Identification

• The federal minimum wage law is the lowest wage per hour an employer can pay an employee in select industry and employee categories. The Wage and Hour Division of the United States Department of Labor administers basic wage standards, oversees compliance, and investigates alleged violations. The federal minimum wage, as set in July 2009, is $7.25 per hour. In addition, this law regulates the payment of overtime wages currently set at one and one-half times the regular hourly wage, for covered employees.
  
  

Inclusions

• The term "covered enterprise" defines industry inclusion in federal minimum wage laws. A covered enterprise is one that engages in interstate commerce, produces goods for interstate commerce, or involves itself with a covered enterprise. In addition, the law includes businesses with gross sales in excess of $500,000 per year, hospitals, educational institutions and public agencies. In some cases, the law also covers domestic service workers such as full-time baby sitters, housekeepers and cooks, if wages exceed $1,500 per year or their normal workweek is at least eight hours.
  
  

Exemptions

• While the federal minimum wage law is broad and covers approximately 130 million workers, it does exclude, or exempt certain industries and worker categories from minimum wage and/or overtime pay requirements. Industries and worker categories exempt from federal minimum wage laws include executive, administrative, professional employees, outside sales employees and employees in some computer-related occupations, such as systems analysts, programmers, and software engineers. There are however, conditions a business must meet in order to claim exemption from law requirements. In addition, "casual" baby sitters, companion workers, seasonal help and farm employees are exempt.
  
  

Compliance

• There are no specific reporting requirements to ensure compliance with federal minimum wage laws, but employers must maintain employment records for a minimum of three years and make them available for inspection at any time. Noncompliance violations can result in penalties, sanctions and criminal prosecution. In addition to requiring the violator to reimburse employees for back wages, "willful violators" can face criminal prosecution, fines of up to $10,000 and civil penalties of up to $1,100 per violation.
  
  

Considerations

• Most states have their own minimum wage laws, and in cases where the state minimum wage requirements exceed federal minimum wage requirements, the higher of the two is the standard. As of January 1, 2010, only five states have no minimum wage laws. An additional five states have minimum wage laws lower than federal standards, while all remaining states have minimum wage laws that either meet or exceed federal law standards.