Federal Minimum Wage in 2026: The $7.25 Floor (Unchanged Since 2009)

The federal minimum wage is $7.25/hour, unchanged since July 24, 2009, under §6 of the Fair Labor Standards Act. A majority of states and DC have set higher rates, ranging from $8.75 (West Virginia) up through DC's $17.95 (through June 30, 2026) and $18.40 (effective July 1, 2026) per the DOL state minimum-wage map. The federal $7.25 floor is the longest freeze since the FLSA was enacted in 1938. About twenty states either match the federal floor, have no state minimum, or have a lower state rate preempted by federal law.

The federal tipped cash wage of $2.13 has been frozen even longer (since 1991), and $7.25's purchasing power has fallen by roughly a third since 2009 per the BLS CPI inflation calculator. A wage clears federal law only when cash plus any tip credit minus any lawful subminimum meets the highest applicable floor for every hour in the workweek. That last clause does most of the enforcement work.

A wage statement satisfies federal and state law when it includes:

• Federal $7.25/hour floor under FLSA §6, unchanged since July 24, 2009
• Higher state, county, or city: the higher of four controls under 29 USC §218(a)
• Tipped cash wage and tip-credit math under FLSA §3(m): $2.13 floor, $5.12 max credit
• §6(g) youth opportunity wage of $4.25/hour for workers under 20 in their first 90 days
• §14(c) certificate wage for workers with disabilities, where still in force
• White-collar exemption salary of $684/week ($35,568/year) under 29 CFR Part 541
• Workweek-by-workweek reconciliation tying hours to cash + tips + any credit

State rates change every January (several again in July), so verify the worksite floor against the agency page before the first pay period. For a state-by-state walkthrough layering SDI, PFL, and city wage taxes, see free paycheck calculator by state; to model take-home before accepting an offer, use the MyStubs paycheck calculator.

#Why $7.25 Still Controls in 2026

The 2007 amendment stepped $5.15 to $7.25 by July 24, 2009. 29 USC §218(a) preserves every state's right to set higher. Federal is the floor, never the ceiling. Coverage turns on two tests under DOL Fact Sheet 14: enterprise (employers with $500,000+ annual sales, plus hospitals, schools, government) and individual (employees personally engaged in interstate commerce).

#Document-by-Document Breakdown

Each numbered scenario pairs the controlling citation with a worked-dollar table tied to one threaded character: Naomi Patel, a 22-year-old bakery-counter worker in Sacramento, California, paid the full $16.90 California minimum. Each scenario asks the same arithmetic question for Naomi. What would the law require if the same job moved across a state line or into a sub-floor carve-out? The threaded reconciliation runs across all seven scenarios so a reader can see, in one consistent set of numbers, how every FLSA rule reshapes the same 40-hour week.

#1. Standard FLSA Non-Exempt Wage — Naomi at the California Floor

The default rule under FLSA §6: cash per hour must reach $7.25 federal or a higher state/county/city minimum. California's full $16.90 controls in Sacramento, so Naomi's employer applies the state floor and the federal §6 line never binds.

Applies to:

• W-2 hourly employees at enterprises with $500,000+ annual sales
• Employees whose duties involve interstate commerce regardless of employer size
• Hospitals, schools, government, and nursing homes (covered without the $500,000 test)
• Non-exempt salaried employees below §13(a)(1) duties and salary tests

Naomi's $35,152 gross sits above the 2026 HHS Poverty Guidelines household-of-two threshold of $21,150. The reconciliation question that drives every scenario below: how much of that headroom does Naomi keep if the rule, the state line, or the carve-out changes?

#2. Tipped Employee With Tip Credit — Naomi if the Same Job Moved to Cleveland

California bars any tip credit under Labor Code §351, so Naomi's actual job pays cash $16.90 regardless of tips. The relocation scenario: if the same 40-hour bakery-counter job (now with measurable tip income) moved to Cleveland, Ohio, FLSA §3(m) would permit a $2.13 federal cash wage and Ohio's 2026 cash tipped wage of $5.50/hour per the Ohio Department of Commerce 2026 minimum-wage poster, provided cash plus tips reaches Ohio's full $11.00 floor over the workweek.

