Define National Minimum Wage
The national minimum wage is part of the Fair Labor Standards Act (FLSA) of 1938. It requires employers to pay a certain hourly wage. The national minimum wage was $0.25 in 1938. In July 2009, it became $7.25.
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Employers Exempted
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Employers who are not engaged in interstate commerce and whose business volume is less than $500,000 annually are not subject to the FLSA minimum wage requirements.
State Minimum Wage Laws
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States are allowed to set their own minimum wage laws, either higher or lower than the federal minimum wage law. Employees who are eligible for both minimums will be paid the higher of the two.
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Penalties
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Department of Labor investigators can impose fines of up to $10,000 for minimum wage law violations. For first-time violators, the investigators try to work with employers to correct the violations and back-pay the employees.
Youth Minimum Wage Exception
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The 1996 amendments to the FLSA provide an exception for workers under 20 years old. The employer can pay these workers a minimum wage of $4.25 hourly for the first 90 days of employment.
Employees Exempted
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Employees who are classified as exempt from FLSA are usually salaried management and executives. These employees are not covered by minimum wage, as they usually receive salaries high above minimum wage. Employees of other small operations--such as newspaper delivery, fishing, farming and certain seasonal jobs--are not covered.
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References
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