How Much Is Minimum Wage? 2021 Federal and State Minimum Wage Rates
The minimum wage is exactly what it sounds like — the lowest hourly pay an employer can give to workers. The minimum wage for public and private sector employers is determined by the Fair Labor Standards Act.
The Act specifies the minimum wage for workers under state and federal governments. But it excludes businesses with gross annual revenues lower than $500,000 with employees that do not partake in interstate commerce.
The Act also has exclusions for babysitters, private investigators, switchboard operators and some other small occupations.
How Much Is Minimum Wage?
Typically, there are two types of minimum wages: federal and state minimum wage.
- Federal Minimum Wage: The federal minimum wage is set by the government at the federal level and applies to every worker in the country.
- State Minimum Wage: A state can also choose the minimum wage for workers in its area. If this amount is higher than the federal minimum wage, employers must pay the higher wage.
Federal Minimum Wage
The federal minimum wage is $7.25 per hour, and it has been at this rate for over a decade now. The most recent increase in the federal minimum wage was from $6.55 to $7.25 on July 24, 2009.
State Minimum Wage
Since the government has not raised the federal minimum wage since 2009, many states have taken it upon themselves to raise their local minimum wages. Since January 2014, 28 states and Washington D.C. have changed minimum wages in their regions.
These are:
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- Florida
- Hawaii
- Illinois
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Missouri
- Nebraska
- Nevada
- New Jersey
- New Mexico
- New York
- Oregon
- Rhode Island
- South Dakota
- Vermont
- Virginia
- Washington
- Washington D.C.
- West Virginia
The state minimum wage is higher than the federal minimum wage in D.C. and 30 states, including:
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- Florida
- Hawaii
- Illinois
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Missouri
- Montana
- Nebraska
- Nevada
- New Jersey
- New Mexico
- New York
- Ohio
- Oregon
- Rhode Island
- South Dakota
- Vermont
- Virginia
- Washington
- Washington D.C.
- West Virginia
In D.C. and 18 states, the minimum wage is automatically adjusted every year for inflation and increases in prices.
These include:
- Alaska
- Arizona
- Colorado
- Connecticut
- Florida
- Maine
- Minnesota
- Missouri
- Montana
- Nevada
- New Jersey
- New York
- Ohio
- Oregon
- South Dakota
- Vermont
- Virginia
- Washington
- Washington D.C.
Meanwhile, seven states have a minimum wage below the federal rate or no law regarding minimum wage at all.
These states are:
- Alabama
- Georgia
- Louisiana
- Mississippi
- South Carolina
- Tennessee
- Wyoming.
Workers receive the federal minimum wage in these states.
Of these seven states, Wyoming and Georgia are two states whose minimum wage is below the federal minimum wage. Employers receive a minimum wage of $7.25 in these states as per the federal minimum wage rate.
Good To Know
According to Executive Order 13658, effective Jan 1, 2021, the minimum wage rate of $10.95 per hour must be paid to employers working on covered federal contracts. Meanwhile, tipped employees working on covered federal contracts must be paid a minimum wage of $7.65 per hour.
Final Take
A significant number of states have increased their minimum wage since there has been no change in the federal minimum wage since 2009.
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- U.S. Department of Labor. "Minimum Wage."
- Economic Policy Institute. "Minimum Wage Tracker."
- U.S. Department of Labor. "Questions and Answers About the Minimum Wage."
- Federal Register. 2020. "Establishing a Minimum Wage for Contractors, Notice of Rate Change in Effect as of January 1, 2021."
