from Minimum Wage Requirements
Federal law (and many state laws) mandate that certain types of employees are exempt from minimum wage requirements -- such as administrative, professional, executive, and outside sales employees. In addition, federal and state laws provide for additional exemptions from the minimum wage for employees who are full-time college students, workers on some farms, workers employed in fishing enterprises, and other types of employees.
Page 1 of 2
Next Page
