State Minimum Wage Laws

Although federal law establishes a baseline for minimum wages across the country, states may set higher standards than the federal law provides. Workers covered by the federal wage law are entitled to at least the federal minimum wage of $7.25 per hour. In states where no minimum wage has been set or the state has a lower minimum wage than the federal wage most workers will be entitled to the federal minimum wage. On the other hand, some states have set a minimum wage rate higher than the federal minimum wage. In these states, most workers will be entitled to the higher state minimum hourly wage.

Some kinds of workers are deemed to be "exempt employees," to whom minimum wage and overtime pay requirements do not apply. Exempt employees include farm workers and public sector employees, among others. Some exempt employees, such as agricultural workers or truck drivers, have wage rates governed by laws other than the Fair Labor Standards Act (FLSA), which establishes the rates for non-exempt employees.

Tipped Employees Under the FLSA

Employees who receive more than $30 in tips on a monthly basis are subject to different rules under the FLSA than other kinds of employees. While employees are required to pay tipped employees the minimum wage, they are permitted to factor tips into their wage obligation in most states. This is referred to as a "tip credit."

Tipped employees are entitled to an employer-paid wage of at least $2.13 per hour; more if the tips don't total $5.12 per hour since they are still required to earn a minimum amount equivalent to the federal minimum wage of $7.25. For an employer to legally employ the tip credit they must follow a set of rules involving disclosures to the employee. Those who fail to make the appropriate disclosures may be required to pay the federal minimum wage in addition to allowing them to retain all tips received. The employer must also make up any difference between the federal minimum wage and the sum of the employer-made wages and tips earned.

State Pay Day Requirements

Most states have regulations that establish a minimum frequency for paying employees referred to as a payday requirement. State payday laws typically require that employers pay employees either twice a month or every other week, though some states require weekly or monthly payment. Only Alabama and South Carolina do not have payday requirements and some states have more complicated rules. Michigan, for instance, provides different payday rules depending on the employee's profession.