In 2021, the federal minimum wage is $7.25 per hour (or $2.13 for tipped workers), which was set back in 2009.
If your city or state minimum wage is higher than the federal minimum wage, you’ll need to pay your qualified workers the highest amount.
2021 minimum wage laws
For each state, we’ve included the minimum wages for the five largest cities, or the cities with independent minimum wages, if there are less than five.
Keep in mind that this is not an inclusive list of all city, county, and municipality minimum wages, and you may need to look into other legal considerations. Check whether local laws apply, as well as restrictions and conditions of the tipped minimum wage by state.
Q: What Is the Federal Minimum Wage?Finances and Taxes
|Region: State/County/City||Minimum wage||Minimum tipped wage|
|California||$13 if you have 25 or fewer employees; $14 if you have more than 25 employees||$13 if you have 25 or fewer employees; $14 if you have more than 25 employees|
|Los Angeles County||$15 as of July 1, 2021||$15 as of July 1, 2021|
|San Francisco||$16.32 as of July 1, 2021||$16.32 as of July 1, 2021|
|Connecticut||$12.00, increasing to $13 effective August 1, 2021||$6.38 for restaurant employees and $8.23 for bartenders|
|Florida||$8.65, jumping to $10.00 in September 2021||$5.63|
|Chicago||$15.00 for employers with 21 or more workers; $14.00 for employers with 4 to 20 workers||$8.40 for employers with 4 to 20 workers; $9.00 for employers with 21 or more workers|
|Montgomery County||$14 if you have 50 or fewer employees; $15 if you have more than 50 employees, as of July 1, 2021||$4|
|Minnesota||$8.21 if your gross revenue is less than $500,000; $10.08 if your gross revenue is more than $500,000||The tipped minimum wage is $8.21 if your gross revenue is less than $500,000; $10.08 if your gross revenue is more than $500,000|
|Minneapolis||$12.50 if you have 100 or fewer employees; $14.25 if you have more than 100 employees as of July 1, 2021||$12.50 if you have 100 or fewer employees; $14.25 if you have more than 100 employees as of July 1, 2021|
|Nevada||$8.75 if you offer health insurance; $9.75 if you don’t, effective July 1, 2021||$8.75 if you offer health insurance; $9.75 if you don’t, effective July 1, 2021|
|New York||$12.50||$14.50 for fast food employees; $8.35 for food service workers|
|Long Island and Westchester County||$14||$10|
|New York City||$15||$15 for fast food employees; $10 for food service workers|
|Ohio||$7.25 for employers with less than $305,000 in annual revenue; $8.80 for employers with more than $305,000||$4.40|
|Oregon||$12.75 effective July 1, 2021||$12.75|
|Portland Metro||$14.00 effective July 1, 2021||$14.00|
|Non-urban Oregon counties||$12.00 effective July 1, 2021||$12.00|
|South Dakota||$9.45||$4.725 (nope, that’s not a typo; tipped employees must be paid at least 50% of the minimum wage)|
|Seattle||$16.69 for employers with 500+ employees; $15.00 for smaller businesses that pay $1.69 per hour towards medical benefits||$16.69 for employers with 500+ employees or $15.00 for smaller businesses where the employee earns at least $1.69 per hour in tips|
Why are there different minimum wage laws within states?
Many elected officials agree that the minimum wage hasn’t kept up with inflation. But there’s an endless debate about how to actually solve the problem.
Here’s a quick breakdown of the pros and cons of raising the minimum wage:
|Proponents of a higher minimum wage believe it will…||Opponents of a higher minimum wage believe it will…|
|Stimulate job growth||Raise the price of goods|
|Improve income inequality||Increase unemployment|
|Decrease crime rates||Increase crime rates|
|Improve the national economy||Lead to outsourcing|
Obviously, reconciling these two opposing positions is a difficult policy problem. That’s why many cities and states have taken it upon themselves to raise their own minimum wages. And in response, some business owners are getting creative with how they’re handling minimum wage hikes.
Many localities are working toward a $15 per hour minimum wage, which equates to $31,200 per year based on a 40-hour week. The California minimum wage, for example, starts at $13, and may be higher depending on your city and number of employees.
Washington, D.C. has the highest minimum wage at $15. The lowest minimum wages are in Georgia and Wyoming, at $5.15 per hour—although most employers in those states will still need to pay the federal minimum wage.
What’s the difference between minimum wage and tipped wage?
The Fair Labor Standards Act (FLSA) sets the federal minimum wage at $7.25 per hour for “covered, nonexempt workers.” If you fall in at least one of the below categories, your employees are covered under this law:
- You have at least two employees.
- You employ domestic workers, like a housekeeper, cook, or nanny.
- Your business produces at least $500,000 in sales or services.
- Your business is a hospital, school, preschool, or government agency, or it provides medical or nursing care.
- Your business is involved in interstate commerce, such as selling products over state lines or working closely with people or companies in other states.
You may also have employees who are exempt from minimum wage laws. Depending on the work they do, they can even be exempt on some weeks and nonexempt on other weeks.
Below are some types of employees who might be exempt—although we recommend consulting with an employment lawyer first.
- Farmworkers who work on small farms
- Seasonal and recreational employees, if your company only operates for seven or fewer months each year, or if your average receipts for half of the previous calendar year were less than 33.33% of the average receipts for the other half of the year
- Salaried employees who work in executive, administrative, professional, and outside sales roles
There’s another big category of employees who don’t receive the minimum wage: tipped employees. The FLSA sets the minimum wage for servers and other tipped employees at $2.13, as long as the tips and the hourly wages combine to meet the federal minimum wage. Your employee must also earn an average of more than $30 a month in tips.
If the combination of tips and hourly wages don’t meet the federal minimum wage of $7.25 an hour, you’ll need to make up the difference.
Are there certain types of workers who don’t qualify for the minimum wage?
In certain circumstances, other employees may be exempt from the minimum wage. They include:
- Employees with disabilities that affect their earning capacity or work ability. These disabilities may include blindness, mental illness, developmental disabilities, and drug and alcohol addiction. In order to pay lower wages to these employees, you’ll need to apply for a certificate from the Wage and Hour Division of the U.S. Department of Labor (DOL).
- Full-time students who work in retail, service, or agriculture, or who work for a college or university. With a certificate from the DOL, you can pay students 85% (or more) of the minimum wage. However, students can work no more than eight hours in one day or 20 hours in a week during the school year, or 40 hours per week when school isn’t in session.
- Student learners currently enrolled in vocational education. These employees can be paid no less than 75% of the minimum wage.
- Employees under 20 years old, for the first 90 days they work for you. During those days—or once they hit their 20th birthday, whichever comes first—you may set their minimum wage as low as $4.25 per hour.
Should I follow federal, state, or local minimum wage laws?
You should know about all of them, but follow the one that’s the highest.
If your state has a minimum wage, your employees are always entitled to the higher wage or the law that offers the most benefits, whether that be federal or state.