Employers and companies are all about profit. Stakeholders and investors are seeking returns, employees need to be paid and operating expenses met, and a myriad of other costs considered. Spending as little money as possible, to make as much money as possible is the goal companies work to achieve. Without regulation, things can get out of hand, especially with cost cutting. Employees particularly would be at the losing end, being paid as little as possible for the work that they do. To control this situation, the government has put in place a minimum wage.

Minimum Wage History

To fully understand the state minimum wage, one needs to look back in history to when it started out. The minimum wage made its first appearance in Australia and New Zealand. The intention of the minimum wage at that time was to help unskilled workers elevate the amount that they earn. Within the US, in the late nineteenth century, there were a significant amount of people who were hired to work in sweat shops. There wages were so low, it was impossible for those working in these sweat shops to afford their necessities. This is when the idea of a national minimum wage was first explored. It was in 1938 when federal minimum wage legislation was applied as a part of the Fair Labor Standards Act. The very first rate was $0.25 an hour.

Understanding Minimum Wage Regulations

The minimum working wage refers to the lowest possible rate that an employer can pay an employee. The rate may vary from state to state, though there is the federal minimum that all states must abide to. Currently, the federal minimum wage is $7.25 per hour, a rate that was set in 2009. Employees have the right to the higher minimum wage, when comparing the state and the federal rates. This rate is especially important for non-exempt employees.

From 2019, various states have reviewed their minimum wage rates in line with the increased costs of living. For example, in Florida, the minimum wage has been increased to $8.56 per hour, in Michigan it is 9.65 per hour and in Colorado, it is $12.00 per hour. There are cities within states that have further elevated their minimum wage rates. Such as Seattle, where the minimum wage is $16.00 per hour. In Seattle, there is a stipulation for getting this minimum wage, and that is the company needs to employ more than 500 workers worldwide.

Interesting Exceptions

There are some cases where an employer will pay less than the federal minimum wage. If the employee is working in a job where they will receive tips, the minimum wage can go as low as $2.13 per hour. The assumption is that the amount that they will receive in tips will match the federal minimum wage. If the tips don’t match up, the employer needs to pay the difference.

Young workers below the age of 20 are subject to a minimum wage of $4.25 for their first 90 consecutive calendar days of employment. Following this period, and when they are above 20, they can then receive the federal minimum wage.