How minimum wage laws work
The current federal minimum wage rate is $7.25 per hour. That’s clear-cut. But you may find the other minimum wage provisions a little fuzzy.
The provisions are contained in the Fair Labor Standards Act (FLSA). The act applies to employees of enterprises that have annual gross volume of sales or business done of at least $500,000.
The act also applies to employees of smaller companies if the employees are engaged in interstate commerce or in the production of goods for commerce, such as employees who work in transportation or communications or who regularly use the mails or telephones for interstate communications.
Other workers, such as guards, janitors and maintenance employees, who perform duties that are closely related and directly essential to such interstate activities are also covered by the FLSA.
In addition, the act applies to employees of federal, state or local government agencies, hospitals and schools, and generally to domestic workers. It contains a number of exemptions from the minimum wage that may apply to some workers.
Many states also have minimum wage laws. Some state laws provide greater employee protections, and employers must comply with both the federal and state laws.
For instance, the minimum wage in some states, such as Washington, Oregon, Massachusetts, Vermont and Connecticut, is in excess of $8 an hour. If the state minimum wage is higher than the federal amount, employees are entitled to the greater amount.
With only some exceptions, overtime (time and one-half) must be paid for work over 40 hours a week. Child labor regulations prohibit persons younger than 18 years old from working in certain jobs and additionally sets rules concerning the hours and times employees under 16 may work.
The Wage and Hour Division of the Department of Labor offers a “Handy Reference Guide to the Fair Labor Standards Act,” which explains how the law applies. Click here to print a PDF version of the guide.