Federal Minimum Wage and U.S. Labor Laws

Federal minimum wage 2009

Federal minimum wageSince July 24, 2009, the federal minimum wage has been $7.25 per hour. That means in every state in the United States, employers must pay workers at least $7.25 per hour. In Washington, D.C., it means employers must pay $8.25 per hour because the law there dictates they must pay $1 more than minimum wage.

The $7.25 federal minimum wage amounts to about $1,200 per month — before taxes. Taxes account for an average of 24 percent, depending on the area, which leaves the federal minimum wage earner with less than $1,000 per months to take home. Of course, that’s only for people who work 40 hours per week. It’s no wonder so many families end up needing faxless payday loans to help them get by.

How low can you go?

Despite the fact that the federal minimum wage is not a living wage for anyone who pays rent, some states such as Colorado want to pay less than the federal minimum wage. Colorado, which bases its minimum wage on inflation, says it wants to lower its minimum wage to $7.24 an hour. Of course, it can’t legally do that, but it speaks volumes about the economy.

Many states already have minimum wages higher than the federal minimum wage, and in states where the minimum wage is based on inflation, it could mean the workers in those states would take pay cuts if the state minimum wage is lowered. The idea of a lower minimum wage is especially catastrophic now, when so many unemployed workers are being forced to take low-paying jobs. More people are struggling to get by on minimum wage, so that many more people would be affected if states lower their minimum wages.

When employers don’t pay federal minimum wage

Lucky for Colorado workers and any other states contemplating lowering their minimum wage, they can’t. Furthermore, businesses who try to skirt the federal minimum wage face stiff penalties, as a couple of businesses recently found out.

Southern California Maid Service and Carpet Cleaning Inc. must pay employees $3.5 million in back wages by Nov. 12, a judge ruled today. The owners also spent five days in jail. A site called 7th Space reports:

The owners of a Southland residential cleaning service were taken into custody and later released after failing to comply with a court order directing payment of $3.5 million in back wages, plus interest, fines and liquidated damages to at least 385 workers.

Lost in translation

The owners of Tasty Buffet in Memphis also are being fined for failing to pay workers minimum wage. The fine has doubled to $459,658 after the owners failed to pay the original fine.

The owners are contesting this, saying they provided food and lodging as well as wages for many employees. They also say they didn’t understand the labor laws.

Federal minimum wage exceptions

It is true that in certain cases employers don’t have to pay the federal minimum wage. For example, employers aren’t required to pay commissioned sales employees the federal minimum wage.  Other exemptions include companions for the elderly, workers with disabilities, newspaper deliverers, farm workers and fishermen.

In some states, food service workers who make tips also are paid less than the federal minimum wage, though that is becoming less common.

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