Topic of the Week Minimum Wage
Many states, and some cities, also have minimum wage laws. If state, city, and federal minimum wage laws apply, then the employee is entitled to whichever minimum wage is higher. In 2021, 20 U.S. states will have a minimum wage either equal to or below the federal minimum wage rate.
1. Can my employer pay me less for certain hours or average my pay?
While your employer may pay you different rates for different kinds of work, the pay rates cannot be averaged to meet your employer's minimum wage obligations. Hourly employees must be paid minimum wage for all hours worked. For example, your employer could not pay you $6.50 for certain hours worked, even if for the rest of the hours worked, you were paid $8.00 per hour, making your average rate of pay higher than $7.25 per hour.
2. I am paid a salary. Does the minimum wage law apply to me?
Yes (if you would otherwise be covered by the FLSA or equivalent state laws discussed above), which means that your average hourly earnings for the week must equal $7.25 or higher. This can be determined by dividing your salary by the number of hours that you work. An employer cannot create a salary rate that is so low that when you divide your weekly pay by the number of hours worked the resulting hourly pay is less than the minimum wage. For example, your employer could not pay you a salary of $275 per week for 40 hours of work, because your salary must be at least $290 to equal $7.25 per hour.
3. I am paid a commission. Does the minimum wage law apply to me?
Yes (if you would otherwise be covered by the FLSA or equivalent state laws discussed above), which means that your average hourly earnings for the week must equal $7.25 or higher. Commissions (whether based on a percentage of total sales or of sales in excess of a specified amount, or on some other formula) are payments for hours worked and must be included in the regular rate. An employer cannot create a commission standard that is so low that when you divide your weekly pay by the number of hours worked the resulting hourly pay is less than the minimum wage. If your pay including commission is below the minimum wage, then your employer is required to make up the difference. For example, if during a slow period, your commission averages only $5.00 per hour, then your employer must pay you an additional $2.25 per hour to make up the difference so that you receive the $7.25 minimum wage.
Thought of the Week
"This season, we have a crucial opportunity to build a broad base of support for ending the unjust subminimum wage for tipped workers. The House of Representatives has already passed the Raise the Wage Act, which will increase the federal minimum wage to $15 an hour and eliminate the subminimum-wage for tipped workers, young workers, and workers with disabilities. With a change in presidential administration and a new Senate majority, this legislation could be passed and signed as soon as this year."
Weekly Comic by Jerry King
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from U.S. Bureau of Labor Statistics
Characteristics of minimum wage workers, 2019
- In 2019, 82.3 million workers age 16 and older in the United States were paid at hourly rates, representing 58.1 percent of all wage and salary workers.
- Among those paid by the hour, 392,000 workers earned exactly the prevailing federal minimum wage of $7.25 per hour.
- About 1.2 million had wages below the federal minimum.
- Together, these 1.6 million workers with wages at or below the federal minimum made up 1.9 percent of all hourly paid workers