HR Management & Compliance

Minimum Wage Provisions—and Exemptions—under the FLSA

In this article series, we provide a refresher on the basics of the Fair Labor Standard Act’s (FLSA’s) requirements.  In this article, we will review minimum wage provisions under the law. We’ll also explain the exemptions from providing the minimum wage.

minimum wage

Federal Minimum Wage Requirements

The federal minimum wage is $7.25 per hour. The FLSA does not supersede any state or local laws that are more favorable to employees. Therefore, if a state has a minimum wage that is higher than the federal minimum, employers subject to the state minimum wage law are obligated to pay the higher rate to employees working in that state. Also, bear in mind that some municipalities have enacted “living wage” laws mandating even higher pay rates.

The minimum wage for federal contract workers is $10.15 per hour. Future adjustments for the minimum wage will annually be indexed to reflect changes in the Consumer Price Index. The minimum wage for contractors applies only to covered contracts and “contract-like instruments” that are the result of solicitations issued on or after January 1, 2015.

Applicable law: 29 U.S.C. § 206.

Exemptions from Minimum Wage

 Although the minimum wage component of FLSA compliance is generally pretty easy to apply, there are a few wrinkles which you may have to iron out:

 Teenagers. Employers may pay employees under the age of 20 an “opportunity wage” of $4.25 an hour for the first 90 days of the job. Employers may not displace employees for the purpose of hiring someone under 20 and paying them the lower rate. This provision is intended as an incentive to hire youth who have no job experience. Employers who take advantage of this limited exception to the FLSA should be sure they obtain proof of the employee’s age for their records.

Applicable law: 29 U.S.C. § 214.

Apprentices and learners. Special certificates may be issued allowing employment at wages below the minimum for apprentices, learners, and messengers.

Applicable law: 29 U.S.C. § 214.

Workers with disabilities under special certificates. Individuals with a mental or physical disability may be paid a subminimum wage pending receipt of a certificate from the Secretary of Labor.

 Applicable law: 29 U.S.C. § 214.

In our next article, we’ll cover how minimum wage provisions apply to tipped employees and piece-rate workers.