In the U.S., the federal minimum wage is the lowest amount that companies can legally pay their employees. Currently, the federal minimum wage is $7.25 per hour. Many cities and states have established minimum wages. Workers must be paid the higher minimum wage, whether it is the federal, state, or local minimum wage. If you believe that your employer has violated the minimum wage laws, talk to the employment lawyers at Swartz Swidler.
Purpose of the minimum wage
Minimum wage laws have been established to prevent employers from exploiting their employees. Workers who are paid the minimum wage should have enough income to buy food, shelter, and clothing. While the minimum wage offers important protection to workers, it has not kept up with inflation. If the minimum wage had kept pace with inflation, it would currently be $10.41 per hour. If the minimum wage had kept up with the pay increases that have been given to executives, it would be $23 per hour. The federal minimum wage only provides $15,080 per year to a worker who works a full-time schedule of 40 hours per week. This is higher than the federal poverty level for a single person, but it is lower than the level for a four-person family. This means that a minimum-wage worker would not be able to support a family on his or her income. In most cities, minimum-wage workers are unable to afford apartments without having roommates.
Setting employee wages or salaries
When employers are establishing what they will pay their employees, they must pay them at least the minimum wage per hour or more. While the federal minimum wage is $7.25, the state minimum wage in New Jersey is $10 per hour. This means that New Jersey employers must pay their employees at least $10 per hour instead of $7.25 per hour since the state’s minimum wage is higher.
Employers must pay their workers the highest minimum wage that applies based on their locations. For example, workers in Pennsylvania have the same state minimum wage as the federal minimum wage, so many workers in the state must be paid $7.25 per hour. However, some locales have higher minimum wages. In Philadelphia, the minimum wage is currently $13.25 per hour and is scheduled to increase to $13.75 per hour on July 1, 2020. This means that although the state and federal minimum wage are $7.25 per hour, Philadelphia employers must pay their workers the higher local minimum wage.
The federal minimum wage is regulated and enforced by the U.S. Department of Labor. While it can be changed, Congress has not acted to increase it since 2009. State minimum wages can also be increased. Many states have passed laws to raise their minimum wages in the last few years.
Local minimum wages are passed and enforced by city governments. When the local minimum wage is higher than the state or federal minimum wage, employers must pay their workers the higher local rate.
Exemptions to the minimum wage laws
Certain workers are exempt from the minimum wage laws and earn less than the statutory amounts. Some of the exemption categories and the wages that must be paid include the following:
- Students under the age of 20 can be paid $4.25 per hour during their first 90 days of employment.
- Disabled workers may receive a special minimum wage if their disabilities reduce their productivity.
- Tipped employees are paid a tipped minimum wage of $2.13 per hour as long as their tips make up the difference to reach the minimum wage. If they don’t, the employer must pay the difference.
- Businesses with annual revenues of less than $500,000 that are not involved in interstate commerce can pay less than the minimum wage.
It is important to note that the tipped minimum wage in New Jersey is $3.13 per hour. This means that employees must receive a minimum of $3.13 per hour, and their tips should make up the difference to reach the state minimum wage of $10 per hour. If they are tipped poorly, their employers must pay up to $7.87 for hours during which they did not earn at least the minimum wage.
Workers who fall in one of these categories but who work for a school, hospital, or the government are not exempt. This means that they still must be paid the minimum wage.
Get help from the employment law attorneys at Swartz Swidler
Most workers must be paid at least the minimum wage. If you believe that your employer is not complying with the highest applicable minimum wage in your location, you may have legal rights to recover the compensation that you should have been paid. Contact the attorneys at Swartz Swidler to schedule a consultation by calling us at (856) 685-1470 or by submitting your information with our online contact form.
