The federal law and the laws of many states set a minimum wage that is meant to protect workers from unfairly low compensation. The idea behind the minimum wage is that people who work and contribute to society should earn enough money to meet their own basic needs and provide for their families.
The federal minimum wage is $7.25 per hour. Many states have different minimum wages, and some local governments (especially in large cities) have also gotten in on the act. Workers are entitled to whichever is highest: the federal, state, or local minimum wage.
For example, in California, the minimum wage is $9 per hour, so workers there get the California wage, not the federal wage. Those lucky enough to work in San Francisco are entitled to the city's even higher minimum wage of $10.74 an hour. But in Georgia, the minimum wage is $5.15 per hour, so workers there get the federal wage of $7.25 per hour, not the Georgia wage. (To find out what the minimum wage is in your state, refer to the U.S. Department of Labor's handy online map at www.dol.gov/whd/minwage/america.htm.)
Not all workers are entitled to the minimum wage. If you are an independent contractor as opposed to an employee, then you are not covered by minimum wage laws. Also, certain categories of employees -- such as farm workers and professional workers -- do not fall within the minimum wage laws (more on this below). Finally, there are special rules for workers who earn tips, for young workers, and for student workers. Read on to learn more about workers who aren't typically covered under minimum wage laws. (And to learn more about wage laws in general, check out Nolo's Employee Wage and Hour Rights FAQ of find out about your state's laws below.)
Independent contractors are not entitled to the minimum wage because, even though they do work for a company, they are not legally considered employees of that company. Independent contractors -- such as consultants and freelancers -- work for hire. The question of whether someone is an independent contractor can be quite technical, and employers sometimes get it wrong (usually by classifying workers as independent contractors when they are really employees). If you have questions about your independent contractor status, Nolo's Working as an Independent Contractor FAQ may have the answers.
Employees Who Aren't Entitled to the Minimum Wage
If you are legally an employee, then you are entitled to be paid at least the minimum wage unless you fall into one of the categories described in this section.
Commissioned sales employees. If you are a salesperson for a company and you earn more than half of your compensation in commissions, then you are exempt from the minimum wage laws if your earnings average one and a half times the minimum wage per hour.
For example, let's say you do business-to-business sales for an office products company. You earn an average of $60,000 per year, and 60% of your total earnings come from commissions. In a 40-hour work week, you average $28.84 per hour. The federal minimum wage is $7.25 per hour, and you earn considerably more than one and a half that amount per hour. Therefore, you do not fall within the minimum wage laws.
Farm workers. Certain types of farm workers are not entitled to the minimum wage. If you are related to the owner of a farm on which you work, you work on a small farm, you are paid piece rate, or you work on the range with livestock, you may not be entitled to the minimum wage. The details of the farm worker exemptions can be quite picky. Consult with an attorney if you have questions.
Seasonal and recreational workers. If you work for an establishment that is seasonal and recreational, then you may be exempt from the minimum wage. This exemption applies to places such as amusement parks that operate only during summer months.
Executive, administrative, and professional workers. This exemption is for so-called white-collar workers. You fall into this category if you are paid on a salary basis (meaning you earn at least $455 a week regardless of how many hours you work and regardless of the quality of your work) and you are an administrative, executive, or professional employee:
- An administrative employee performs office or other non-manual work that is directly related to the management or business operations of the employer or its customers. This type of employee exercises discretion and independent judgment regarding significant issues.
- An executive employee's primary duty is managing the employer's enterprise or a recognized division or department of that enterprise. This type of employee regularly supervises at least two full-time employees (or the equivalent), and either has the authority to hire and fire or has significant input into hiring and firing decisions.
- A professional employee's primary duty is either performing work that requires advanced knowledge in the field of science or learning (of a type that is usually attained through an advanced course of study) or performing work that requires invention, imagination, originality, or talent in a recognized creative or artistic field.
Casual babysitters. People who baby sit every once in a while (on an as-needed basis) are not entitled to the minimum wage.
Workers who receive tips. Under federal law, if part of your compensation comes from tips, then your employer can pay you significantly less than the minimum wage, as long as your hourly wage plus the average amount that you earn from tips equals the minimum wage. Some states don't allow this practice (called taking a "tip credit") and, instead, require employers to pay the full minimum wage to all employees, whether or not they receive tips. For more information, see Nolo's article Tips, Tip Pooling, and Tip Credits: What Service Employees Need to Know.
Young workers. If you are younger than 20, the minimum wage rules are different. Your employer can pay you less than the minimum wage ($4.25 per hour) for your first 90 days on the job. After that, however, you are entitled to the minimum wage regardless of your age (unless, of course, you fall into one of the other exemptions).
Student workers. Full-time students who work in retail or service stores, agriculture, or colleges and universities might not be entitled to the minimum wage if their employee has a special certificate from the federal Department of Labor. In such a situation, the employer still must pay the student at least 85% of the minimum wage.
Other employees who aren't covered. There are other exemptions, such as newspaper delivery people and people who make wreaths in their own homes. If someone tells you that you are not entitled to the minimum wage, you may want to check with a lawyer to make sure you know your rights. See Nolo's Lawyer Directory to locate an employment law attorney in your geographic area.