Federal Minimum Wage – Little Known Facts

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Minimum wage in the United States was established by the Fair Labor Standards Act of 1938. So, the minimum wage has been around for awhile.

Every state is different as to what their minimum wage is. Many states have established their own minimum wage — which is usually higher than the federal minimum wage.

For example, the current federal minimum wage is $7.25. (It increased to $7.25 from $6.55 on July 24, 2009.)

However, a states minimum wage can vary. Like California, and Oregon already had state minimum wages above that at $15.50 and $15.45 an hour. In my home state of Washington, the minimum wage is $15.74.

The nice thing about this is the fact that in situations where the federal state laws have different minimum wages, the higher wage always prevails. This works to the benefit of minimum wage workers, so employers cannot choose to pay the lower minimum wage.

Minimum Wage Increase

The 2009 increase in the federal minimum wage affected 13 million Americans,

However, not everyone is happy about the minimum wage being increased. Some think it should have been postponed due to the current state of our economy.

That said, it is generally believed that by increasing the minimum wage approximately $5.5 billion will be pumped into our failing economy. The hope is that it will be part of the stimulus that begins to turn our economy around.

How Minimum Wage Works

The Fair Labor Standards Act (FLSA) oversees the minimum wage, record keeping, overtime pay, and even child labor.

The FLSA covers companies that have employees who participate in interstate commerce. Those companies must make an income of at least $500,000.

• Companies that engage in interstate commerce and don’t make that much aren’t covered under the The Fair Labor Standards Act.
• Some companies, regardless of their yearly income, are covered under the FLSA. These enterprises include hospitals, as well as federal, state and local agencies — to name just a few.

Some types of employees are exempt from the minimum wage and overtime pay requirements that fall under the FLSA. They include:

• Executive, administrative, and professional employees (including teachers and academic administrative personnel in elementary and secondary schools), outside sales employees, and certain skilled computer professionals (as defined in the Dept. of Labor’s regulations)
• Employees of certain seasonal amusement or recreational establishments;
• Employees of certain small newspapers and switchboard operators of small telephone companies;
• Seamen employed on foreign vessels;
• Employees engaged in fishing operations;
• Employees engaged in newspaper delivery;
• Farm workers employed on small farms (i.e., those that used less than 500 “man‑days” of farm labor in any calendar quarter of the preceding calendar year); and
• Casual babysitters and persons employed as companions to the elderly or infirm.

For companies that fall under the FLSA and don’t comply with it, the penalties are relatively harsh and can include fines of $10,000, as well as criminal prosecution. (And that is just for a first offense!) This is, of course, for employers who have worked with the Department of Labor and have continued to willfully not comply. Getting convicted a second time can actually result in going to prison.

Employees who fall under the FLSA and who believe that their employer is violating the Act can file a complaint with their local Wage and Hour Office.

See the living wage in every state.

More About The Federal Minimum Wage

• What Exactly Is A Minimum Wage Job?
• Minimum Wage Increase: A Working Woman’s Issue
• 5 Things You Didn’t Know About The Minimum Wage
• Minimum Wage And Fairness
• Economic Policy Institute’s Minimum Wage Issue Guide
• The Minimum Wage: Washington’s Perennial Myth
• Survival Tips For Single Parents Below The Living Wage
• The Effect Of Minimum Wage On Small Business