Federal Minimum Wage

The Federal Minimum Wage is the lowest hourly pay that employers must legally provide under the Fair Labor Standards Act (FLSA). As of 2025, the rate is $7.25 per hour, unchanged since 2009. This sets the baseline, but many states, local governments, and federal contractors may have higher mandated minimums.

Key Facts

• Established by the FLSA: It applies to most private-sector and government employees in businesses with annual sales of $500,000+ or engaged in interstate commerce.
• Current Rate: Federal minimum wage remains at $7.25/hr, set in 2009.
• No Automatic Adjustments: It's not linked to inflation and requires Congress to pass changes.
• State and Local Overrides: If a state, city, or country sets a higher minimum wage, employers must comply with the higher rate.
• Tipped Employees: Federal tipped employees can be paid as low as $2.13/hr, provided tips bring them to at least $7.25/hr.
• Youth and Special Exemptions: Workers under 20 may be paid a training wage ($4.25/hr). Special certificates allow exceptions for students, people with disabilities, and full-time learners.
• Federal Contractors: Contractors working for the federal government are required to pay at least $13.30/hr under EO13658. A rate increase to $17.75/hr was halted in early 2025.

1. What is the federal minimum wage?

It’s $7.25 per hour, the lowest legally allowed for covered workers under the FLSA.

2. When did it last increase?

The most recent change was effective July 24, 2009, raising the rate to $7.25/hr.

3. Are employers required to follow state or federal rates?

Employers must comply with the higher whichever is greater - federal, state, or local .

4. Can tipped employees be paid less?

Yes - as low as $2.13/hr, but only if tips bring their total to at least $7.25/hr.

Will the federal minimum wage increase soon?

Proposed legislation (such as the Raise the Wage Act) seeks to raise it to $17 by 2030, but it hasn’t passed yet.