Minimum wage rates for 2024 by state

If you’re an employer hiring for the first time, knowing the minimum wage rate in your state is crucial. Even though there hasn’t been a federal minimum wage increase since 2009, many states have set their own minimum wage laws in more recent years that you must follow if you have employees or plan to hire in that location. This can be incredibly challenging if you’re operating a remote company with employees in multiple states.

While you should consider competitive pay and a benefits package complete with various perks to attract and retain employees for the long haul, your first step is having a basic understanding of minimum wage laws across the country so you remain in compliance with federal and state laws.

In this article, we’ll walk you through the different types of minimum wages and provide an easy-to-follow chart of the 2024 minimum wage rates by state.

See how your small business can offer affordable and personalized employee benefits in our guide

What is minimum wage?

The minimum wage is the lowest amount of money an employer may pay a worker per hour to do a job. While often confused with a living wage, the federal government sets the minimum wage rate, and all U.S. employers must offer at least that amount.

In contrast, a living wage is a salary that an employee could live comfortably on considering the average cost of living, like rent, transportation, taxes, grocery prices, inflation, and more. Living wages generally vary based on location, while minimum wage doesn’t.

The first minimum wage laws came with the passing of The Fair Labor Standards Act (FLSA)¹ in 1938. These laws prevented employers from taking advantage of their workers and ensured an employee’s income wouldn’t put them below the federal poverty line.

The federal government has increased the minimum wage 23 times² since its inception. Most recently, the Fair Minimum Wage Act³ increased the minimum wage in three increments between 2007 and 2009 to its current rate of $7.25 per hour. Before 2007, the government hadn’t increased the rate since 1997.

The government allows individual states to set their own minimum wage as long as it isn’t lower than the federal rate. Cities and counties within many states can also dictate their own minimum wage requirements. In either case, employers must always pay the higher amount where their company resides or employ workers.

What is tipped minimum wage?

If you’re an employer that works in an industry where your employees receive a large portion of their wages from tips, you can be exempt from the federal rate and pay a tipped minimum wage.

Under federal law, a tipped worker is someone who regularly receives more than $30 in tips each month. In this case, the government allows employers to pay these workers a minimum base wage of $2.13 per hour. The employer must make up the difference if an employee’s total tips and $2.13 per hour wage rate don’t equal the federal minimum wage of $7.25.

Employers can credit employees' tips toward the minimum wage in many states. Under the FLSA, the maximum amount of tips an employer can credit toward the minimum wage calculation is $5.12 per hour. However, several states⁴ don’t allow employers to use the tip credit system. These employers must pay the full tipped minimum wage regardless of how much an employee makes in tips.

Like the standard minimum wage, several states, cities, and counties have their own tipped minimum wage requirements that are higher than the federal rate.

What is subminimum wage?

To provide greater work opportunities for certain individuals, the FLSA allows employers to pay some employees an hourly wage under the federal minimum wage rate in certain circumstances—also known as a subminimum wage. For employers to do this compliantly, they must hold the appropriate work certificate from the Wage and Hour Division of the U.S. government.

Under federal law, business owners that employ the following workers in these situations may pay a subminimum wage:

1. Full-time students: Full-time students working in the retail, service, agriculture, or higher education industries can’t receive a wage of less than 85% of the federal minimum wage. Individual states can set their own wages using these guidelines⁵.
   1. Students can’t work more than 20 hours per week during the school season. However, they can work eight hours per day.
2. Student learners: Student learners in a technical or vocational school can’t receive a wage of less than 75% of the federal minimum wage while they’re active in their learning program⁶.
3. Youth minimum wage: Also known as a training wage, employers may pay workers under age 20 an hourly wage of $4.25 until they complete a three-month probationary period. Afterward, employers must pay the federal rate⁷.
4. Workers with disabilities: Workers with certain disabilities may receive less than the federal minimum wage⁸. Employers determine disability based on the type of work performed. Still, it can include blindness, cerebral palsy, drug or alcohol addiction, mental illness, developmental disabilities, and impairment due to age or injury. Employers can set an hourly wage rate based on the worker’s productivity in relation to their coworkers without disabilities⁹.

While many states allow subminimum wages for students, learners, and minors, there have been recent efforts¹⁰ to end subminimum wages for workers with disabilities. The Commission on Civil Rights has voiced its opposition to the practice due to a lack of wage regulation, the inability to access a living wage, and the exploitation of these individuals in the workplace.

While this has yet to pass on a federal level, several states and cities prohibit subminimum wages for workers with disabilities.

Minimum wage rates for 2024 by state

Now that you understand the different types of minimum wages, the chart below will walk you through the 2024 minimum wage rates by state.

Over 20 states have increased their minimum wages for 2024. While most states change their rates to take effect on January 1, some states make changes at different times of the year, such as July 1 or September 30.

The following chart reflects the January 1 effective dates unless otherwise stated:

What are future projections for minimum wage rates?

Only three U.S. states had $15 minimum wage rates in 2023. But with inflation, rising healthcare costs, and increased living expenses nationwide, more states have scheduled increases.

Lawmakers in several states, cities, and counties have approved legislative bills increasing their area’s minimum wage rate in the coming years. Remember that a standard minimum wage increase may also raise these areas' tipped minimum wage rates.

Additionally, more states and cities are expected to revisit their policies regarding allowing subminimum wages for individuals with disabilities in the near future.

Conclusion

Keeping up with minimum wage rates is an ever-changing challenge for U.S. employers. Depending on your industry, company size, or where you employ workers, you may have to navigate complex wage laws annually. Therefore, you must keep an eye out during popular times of the year when state and local governments change their minimum wages so your business remains compliant.

Remember, employees value benefits and perks just as much as their salary. If you’re looking to supplement your compensation package with affordable and customized employee benefits, PeopleKeep can help.

Contact us today, and we’ll help you offer budget-friendly benefits your employees will love.

This article was originally published on January 7, 2015. It was last updated on December 14, 2023.

1. https://www.dol.gov/agencies/whd/flsa

2. https://www.epi.org/blog/a-history-of-the-federal-minimum-wage-85-years-later-the-minimum-wage-is-far-from-equitable/#:~:text=The%20real%20value%20of%20minimum%20wages%20has%20fluctuated%20over%20time

3. https://webapps.dol.gov/elaws/faq/esa/flsa/001.htm

4. https://www.dol.gov/agencies/whd/state/minimum-wage/tipped

5. https://www.dol.gov/agencies/whd/forms/wh200-wh201-wh202

6. https://www.dol.gov/agencies/whd/forms/wh205

7. https://www.dol.gov/agencies/whd/fact-sheets/32-minimum-wage-youth

8. https://www.dol.gov/agencies/whd/fact-sheets/39-14c-subminimum-wage

9. https://www.dol.gov/agencies/whd/fact-sheets/39e-14c-hourly-wages

10. https://www.usccr.gov/reports/2020/subminimum-wages-impacts-civil-rights-people-disabilities