Key takeaways
- Federal minimum wage: $7.25/hour, unchanged since 2009. Federal tipped minimum: $2.13/hour, unchanged since 1991.
- 30 states plus DC now set a minimum wage above the federal floor; 5 states (AL, LA, MS, SC, TN) have no state minimum wage law at all.
- State rates for 2026 range from $5.15 (GA, WY, on paper) to $17.95 (Washington, D.C.).
- 19 states plus DC now index minimum wage to inflation, meaning it adjusts automatically each year.
- Violations carry real cost: back wages, liquidated damages that double the liability, and federal civil penalties up to $2,374 per violation.
Federal Minimum Wage in the US: Why $7.25 Hasn’t Moved Since 2009
The Fair Labor Standards Act set the current federal minimum wage at $7.25 an hour effective July 24, 2009. Since the FLSA was enacted in 1938, Congress has raised the federal minimum 22 times, but this is now the longest gap between increases in the law’s history, over 16 years and counting. Unlike most state minimums, the federal rate isn’t indexed to inflation, it only changes when Congress passes new legislation and the president signs it. Adjusted for inflation, $7.25 in 2009 buys meaningfully less today, which is part of why so many states have set their own, higher rates instead of waiting on Washington.
Is the federal minimum wage going up in 2026? No. No federal legislation has been enacted to raise it, and it remains $7.25/hour as of 2026. Any change requires an act of Congress, there’s no automatic adjustment mechanism at the federal level.
Minimum Wage by State in the United States (2026)
Thirty states plus DC now require more than the federal floor. Here’s the range, highest and lowest:
| Highest | Rate | Lowest / at federal floor | Rate |
|---|---|---|---|
| Washington, D.C. | $17.95 | Georgia (state law) | $5.15* |
| Washington State | $17.13 | Wyoming (state law) | $5.15* |
| New York (NYC metro) | $17.00 | Alabama, LA, MS, SC, TN | No state law** |
| California | $16.90 | Arkansas | $11.00 |
| New York (rest of state) | $16.00 | Texas | $7.25 (federal floor) |
| Arizona | $15.15 | Alaska | $13.00 (→$14.00 July 2026) |
*Georgia and Wyoming’s state law technically sets $5.15, but nearly all employers there are covered by the FLSA and must pay the federal $7.25 in practice. **No state minimum wage law means the federal $7.25 applies directly. Source: US Department of Labor, State Minimum Wage Laws, updated 2026.
What state has the highest minimum wage? Washington, D.C. leads at $17.95/hour, with Washington State close behind at $17.13. Both are well above the $7.25 federal floor.
What state has the lowest minimum wage? Georgia and Wyoming technically set $5.15 by state statute, but since most employers in those states are covered by the FLSA, the federal $7.25 rate applies in practice. Five states, Alabama, Louisiana, Mississippi, South Carolina, and Tennessee, have no state minimum wage law at all, defaulting entirely to the federal rate.
City Minimum Wage Rates That Beat the State Rate
State rates aren’t the last word. Dozens of cities and counties set their own, higher minimums: West Hollywood, California leads most lists at $20.25/hour, with Seattle around $19.97-$20.29 depending on employer size, San Francisco at $18.67, Denver at $18.29, and New York City at the top of that state’s range. These local rates typically apply only within city limits and often only above a certain employer size, which matters for any business with locations, or remote employees, spanning multiple cities in the same state.
Can a city set its own minimum wage? Yes, in most states. Cities and counties can generally set a local minimum wage above the state rate (never below it), and employers must pay whichever rate, federal, state, or local, is highest for that specific work location.
Tipped Minimum Wage Rules in the US
The federal tipped minimum wage is $2.13/hour, a rate that hasn’t changed since 1991, even longer frozen than the standard federal minimum. Employers can claim a “tip credit” of up to $5.12/hour (the gap between $2.13 and the full $7.25), but only if the employee’s tips actually bring their total pay up to at least the full minimum wage for every workweek; if tips fall short, the employer has to make up the difference. Seven states, California, Minnesota, Montana, Nevada, Oregon, Washington, and Alaska, prohibit the tip credit entirely, requiring the full state minimum wage before tips count at all.
What is the minimum wage for tipped workers? $2.13/hour federally, as long as tips bring total pay to at least $7.25/hour. States can and often do set a higher tipped minimum, Florida’s tipped cash wage is $10.98, for example.
Does every state allow a tip credit? No. Seven states ban it outright and require the full state minimum wage regardless of tips received.
Does Minimum Wage Apply to Everyone?
Not universally. Salaried employees classified as exempt under the FLSA, generally executive, administrative, and professional roles earning at least $684/week ($35,568/year), aren’t covered by minimum wage or overtime rules the same way hourly workers are. A federal training wage of $4.25/hour applies to employees under 20 during their first 90 consecutive calendar days of employment. Independent contractors also fall outside minimum wage law entirely, since it only applies to employees, which is part of why worker classification disputes carry real financial stakes.
Does minimum wage apply to salaried employees? Only if they’re non-exempt. Exempt employees (meeting both a duties test and the $35,568 annual salary threshold) aren’t covered by minimum wage or overtime requirements.
Is there a different minimum wage for minors? Yes, federally, workers under 20 can be paid a training wage of $4.25/hour for their first 90 days. Some states have their own youth wage provisions that differ from this.
Are independent contractors covered by minimum wage law? No. Minimum wage law applies to employees only. Misclassifying an employee as a contractor to avoid minimum wage obligations is a separate, serious compliance risk.
