Minimum wage in the USA: how does it work and why does it vary?

Written by: D4U Immigration

The issue of the minimum wage in the USA is very different from what we have in Brazil. That’s why it’s worth exploring this topic and understanding it better.

Although there are federal regulations on the subject, the American minimum wage varies according to the state and profession, and some professions are exempt from this logic – such as tipped professionals.

It is therefore a very complex subject. That’s why today we’re going to show you everything you need to know about the minimum wage in the United States.

Minimum wage in the USA: how does it work?

According to the website of the US Department of Laborconsulted in September 2023, the federal minimum wage in the United States was $7.25 per hour.

However, some states and cities have higher minimum wages than the federal minimum, which means that workers in those places receive a higher minimum payment.

This is because, in the United States, the Minimum Wage is regulated by the Fair Labor Standards Actwhich establishes the right to a minimum wage for workers.

As such, the federal minimum wage in the United States is $7.25 per hour. This figure applies to workers covered by the legislation, i.e. those who are not exempt from this rule, such as tipped employees.

In these cases, the minimum wage is $2.13 per hour. However, the sum of the tips received plus the $2.13 must reach at least $7.25 per hour. If this does not happen, the employer is obliged to pay the difference.

In addition to the federal minimum wage, some states and cities in the US have the power to set their own minimum wage.

When this happens, if the minimum amount set by the local government is higher than the federal one, the worker must receive the higher amount.

In addition, some states may have different rules for employees who rely on tips, offering a higher minimum wage.

Knowing the value of the minimum wage in the states can make it easier to choose a city and the process of renting a property in the USA. Read also: American visas: what they are, their importance and how to get them

US states with wages higher than the federal minimum

US states with wages higher than the federal minimum

In total, 29 of the 50 American states have a higher minimum wage than the federal minimum. Check them out below:

1. Florida

Florida sets its minimum wage at $11.00 per hour. In addition, it is important to note that the state minimum is adjusted annually based on a specific formula.

2. California

California has one of the highest minimum wages in the country, set at $15.50 per hour, but there are also several specific regulations on overtime pay in the state.

3. Virginia

The state of Virginia has established a minimum wage of $12.00 per hour that applies to a wide variety of sectors.

4. Maryland

In Maryland, the minimum wage is tiered based on the size of the employer.

Employers with 15 or more employees must pay $13.25 per hour, while those with fewer than 15 employees pay $12.80 per hour.

As of January 2024, the state plans to raise the minimum wage to $15.00 per hour for all employers.

5. Delaware

Delaware has set its minimum wage at $11.75 per hour. They also follow the federal minimum wage when it is higher.

6. New Jersey

New Jersey has established a minimum wage of $14.13 per hour. However, there is a minimum rate of $12.93 per hour for seasonal and small employers with fewer than six employees.

7. New York

New York State has different minimum wages for different regions.

The basic minimum wage is $14.20 per hour, but in Long Island, Westchester and New York, it’s $15.00 per hour.

In addition, New York has specific regulations for overtime pay, with different premiums for hours worked beyond the regular schedule.

8. Connecticut

Connecticut has established a minimum wage of $15.00 per hour.

In addition, in the restaurant and hotel sector, an additional payment of time and half the minimum wage is required on the seventh consecutive day of work.

9. Maine

In Maine, the minimum wage is $13.80 per hour. The state also adjusts the minimum annually based on a specific formula.

10. Massachusetts

Massachusetts has set its minimum wage at $15.00 per hour. They ensure that the state minimum wage is always at least $0.50 higher than the federal one.

11. Vermont

The state of Vermont has set its minimum wage at $13.18 per hour. This figure applies to employers with two or more employees.

12. Rhode Island

In Rhode Island, the minimum wage is $13.00 per hour. In addition, there are specific regulations requiring time-and-a-half pay for work on Sundays and holidays in certain retail sectors and other businesses.

13. Ohio

Ohio has a tiered approach to its minimum wage. Employers with annual gross revenues of $372,000 or more must pay $10.10 per hour, while employers with annual gross revenues of less than $372,000 follow the federal minimum of $7.25 per hour.

14. Michigan

Michigan has established a minimum wage of $10.10 per hour for employers with two or more employees.

In addition, they have a gradual increase scheduled over the years.

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15. Minnesota

Minnesota has different minimum wages for large employers (with annual revenues of $500,000 or more) and small employers (with annual revenues of less than $500,000).

Large employers pay $10.59 per hour, while small employers pay $8.63 per hour.

16. Illinois

Illinois requires employers with four or more employees, excluding family members, to pay a minimum wage of $13.00 per hour.

17. Missouri

The minimum wage in Missouri is $12.00 per hour. However, certain job categories are exempt from these requirements.

18. Arkansas

Arkansas has established a minimum wage of $11.00 per hour for employers with four or more employees.

19. Nebraska

Nebraska has a minimum wage of $10.50 per hour for employers with four or more employees.

20. South Dakota

In South Dakota, the minimum wage is $10.80 per hour. This amount is adjusted annually.

21. Colorado

Colorado has set its minimum wage at $13.65 per hour, with specific rules for overtime pay in certain sectors.

22. New Mexico

The minimum wage in New Mexico is $12.00 per hour, with additional rules for overtime pay.

23. Montana

Montana has different minimum wages based on the size of the business and annual sales. The minimum ranges from $4.00 to $9.95 per hour.

24. Washington

The state of Washington has established a minimum wage of $15.74 per hour, with specific regulations for compensating time off in lieu of overtime pay.

25. Oregon

Oregon has a varied minimum wage based on location, with rates ranging from $13.20 to $15.45 per hour.

26. Nevada

The minimum wage in Nevada varies based on whether the employer offers health insurance, with rates of $11.25 or $10.25 per hour.

27. Arizona

Arizona has established a minimum wage of $13.85 per hour.

28. Alaska

The minimum wage in Alaska is $10.85 per hour, with additional provisions for overtime pay.

29. Hawaii

Finally, in Hawaii, the minimum wage is $12.00 per hour, and some categories of workers may be exempt from this rule.

Remember that the information on state minimum wages is based on data from September 2023.

Therefore, always consult official sources in the respective states for the most up-to-date and accurate information.

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