Applies to:

• Bartenders, servers, baristas, bellhops customarily receiving over $30/month in tips
• Workers in the 43 states that still allow some form of tip credit
• Employees who received written §3(m) notice before the credit was claimed

If tips fell to $180 in a slow week, ($220 + $180) ÷ 40 = $10.00/hour, below the Ohio floor of $11.00. The employer would owe a $40 make-up.

#3. Tip Pool Reconciliation — The House Distribution Rule

Naomi's individual tip-credit math (in the Ohio relocation) clears the floor for her. Once the house pools tips across front-of-house staff, a second rule decides who can take from it. The 2018 amendment to FLSA §3(m) bars employers, managers, and supervisors from any tip pool. DOL FAB 2019-2 and 29 CFR §531.54 require pooled tips to flow only to customarily-tipped employees, distributed by the regular payday.

Applies to:

• Restaurants and bars operating front-of-house tip pools
• Hotels distributing tips among bell, valet, concierge staff
• Salons pooling tips among stylists
• Any workplace collecting tips centrally for redistribution

A supervisor pocketing $50 triggers full credit-amount restitution to every employee who claimed a tip credit that week plus §216 liquidated damages.

#4. State Minimum Wage Override — Naomi if Relocated to Tennessee

Scenarios 2 and 3 ran the relocation against Ohio's tipped framework. The harshest relocation is to a no-state-law jurisdiction. Tennessee has no state minimum, so the federal $7.25 controls. If the same 40-hour bakery-counter job moved to Murfreesboro, the law would permit cash $7.25, less than half of Naomi's California rate.

Applies to:

• Workers in the 20 states without higher state minimums (federal $7.25 controls)
• Workers comparing actual wages against higher-ordinance cities (Seattle, Chicago, Denver, NYC)
• Tipped workers in the seven no-tip-credit states (CA, MN, MT, NV, OR, WA, AK)
• California fast food ($20) and healthcare ($25) per CA SB 525

The same 40 hours that earn Naomi $35,152 in Sacramento earn her $15,080 in Murfreesboro. That's a $20,072 annual differential created entirely by the state line. The $15,080 figure sits below the 2026 HHS poverty threshold for a household of two ($21,150).

#5. Youth Subminimum (FLSA §6(g)) — If Naomi Were 18 and New

The first four scenarios apply the full applicable floor; three FLSA carve-outs sit below it. The first is for new young workers. FLSA §6(g) permits $4.25/hour for workers under 20 during the first 90 consecutive days; the full minimum kicks in on day 91 or when the worker turns 20. Employers can't displace existing workers to claim it. CA, CT, MN, and NM bar or restrict it.

Applies to:

• Workers under 20 in their first 90 consecutive calendar days
• States that have not legislated above the federal §6(g) rate
• Roles where the rate would not displace an existing worker over 20

Under-16 workers can't use §6(g) and are capped at three hours per school day under DOL Fact Sheet 43.

#6. FLSA §14(c) Certificate Wages — How the Carve-Out Would Apply

The §6(g) youth wage applies to age; the second sub-floor carve-out applies to documented productivity. FLSA §14(c) authorizes a special-minimum-wage certificate when a disability "impairs earning or productive capacity for the work performed." Fourteen states (CA, MD, NH, OR, WA, AK, CO, HI, ME, TX, VA, SC, TN, VT) have phased it out or restricted it. California's AB 1147 ended new certificates, so this carve-out wouldn't apply to Naomi at her actual Sacramento worksite.

Applies to:

• Workers with disabilities at a Community Rehabilitation Program with an active §14(c) certificate
• Wages tied to a prevailing-wage time study within the prior year
• States that have not phased out §14(c)

For most CA workers, Naomi included, §14(c) is structurally unavailable. The carve-out is included here because the certificate is still in force in 36 states.

