The “minimum wage” is the minimum hourly wage that an employer must pay to a covered nonexempt employee for work, and is set by federal, state, and local law. The current federal minimum wage, which was set in 2009 under the Fair Labor Standards Act (FLSA), is $7.25/hour.
States are able to set their own minimum wages, independent of the federal government’s $7.25/hour, and frequently set that number at a higher rate than the federal amount. As of January 2018, more than half of states had minimum wages higher than that federal minimum.
Multiple states have made long-term plans to significantly raise minimum wage rates. For instance, California and Massachusetts each will increase its minimum hourly wage to $15.00 by 2023. Other states are raising their rates incrementally over a shorter period of time. Colorado, for example, has raised its minimum hourly rate by $.90 each year to a final $12.00 in 2020.
Adding to the mathematical and legal issue inherent in these differing numbers, certain local governments have enacted minimum hourly wages that exceed their state minimums. Seattle, Washington is one example. In 2014, that city enacted an ordinance which will increase the minimum wage there to $15.00 an hour, phased in by 2021. Since Seattle’s ordinance, a number of other cities have enacted $15.00 hourly minimum wages, including San Francisco and New York City. However, 25 states have passed laws that restrict local governments from setting minimum wages that differ from the state’s own minimum.
The 2019 updates to state and local minimum wage rates have been compiled in a convenient and accessible format by Chuck McDonald, shareholder in Ogletree Deakins’ Greenville, SC office, and can be found here.
While the minimum wage has become more and more politicized, it still is a matter of legal compliance of which employers should be aware. It is worth noting, as part of that compliance effort, that every employer of employees subject to the FLSA must post, in a “conspicuous” place, a notice explaining that Act. The content is proscribed by the Wage & Hour Division of the Department of Labor, and is available on the DOL’s website.