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State Treatment of Minimum Wage
State Treatment of Minimum Wage

The Department of Labor‘s Wage and Hour Division administers and enforces federal minimum wage law. The established federal minimum wage detailed in the Fair Labor Standards Act (FLSA) [Pdf] is $7.25 per hour. In addition to setting the minimum wage and regulating the rate of pay, the act also sets standards for overtime pay as well as child labor.

States also set their own minimum wage standard, which is above the federal standard; 29 states have a minimum wage higher than the federal, other states have adopted the federal standard while other states have not set a standard. Currently five states have not set a state minimum wage standard, these states include Alabama, Louisiana, Mississippi, South Carolina and Tennessee. Some states specify with provisions in their legislation stating that the higher of either the federal minimum wage or the state minimum wage applies. Moreover, states that do not have their own minimum wage laws automatically adopt the federal minimum wage. Some states minimum wage standards do not apply to employment that is subject to the federal Fair Labor Standards Act. Or they may not apply the state minimum wage standard to employment subject to the federal Fair Labor Standards Act if the state minimum wage standard is higher than the federal minimum wage standard. While other states set their minimum wage at different standards according to income or health benefits. While others set different minimum wages for different businesses according to their gross annual sales as well as different minimum wage standards for employers covered by the federal Fair Labor Standards Act and those who are not.

Numerous states have taken steps to raise minimum wage through enacting legislation including Connecticut, Delaware, Hawaii, Maryland, Massachusetts, Michigan, Minnesota, Rhode Island, Vermont, West Virginia, D.C. Minnesota [JURIST report] recently raised its minimum wage which was previously lower than the federal minimum wage of $7.25 per hour. The law, sets in place an incremental raising of the minimum wage on August 1st of each year until it reaches $9.50 per hour in 2016. Connecticut, Delaware and Rhode Island have also passed legislation raising their minimum wage to a little over $9.00 per hour while Massachusetts and California have set their minimum wage to $10.00 per hour for 2016.

There has also been local initiatives and ordinances [Pdf] to raise the minimum wage in cities especially due to congressional delay in raising in the federal minimum wage. A number of cities in California, New Mexico, and Washington. Specifically, San Jose, Berkeley and San Francisco recently raised their minimum wage to $10.30, $12.25 and $11.00, respectively and Seattle and Tacoma raised their minimum wage to $15.00 and $10.35 per hour for 2016. Locally set minimum wage standards account for the cost of living in specific cities and they may also address annual inflation, factors that may not be adequately addressed at the state or federal levels.