Federal minimum wage has been frozen at $7.25/hour since July 2009 - the longest stretch without a federal increase in the law's history. State minimums range from $7.25 (most southern states) to $16.66 (Washington DC), $16.50 (California, mid-2024), $16.28 (Washington state). Many cities go higher: Seattle $19.97 for large employers, San Francisco $18.67, Tukwila $20.29, West Hollywood $19.61.

Where federal, state, and local rates differ, the highest applies. Some states preempt their cities from setting higher minimums (Texas, Tennessee, Arizona) - workers there get only the state minimum. Other states allow city-level rules to stand, which is why coastal urban areas have the highest US minimums.

Federal tipped minimum is $2.13/hour, with the assumption that tips will bring total compensation to at least the regular minimum ($7.25). Seven states (California, Oregon, Washington, Alaska, Minnesota, Montana, Nevada) eliminate the tipped minimum entirely - servers there earn full minimum wage with tips on top. New York and DC have phased systems that vary by industry.

The tipped wage gap is structurally significant: a server in California earns at least $16.50 + tips; a server in Texas earns $2.13 + tips with the requirement to top up to $7.25 only when tips don't reach that level. Tip pooling, tip credits, and reporting rules vary by state, creating substantial regional differences in restaurant economics.

Many state minimums now have automatic annual indexation tied to CPI: California, Florida, New York, Washington, Colorado, Arizona, Oregon, others. So they rise each January (or July, varies) without legislative action. Federal minimum has no indexation - it stays at $7.25 until Congress acts.

Cities increasingly index too. Seattle, San Francisco, Denver, Minneapolis all auto-adjust. Some indexed amounts have already crossed $20/hour for large employers in high-cost cities. The [US Hourly Wage Calculator](/us-hourly-wage-calculator) can help convert between hourly rates and equivalent annual salaries to compare offers.

Workers under 20 can be paid $4.25/hour for their first 90 days under federal law (state rules vary). Workers with disabilities can be paid less than minimum under FLSA Section 14(c) certificates - controversial and being phased out by many states. Tipped workers, agricultural workers, and salaried exempt workers have separate rules.

Independent contractors have no minimum wage protection - they negotiate rates as separate businesses. The DOL has tightened rules around contractor classification, particularly for gig workers. Misclassified workers (treated as contractors but functioning as employees) can recover back-wages including the difference up to minimum wage if litigated.