The federal minimum wage is currently $7.25 per hour and has been since July 24, 2009. Many states set their own minimum wage. In cases where the employee is subject to both state and federal minimum wage, the employee must receive the higher minimum wage of the two options. Federal minimum wage standards have had three changes in the past ten years:
- $5.85 per hour effective July 24, 2007
- $6.55 per hour effective July 24, 2008
- $7.25 per hour effective July 24, 2009
Employers who have employees who receive tips are allowed to claim wage credits based upon the amount of dollars in tips their employees receive. If employers are eligible to receive tip credits, they must pay tipped employees at least $2.13 per hour. The tips received by employees and their base pay must add up to the mandated minimum wage.
The Fair Labor Standards Act requires employers to pay covered and nonexempt employees overtime pay for any hours worked over 40 per workweek. The rate of pay must be at least one and one-half times the regular rate of hourly pay. There is no limit to the amount of overtime hours employees might work in a single workweek; however, employees who receive overtime must be at least 16 years old. Employers are not mandated to pay overtime for holidays and weekends.