Minimum wage refers to the lowest hourly pay that employers are legally allowed to provide eligible employees. This rate is established by the federal government, although individual states and local governments can set higher minimum wage rates. When state or local laws mandate a higher rate than the federal minimum, the higher rate must be followed.
Understanding Minimum Wage Laws
While the federal minimum wage sets a national baseline, many states have implemented their own wage requirements to reflect local economic conditions. In some areas, counties and cities go even further by establishing their own wage thresholds that exceed both state and federal levels.
Minimum wage laws are designed to ensure that workers receive fair compensation and are protected from exploitation. The federal rate is reviewed periodically to determine whether adjustments are needed to support a reasonable standard of living and safeguard workers’ health and economic security.
Current Federal Minimum Wage
As of January 2025, the federally mandated minimum wage in the United States remains $7.25 per hour. However, in many parts of the country, higher local or state minimums are already in effect.
How Beyond Can Help with Wage Compliance
With varying minimum wage laws across different jurisdictions, businesses often need help staying compliant. Payroll platforms like Beyond make it easier for employers to stay up to date with changing wage requirements by automatically applying the correct rates based on location and employee classification. This ensures legal compliance and reduces administrative burden for HR and payroll teams.