Everything You Need to Know About Minimum Wage


With all the conflicting stories in the news about minimum wage, it can be challenging to know which information is right. For example, maybe you have heard that the federal minimum is increasing to $15.00 per hour. This is not quite true yet. While some legislators have proposed this change, Congress has yet to pass the measure. Here is the most up-to-date information available at both federal and state levels.

It is important to note that employees are entitled to minimum wage, however this protection does not apply to independent contractors (like consultants, freelancers and gig workers).

What is the Current Federal Minimum Wage?

As of March 2021, minimum wage at the federal level stands at $7.25 per hour. This wage has been in place since 2008 when the federal government raised from $6.65 to $7.25 per hour for non-exempt employees. The hourly wage amounts to full-time wages of $290 per week or $15,080 per year for non-exempt employees. A non-exempt employee is one who receives payment by the hour and must receive overtime pay at one and one-half times the normal hourly rate when working more than 40 hours a week.

All but five states have set their own minimum wage, which means worker salary in the other 45 states defaults to the state level. The five states with no minimum wage laws include:

  • Alabama
  • Louisiana
  • Mississippi
  • South Carolina
  • Tennessee

The states of Georgia and Wyoming have a minimum wage lower than the federal standard at $5.15 per hour.

Will it Increase to $15.00 Per Hour?

Democrats in the Senate and House of Representatives are proposing a bill that would gradually increase minimum wage to $15.00 per hour by 2025. If passed, the Raise the Wage bill would go from $7.25 to $9.50 per hour by the end of this year with gradual increases in 2022, 2023, and 2024 until reaching $15.00 per hour by 2025.

After 2025, the proposed bill would increase the wage annually according to national media wage growth. Republican legislators tend to oppose such a large hike over concerns about adding more expenses for small business owners already struggling to stay afloat due to coronavirus shutdowns and other limitations.

Minimum Wage at the State Level

For calendar year 2021, 24 states plan to increase minimum wage. States giving a $1.00 per hour raise to these workers include:

  • Arkansas
  • California for both large and small employers
  • Connecticut
  • Illinois
  • New Jersey

New Mexico tops the 24 states with a $1.50 wage increase from $9.00 to $10.50 per hour. Minnesota is offering the lowest wage increase at .06 per hour for small employers and .08 per hour for large employers. Most states fall on the more conservative side with their wage increases. Washington, D.C. currently has a $15.00 per hour minimum wage, the highest in the country.

About the Author: Lisa Kroulik has worked as a freelance content marketing writer for 10 years. She loves the work and the lifestyle it affords. Learn more about Lisa’s work and availability through Writer Access.

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