Minimum Wage vs. Living Wage: What’s the Real Gap
Minimum wage is a legal floor, not a measure of what it actually costs to live in a given area. MIT’s Living Wage Calculator, maintained by the Massachusetts Institute of Technology, estimates the hourly income needed to cover basic expenses, housing, food, transportation, healthcare, by county and family size across the US.
In most high-cost metro areas, the calculated living wage runs well above even the highest state minimums, meaning a full-time minimum wage job in cities like San Francisco or Seattle can still fall short of covering basic costs for a single adult, let alone a family. This gap tends to be widest in exactly the cities with the highest local minimum wages, since a higher legal floor is usually a response to a higher cost of living in the first place, not a solution that fully closes the gap on its own.
Does minimum wage keep up with inflation? The federal rate doesn’t, it’s fixed until Congress acts. State rates vary: the 19 states plus DC with inflation-indexed minimums adjust automatically each year based on the Consumer Price Index, while the rest require new legislation for every increase, similar to the federal rate’s pattern. This split explains why the gap between the highest and lowest state minimums keeps widening year over year, indexed states drift upward automatically, while non-indexed states and the federal rate stay flat until a legislature or Congress decides otherwise.
Minimum Wage Increases Scheduled for 2026 and 2027
Several states have increases already locked in by statute or ballot measure, not just projected: Florida rises from $14.00 to $15.00 on September 30, 2026, completing a multi-year phase-in approved by voters in 2020, with annual CPI-based indexing starting in 2027. Alaska moves from $13.00 to $14.00 on July 1, 2026. States with automatic CPI indexing, including Arizona, Colorado, Minnesota, New Jersey, Vermont, and Washington State, adjust every January without requiring new legislation, meaning their rates will tick up again for 2027 by an amount tied to inflation data available closer to the date.
How often does minimum wage change? It depends entirely on the jurisdiction. Inflation-indexed states adjust annually, automatically. States without indexing, and the federal rate, only change when new legislation is passed, which can mean years or even decades between increases.
What Happens If an Employer Pays Below Minimum Wage
Federal penalties for minimum wage violations include back wages owed to the employee, liquidated damages that double the total liability, and civil penalties of up to $2,374 per violation for repeated or willful violations, enforced by the Department of Labor’s Wage and Hour Division. States layer their own penalties on top: California, for example, assesses $100 per pay period per underpaid employee, which compounds quickly for multi-location businesses with a systemic error rather than a one-off mistake.
What happens if an employer pays below minimum wage? The employer owes back wages, and typically liquidated damages equal to that same amount again, doubling the total. Federal civil penalties can reach $2,374 per violation on top of that for willful or repeat violations.
Can an employee sue for unpaid minimum wage? Yes. Employees can file a complaint with the DOL’s Wage and Hour Division or pursue a private lawsuit, and successful claims typically recover both back wages and liquidated damages.
5 Minimum Wage Compliance Mistakes US Employers Make
- Applying the state rate when a city rate is higher. The highest applicable rate always wins, federal, state, or local, checking only the state number is a common and costly oversight.
- Miscalculating the tip credit. Getting the math wrong on the gap between cash wage and full minimum wage, or applying a tip credit in one of the seven states that ban it entirely, is a frequent violation.
- Misclassifying employees as exempt. Meeting the $35,568 salary threshold alone isn’t enough, the role also has to pass the FLSA’s duties test. Salary alone doesn’t make someone exempt.
- Not tracking city-level changes for remote or multi-location staff. An employee working from a different city than company headquarters is still covered by that city’s rate, not the employer’s home base.
- Assuming a rate is fixed once set. In the 19 states plus DC with inflation indexing, rates change automatically every year, missing an annual update is a compliance gap that compounds silently.
Most of these mistakes share a common root: treating minimum wage as a single number to check once, rather than a moving target that depends on exact work location, job classification, and the calendar year. A payroll system or provider that only tracks the state rate, and not the city rate, the tip credit rules, or the annual indexing schedule, will eventually get one of these wrong, usually without anyone noticing until an audit or an employee complaint surfaces it.
Why Minimum Wage Isn’t a Real Salary Benchmark
Minimum wage tells you the legal floor, not what a role should actually pay to be competitive. For real market-rate figures by role and state, see our Average Salary in the United States guide, which covers mean and median pay by state, role, and education level using BLS data, a genuinely different question than what’s legally required.
For companies weighing where a role should be based at all, wage floors are one small piece of a bigger cost picture. If a role doesn’t need to sit in the US specifically, Betternship’s EOR service covers hiring across 15+ African countries, worth a look for roles where location is genuinely flexible.
Minimum Wage in the United States: Frequently Asked Questions
What is the federal minimum wage in 2026?
$7.25 per hour, unchanged since July 24, 2009. There’s no federal legislation currently in place to raise it.
Do all states have to follow the federal minimum wage?
States must pay at least the federal minimum, but can set a higher rate, and most now do. Where a state rate is lower than $7.25 or doesn’t exist, the federal rate applies instead.
How is minimum wage different from a living wage?
Minimum wage is a legal floor set by statute. A living wage, as calculated by tools like MIT’s Living Wage Calculator, estimates what’s actually needed to cover basic costs in a specific area, and is often higher than even the highest state minimum wage.
Does minimum wage vary by industry?
In some states, yes. California, for example, sets a higher minimum wage specifically for fast food workers ($20.00/hour) and tiered rates for healthcare workers, on top of the standard statewide rate.
Where can I find the official current minimum wage for my state?
The US Department of Labor’s State Minimum Wage Laws page maintains the current, official rate for every state, updated as changes take effect.