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If you’re hiring in the United States, it’s important to adhere to the latest laws surrounding minimum wage to remain compliant as an employer. Learn what the updated minimum wage is, how it applies to different workers, and factors influencing minimum wage in the United States.
Capital City
Washington, D.C.
Currency
United States Dollar
(
$
)
Timezone
EST, CST, MST, PST
(
GMT -5/6/7/8
)
Payroll
Bi-weekly
Employment Cost
9.5% - 12.8%
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What Is the Minimum Wage in the United States?
As of February 2025, the federal minimum wage in the United States remains at $7.25 per hour, a rate that has been unchanged since 2009. However, individual states have the authority to set their own minimum wages, and many have established rates higher than the federal level.
For instance, as of January 1, 2025, California's minimum wage is $16.50 per hour, while Washington state's minimum wage is $16.66 per hour. In total, 34 states, territories, and districts have minimum wages above the federal rate. Here is an overview of how minimum wage rates differ by state:
How Does Minimum Wage Apply to Different Workers in the United States?
The application of minimum wage laws in the United States varies based on employment status, industry, and worker classification. While the federal minimum wage sets a baseline, state laws and specific regulations can influence how minimum wage standards are applied to different categories of workers.
Full-Time Employee Wages
Full-time employees are generally entitled to the prevailing minimum wage in their respective states or localities. Some states have enacted higher minimum wages than the federal rate to account for the cost of living and economic conditions. For example, as of January 1, 2025, Massachusetts has a minimum wage of $15.00 per hour, while Colorado's minimum wage is $14.81 per hour.
Part-Time Employee Wages
Part-time employees are typically subject to the same minimum wage laws as full-time workers. Employers are required to pay part-time workers at least the minimum wage applicable in their state or locality for all hours worked. However, certain exceptions may apply, such as for tipped employees or those in specific industries.
Interns and Trainees
The entitlement of interns and trainees to minimum wage depends on various factors, including the nature of their work and the structure of their programs. The U.S. Department of Labor has established criteria to determine whether an intern or trainee is considered an employee under the Fair Labor Standards Act (FLSA). If these criteria are met, the individual may be exempt from minimum wage requirements. Otherwise, they are entitled to at least the federal or applicable state minimum wage.
Expatriates
Expatriates working in the United States are generally subject to the same minimum wage laws as domestic workers. Employers must comply with federal and state minimum wage regulations when compensating expatriate employees. However, visa classifications and employment agreements may influence specific terms of compensation.
Factors Influencing Minimum Wage in the United States
Several factors contribute to the determination and variation of minimum wage rates across the United States, including industry-specific considerations, economic conditions, and government policies.
Industry-Specific Variations
Minimum wage laws can vary significantly across different industries. Certain sectors, such as hospitality and agriculture, may have different minimum wage standards due to factors like tipping practices or seasonal work. For example, tipped employees in the hospitality industry may be subject to a lower base wage, provided that their tips bring their total earnings to at least the standard minimum wage.
Economic Conditions
Economic factors such as inflation, cost of living, and employment rates play a crucial role in shaping minimum wage policies. States with higher costs of living often implement higher minimum wages to ensure that workers can afford basic necessities. Additionally, adjustments to minimum wage rates may be made to account for inflation and maintain the purchasing power of workers.
Government Policies and Legislation
Government policies at both federal and state levels significantly influence minimum wage rates. Legislation such as the Fair Labor Standards Act (FLSA) establishes federal minimum wage standards, while state legislatures can enact laws to set higher rates or address specific regional economic conditions. For instance, the Raise the Wage Act of 2023 was proposed to increase the federal minimum wage to $17 per hour by 2028, reflecting ongoing legislative efforts to adjust wage standards.
Minimum Wage History and Trends in the United States
The federal minimum wage was first established in 1938 at $0.25 per hour. Over the years, it has been increased multiple times to reflect economic changes and cost of living adjustments. The most recent federal increase occurred in 2009, setting the rate at $7.25 per hour. Since then, many states and localities have taken the initiative to raise their own minimum wages in response to economic conditions and advocacy for living wages. As of 2025, discussions continue at both federal and state levels regarding further increases to ensure wages keep pace with inflation and living costs.
How To Stay Compliant When Hiring in The United States With Playroll
Expanding your workforce across international borders is an exciting step, but it can be a logistical nightmare to hire and pay employees in different countries. That’s the advantage of using a trusted Employer of Record like Playroll:
- Scale your global team: Legally hire and swiftly onboard new hires in 180+ regions without the red tape by offloading the HR admin to Playroll, so you can freely explore new markets and focus on growth.
- Pay your team accurately: Ensure your international employees and global contractors are paid on time, every time, and set up centralized global payroll processes.
- Meet minimum wage requirements: Our built-in compliance checks and vetted contracts mean your agreements will always meet all legal requirements for statutory benefits, minimum wage, and more.
Disclaimer
THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). Playroll does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect Playroll’s product delivery in any given jurisdiction. Playroll makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.
ABOUT THE AUTHOR
Milani Notshe
Milani is a seasoned research and content specialist at Playroll, a leading Employer Of Record (EOR) provider. Backed by a strong background in Politics, Philosophy and Economics, she specializes in identifying emerging compliance and global HR trends to keep employers up to date on the global employment landscape.
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FAQS
What is the current hourly or daily minimum wage in the United States?
As of February 2025, the federal minimum wage is $7.25 per hour. However, many states have set higher minimum wages. For example, California's minimum wage is $16.50 per hour, and Washington state's is $16.66 per hour.
Are there exceptions to the minimum wage law in the United States?
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Yes, there are exceptions. Certain categories of workers, such as tipped employees, some student workers, and individuals in specific training programs, may be subject to different wage standards. For instance, tipped employees can be paid a lower base wage, provided their tips bring their total earnings to at least the standard minimum wage.
How often is the minimum wage reviewed in the United States?
The federal minimum wage does not have a mandated review schedule and requires an act of Congress to change. However, many states and localities have laws that require regular reviews or automatic adjustments to their minimum wage rates, often tied to inflation or cost of living indices.
What is the minimum wage vs. living wage in the United States?
The minimum wage is the legally mandated lowest hourly pay rate for workers, while the living wage is an estimated income level that allows an individual or family to afford adequate shelter, food, and other necessities. In many areas, the minimum wage is lower than the calculated living wage, leading to discussions about the need for wage increases to ensure economic self-sufficiency for workers.
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