#7. Trainee / Opportunity Wage — Naomi as a Failed-Prong Intern

The third and final sub-floor carve-out, used most often for interns and student-learners, turns on whether the work is primarily for the worker's benefit or the employer's. DOL Fact Sheet 71 applies the primary-beneficiary test to unpaid internships. Trainees must clear all seven prongs or are owed the full minimum and overtime. A §14(b) certificate allows 85% of the minimum in retail/service (75% in agriculture) for full-time-student-learners.

Applies to:

• Unpaid interns who must clear all seven primary-beneficiary prongs
• Full-time-student-learners with a §14(b) certificate in retail/service or agriculture
• Vocational-education trainees in a recognized program

If Naomi had taken the same bakery role as an unpaid four-week internship instead of paid employment, and the placement failed two of the seven primary-beneficiary prongs (displacement and expectation of pay), the back-wages math runs only against the jurisdiction where the work occurred. CA controls because that's where Naomi actually works. The federal-floor row is presented separately, not double-counted into a "total federal exposure" figure:

The federal $7.25 figure ($1,160 back + $1,160 liquidated = $2,320) is presented for comparison only against the Tennessee relocation scenario, not stacked onto the California exposure.

#What Counts as a Wage Under the FLSA

Pay categories sit inside or outside the §6 calculation depending on how the stub characterizes them. Misclassifying any is a common source of §216 liability.

The "regular rate" driving overtime under FLSA §7 sweeps in every pay type counted as wage above, so a non-discretionary quarterly bonus can retroactively trigger overtime back wages. That last detail blindsides plenty of small-business owners.

#How to Calculate Whether a Stub Clears the Floor

Five methods cover almost every U.S. workweek. Run the matching method for each workweek separately. Never blend to "average up" a shortfall.

The floor applies workweek by workweek. A worker earning $300 one week and $200 the next didn't "average $7.50/hour" if the second fell below floor. Tool, uniform, or shortage deductions can't reduce the effective rate below the minimum, even with written consent.

#Naomi's Three-State Wage Reconciliation

The same 40-hour week as Naomi's actual Sacramento job, replayed across the relocation scenarios above. One worker, one job, one set of hours, three different state floors:

Same 40 hours, same FLSA, three different floors. The law is the higher of, never the lower. The line-by-line stub walkthrough is in what should appear on a paystub; the gross-to-net walk in gross-to-net pay calculator.

#Purchasing Power of the Federal Floor Since 2009

Run $7.25 from July 2009 to May 2026 through the BLS CPI inflation calculator and it returns ~$10.84 per the CPI-U series. The federal floor has lost roughly a third of its purchasing power.

The federal floor was 3% above the 2009 two-person HHS poverty guideline; 29% below it in 2026. The HHS Poverty Guidelines are the authoritative federal benchmark for "poverty line" — published annually by the HHS Office of the Assistant Secretary for Planning and Evaluation, not the Census American Housing Survey (which measures housing characteristics, not income thresholds).

#State Minimum Wage Rates for 2026

Employees get the higher of federal, state, or local minimum at the worksite. The table covers all fifty states, DC, and US territories at January 2026 rates, anchored against the DOL state minimum-wage map and cross-checked against the NCSL state-minimum-wage tracker.

How to read this table:

• 2026 minimum: the full hourly rate that applies to a non-tipped worker as of January 1, 2026 (some states step up again in July)
• Tipped cash wage: the minimum cash component an employer can pay if claiming a tip credit. Cash plus tips must still reach the full state floor
• Notes: indexation rule, small-employer carve-outs, the major city ordinances that override the state floor, and dates of any mid-year step-up
• States listed as "Matches federal" or "No state law" are jurisdictions where the federal $7.25 controls

Cities above state include Seattle ($20.76), Tukwila ($21.10), West Hollywood ($19.65), Mountain View ($19.20); the Economic Policy Institute tracker carries layered municipal numbers. State sources for the big four: California DIR, New York DOL, Washington L&I, with USDA farm labor for ag exemptions.

