What is the US federal minimum wage in 2026?

What is the current federal minimum wage?

The federal minimum wage is $7.25 per hour, effective since 24 July 2009. It is the longest period without an increase since the federal minimum wage was established in 1938 under the Fair Labor Standards Act (FLSA).

All employees covered by the FLSA must receive at least the federal minimum wage. When a state or local minimum wage is higher than the federal rate, the employer must pay the higher amount.

Which employees are covered?

The FLSA minimum wage applies to:

• Employees of enterprises with annual gross volume of sales or business of at least $500,000
• Employees engaged in interstate commerce or in the production of goods for interstate commerce
• Employees of federal, state, and local government agencies, hospitals, and schools

In practice, the vast majority of US workers are covered by the FLSA minimum wage provisions.

What are the exceptions to the federal minimum wage?

Several categories of workers may be paid below the standard minimum wage:

• Tipped employees: Employers may pay as little as $2.13 per hour if tips bring the employee's total hourly compensation to at least $7.25 (the "tip credit")
• Workers under 20: Employers may pay $4.25 per hour during the first 90 consecutive calendar days of employment
• Student workers: Full-time students in retail, service, agriculture, or at universities may be paid 85% of minimum wage ($6.16/hour) under certain conditions
• Workers with disabilities: Employers with a certificate from the Wage and Hour Division may pay below minimum wage to workers whose productivity is impaired by a disability

What are state and local minimum wages?

As of 2026, 30 states and the District of Columbia have minimum wages above the federal level. Notable examples:

Five states (Alabama, Louisiana, Mississippi, South Carolina, and Tennessee) have no state minimum wage law, meaning the federal rate of $7.25 applies.

How does the tipped minimum wage work?

For tipped employees (those who regularly receive more than $30 per month in tips):

• The employer must pay a direct cash wage of at least $2.13 per hour
• The employee's tips must bring total compensation to at least $7.25 per hour
• If tips do not reach the federal minimum, the employer must make up the difference
• Some states require employers to pay the full minimum wage before tips (California, Oregon, Washington, Minnesota, Montana, Nevada, Alaska)

What about salaried employees?

The FLSA minimum wage applies to hours worked. For non-exempt salaried employees, the salary divided by hours worked must equal at least the applicable minimum wage. For example, a non-exempt employee earning $400 per week cannot be required to work more than 55 hours without the effective hourly rate dropping below $7.25.

Exempt salaried employees (those meeting the executive, administrative, or professional exemptions) must earn at least $844 per week ($43,888 per year) as of July 2024.

What are the penalties for minimum wage violations?

Employers who violate FLSA minimum wage provisions face:

• Back wages: Full amount of underpayment owed to affected employees
• Liquidated damages: An equal additional amount (effectively doubling the back wages)
• Civil penalties: Up to $2,451 per violation for repeated or wilful violations
• Criminal penalties: Fines up to $10,000 and up to 6 months imprisonment for wilful violations

How Grove HR Helps

Grove HR maintains a database of federal, state, and local minimum wage rates and automatically flags when an employee's effective hourly rate falls below the applicable threshold. The system accounts for tip credits, tracks youth sub-minimum wage eligibility windows, and alerts HR to upcoming rate changes.