Federal Employment Laws That Impact Compensation and Benefits

Minimum Wage

Minimum wage provisions establish a “floor” on the amount of pay an employee must receive. As of July 24, 2009, the U.S. federal minimum wage per hour is $7.25. In some jurisdictions the minimum wage is much higher than the federal minimum. In California, for example, the minimum wage is $16.90 an hour (2026). Even within certain state jurisdictions this minimum rate can be different. For example, San Francisco has a minimum wage rate of $19.18 an hour (July 1, 2025 - June 30, 2026). And the minimum wage in the city of Los Angeles is $17.87 an hour (July 1, 2025 - June 30, 2026).

FLSA Advocates say a minimum wage is required because of the imbalance of power between the employer and employee. This is particularly true in the lower levels of the economy. It also reduces dependence on government funded welfare programs and lowers the cost of government.

FLSA Opponents argue that a minimum wage creates unemployment for the lowest level of workers and places a burden on small businesses.

In the past, Congress raised the minimum wage by amending the FLSA whenever the floor would fall below about 50% of average hourly earnings. But the U.S. Congress failed to manage the minimum wage level for the ten-year period from 1997 to 2007, which caused various states to enact minimum wage laws with higher minimums than the national law. State minimum wage rates prevail if they are higher than the national rate. The federal rate takes precedence if an employer engages in interstate commerce, like processing a credit card payment.

The latest breakdown of minimum wages for the U.S. is:

• 30 States and the District of Columbia exceed the federal requirement
• 13 States match the federal minimum wage
• 5 States have no minimum wage and 2 have a minimum wage below the federal level – they all default to the federal standard

There are 18 states (AK, AZ, CA, CO, DC, FL, ME, MN, MO, MT, NE, NJ, NV, NY, OH, OR, SD, and WA) that have scheduled annual adjustments for their minimum wages based on varying formulas.

DOL minimum wage website