Important: please read
This is general information, not legal advice. It covers federal rules only, unless we say otherwise. State and local law may be different or stricter: check our state employment law hub. Always check the official source before you act. Rules can change. Resources disclaimer
In short
- The federal minimum wage is $7.25 an hour, in effect since July 24, 2009.
- When state and federal rates both apply, the employee gets the higher rate.
- Alabama, Louisiana, Mississippi, South Carolina and Tennessee have no state minimum wage, so the federal rate applies to covered employers.
- Tipped employees: at least $2.13 an hour in cash wages, with a maximum tip credit of $5.12.
- Many cities and counties set their own higher rates.
The federal rate
The federal minimum wage for covered non-exempt employees is $7.25 per hour, effective July 24, 2009. [US DOL] (opens in a new tab)
Which rate applies?
Where an employee is covered by both state and federal minimum wage laws, the employee is entitled to the higher of the two. [US DOL] (opens in a new tab) City and county rates can be higher again. Use our minimum wage calculator and the 50-state employment law hub to check your location.
| Situation (DOL state table, updated July 1, 2026) | What it means |
|---|---|
| No state minimum wage: Alabama, Louisiana, Mississippi, South Carolina, Tennessee | Covered employers pay the federal $7.25. [US DOL] (opens in a new tab) |
| State rate below $7.25: Georgia and Wyoming ($5.15) | Employers covered by the FLSA must pay the federal $7.25. [US DOL] (opens in a new tab) |
| State rate above $7.25 | Pay the state rate (or a higher local rate). |
State rates change often, many on January 1. Check the DOL state table and your state labor department before setting pay.
Tipped employees
Under the FLSA, you must pay a tipped worker at least $2.13 an hour in cash wages. The maximum tip credit is $5.12 an hour, so cash wage plus tips must reach at least $7.25. [US DOL Fact Sheet 15] (opens in a new tab) Many states set a higher cash wage or do not allow a tip credit.
Youth minimum wage
Employees under 20 may be paid not less than $4.25 an hour for their first 90 consecutive calendar days of employment, as long as they do not displace other workers. [US DOL] (opens in a new tab)
Who the federal law covers
The FLSA covers businesses with at least $500,000 in annual sales, plus hospitals, schools and government agencies, and also individual workers whose work regularly involves interstate commerce. [US DOL Fact Sheet 14] (opens in a new tab) To turn an hourly rate into a yearly figure, try our hourly to salary calculator.
Common mistakes
- Paying the federal $7.25 in a state or city with a higher rate.
- Missing a January 1 or July 1 rate increase.
- Taking a tip credit where your state does not allow it.
- Keeping a youth worker on $4.25 after their first 90 days.
- Forgetting that unpaid training or off-the-clock work can push pay below the minimum.
Related free tools
Official sources
- US DOL: Minimum wage (opens in a new tab)
- US DOL: Minimum wage topic page (opens in a new tab)
- US DOL: State minimum wage laws (opens in a new tab)
- US DOL Fact Sheet #15: Tipped employees (opens in a new tab)
- US DOL Fact Sheet #14: Coverage under the FLSA (opens in a new tab)
Checked . If a source has changed since then, the official source wins.
Frequently asked questions
What is the federal minimum wage in 2026?
$7.25 an hour. It has been in effect since July 24, 2009.
My state's rate is higher. Which do I pay?
The higher rate. When both state and federal law apply, the employee is entitled to the higher of the two.
What can I pay tipped employees?
Under federal law, at least $2.13 an hour in cash wages, with a maximum tip credit of $5.12, so total pay reaches $7.25. Many states require more.
Is there a lower wage for young workers?
Under federal law, employees under 20 may be paid at least $4.25 an hour for their first 90 consecutive calendar days, if they do not displace other workers.
Which states have no minimum wage law?
According to the DOL, Alabama, Louisiana, Mississippi, South Carolina and Tennessee. The federal rate applies to covered employers there.
More free guides
- HIRINGHiring your first employee in the US
- HIRINGEmployee or independent contractor?
- HIRINGForm I-9 basics
- PAYOvertime basics
- PAYExempt vs. non-exempt employees
- TIME OFFWriting a simple PTO policy
- TIME OFFFamily and medical leave (FMLA)
All free guidesFree toolsFree templatesState employment laws
