what happens if a stateâs minimum wage is lower than the federal minimum wage?
What happens if a state’s minimum wage is lower than the federal minimum wage?
Answer:
When a state’s minimum wage is lower than the federal minimum wage, the higher standard applies. This means that employees in that state will be entitled to receive the federal minimum wage, which takes precedence over the lower state minimum wage.
The Fair Labor Standards Act (FLSA) sets the federal minimum wage that employers must pay covered non-exempt employees. As of 2021, the federal minimum wage is $7.25 per hour. However, many states have established their own minimum wage rates, which can be higher than the federal minimum wage. When there is a discrepancy between the state and federal minimum wage rates, employees are legally entitled to the higher wage rate, which is the federal minimum wage in this case.
It is important to note that if both the state and federal minimum wage laws apply, the employer must pay the higher of the two rates. This ensures that employees are compensated fairly and in compliance with labor laws. Failure to pay employees the correct minimum wage can result in legal consequences for the employer, including penalties and fines.