#Common Mistakes That Cost Workers Wages

Red flags auditors catch:

• Cash tipped wage below the state floor (not the federal $2.13)
• Tip credit claimed without the written §3(m) notice
• Tip pool including a manager, supervisor, or owner
• Workweek averaging across two weeks to cover a short week
• Deductions dropping the effective rate below floor
• §6(g) youth wage paid past day 90 or after the worker turns 20
• §14(c) certificate wage paid without an active certificate
• Unpaid internship failing any of the seven primary-beneficiary prongs
• "Exempt" classification at a salary below $684/week, or one that fails the duties test

Honest mistakes that still trigger DOL recovery:

• Misclassifying a non-exempt salaried worker as exempt under §13(a)(1)
• Treating service charges as tips (they're wages)
• Forgetting non-discretionary bonuses sweep into the regular rate for OT
• Failing to credit on-call time or short rest breaks (under 20 min) as paid
• Letting a worker "volunteer" for unpaid prep, cleanup, or training time
• Paying federal $7.25 where the state floor is higher
• Missing a January 1 state-rate update that pushed the floor above last quarter

The fix is the same: a workweek-by-workweek reconciliation tying cash plus tips plus any credit to the highest applicable floor, retained three years per §11(c).

Copy, paste, and fill the brackets when a stub doesn't clear the applicable minimum, when a tip credit was claimed without notice, or when the youth or §14(c) rate was misapplied.

Naomi used this structure when, in a hypothetical Tennessee-relocation week, a uniform deduction pulled her effective rate from $7.25 to $7.05. That's a $0.20/hour shortfall on 40 hours, or $8 underpaid. Filed with the DOL WHD, the recovery is $8 back wages plus $8 liquidated damages and a written notice ordering the employer to stop the deduction. Small numbers, but the principle is what enforces the floor.

#Example Packet by Worker Type

The packet a worker assembles to verify a stub or file a complaint depends on pay structure.

Before approving a payroll run or before filing a wage complaint:

Workers rebuilding a wage record after a job ends can reconstruct the same line items in order using the MyStubs paystub generator, populated from W-2 totals and the employer's stated pay schedule. The twelve data zones that should appear are walked through in what should appear on a paystub; for the gross-to-net walk converting any of these workweeks into take-home, see payroll tax vs income tax.

#Worker Rights Under the FLSA

The §6(g) youth, §14(c) certificate, and §14(b) trainee carve-outs all sit below the standard floor. The worker-rights framework that follows is what makes those carve-outs (and every other wage rule) recoverable when an employer misapplies them.

The DOL Wage and Hour Division recovers back wages on five recurring violations: misclassifying non-exempt as exempt, tipped employees without §3(m) notice, federal floor applied where a higher state or city rate controls, deductions cutting the effective rate below the applicable floor, and service charges treated as tips. §255 limits claims to two years (three for willful); §216 liquidated damages equal the back wages.

A worker has three independent paths to recovery. The first is a complaint to the DOL Wage and Hour Division. File online, by mail, or in person at the district office that covers the worksite; an investigator will request payroll records, interview the employer, and assess back wages and liquidated damages without the worker needing counsel. The second is the state labor agency (CA Labor Commissioner, NY DOL Division of Labor Standards, OH Bureau of Wage and Hour, equivalent in each state), which can recover state-floor differentials federal investigators cannot. The third is a private §216(b) lawsuit, often as a collective action, where attorney's fees are recoverable from the employer. Workers can pursue all three sequentially or simultaneously; the choice of forum affects which damages apply (state-law penalties often exceed federal liquidated damages).

Retaliation under §15(a)(3), including termination, schedule reduction, demotion, transfer, or threat of immigration consequences in response to a complaint, is independently actionable. The remedies include reinstatement, back pay, and front pay. The two-year statute on retaliation begins on the adverse-action date, not the underlying wage violation. Document everything contemporaneously: schedule prints, tip-declaration sheets, written instructions, and any communication referencing the complaint.

#Official External Sources