Current Federal Minimum Wage 2026: $7.25/hr Explained

Current federal minimum wage is a common search query, but the answer requires context. While the federal rate is $7.25/hr, most American workers are actually covered by a higher state or local minimum wage. The federal rate serves as a floor — no covered worker can be paid less than $7.25/hr, but many are entitled to more under state law.

What Is the Current Federal Minimum Wage?

$7.25 per hour. This rate was established by the Fair Minimum Wage Act of 2007, which amended the Fair Labor Standards Act (FLSA) to phase the rate from $5.15/hr to $7.25/hr in three steps: $5.85/hr on July 24, 2007, $6.55/hr on July 24, 2008, and $7.25/hr on July 24, 2009. No increase has been enacted since.

The federal minimum wage is codified at 29 U.S.C. § 206(a)(1), which states: "Every employer shall pay to each of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, wages at the following rates..." followed by the current rate of $7.25/hr.

Who Is Covered by the Federal Minimum Wage?

The FLSA covers most private-sector employees and federal, state, and local government workers. Specifically, the law applies to:

• Employees of enterprises with annual gross volume of sales or business done of at least $500,000
• Employees of hospitals, residential care facilities, schools, and government agencies (regardless of revenue)
• Individual workers engaged in interstate commerce or producing goods for interstate commerce

The US Department of Labor's Wage and Hour Division estimates that approximately 143 million workers are covered by the FLSA.

Coverage works two ways. Enterprise coverage applies to an entire business once it meets the $500,000 annual revenue threshold — every employee at that business is covered, regardless of what individual tasks they perform. Individual coverage can apply even at smaller businesses if a specific employee is personally engaged in interstate commerce — for example, processing out-of-state credit card transactions, handling mail sent across state lines, or making calls to customers in other states. In practice, individual coverage means very few workers fall outside the FLSA entirely, even at small local businesses that never reach the enterprise revenue threshold.

Who Is Exempt from the Federal Minimum Wage?

Several categories of workers are exempt from the federal minimum wage under the FLSA:

• Executive, administrative, and professional employees who meet the salary basis and duties tests
• Certain seasonal and recreational employees
• Certain farm workers on small farms
• Casual babysitters and companions for the elderly or infirm
• Certain newspaper delivery workers
• Workers with disabilities under special certificates (subminimum wage)
• Full-time students in certain circumstances (85% of minimum wage)
• Youth under 20 during their first 90 days of employment ($4.25/hr youth minimum wage)

Federal Tipped Minimum Wage

The federal tipped minimum wage is $2.13 per hour. Employers may claim a tip credit of up to $5.12/hr toward the $7.25 full minimum wage. If an employee's tips do not bring them to $7.25/hr in any workweek, the employer must pay the difference. This is the rate used in 16 states that have not set a higher tipped minimum wage.

Those 16 states are Alabama, Georgia, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Nebraska, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Utah, Virginia, and Wyoming. Notably, two of them — Nebraska ($15.00/hr) and Virginia ($12.77/hr) — have raised their standard minimum wage well above the federal rate while still leaving the tipped cash wage at the federal $2.13/hr floor, since a state's base minimum wage and its tip-credit rules are set independently of each other. The other 14 states on that list are also among the states still paying the $7.25 base rate.

A Worked Example: What $7.25 an Hour Actually Pays

For a worker paid exactly $7.25/hr, the math is straightforward, but it helps to see it laid out for a typical pay period. A full-time employee working 40 hours a week at $7.25/hr earns:

• $290.00 per week (40 hrs × $7.25)
• $580.00 per biweekly pay period (80 hrs)
• Roughly $1,256.67 per month (a 2,080-hour work year ÷ 12)
• $15,080.00 per year (2,080 hrs × $7.25), before taxes and any deductions

That annual figure, $15,080, is a frequent reference point in the ongoing debate over whether the current federal minimum wage should be raised — a debate we cover in more detail in our analysis of federal minimum wage increase prospects.

For tipped workers, the math works differently because of the tip credit. Consider a server who works 30 hours in a week and is paid the federal tipped cash wage of $2.13/hr: direct wages come to $63.90 for the week. If that server earns $140 in tips over the same 30 hours, total pay is $203.90. But the FLSA requires tipped workers to earn at least $7.25/hr overall, which works out to $217.50 for 30 hours. Since $203.90 falls short of $217.50, the employer is legally required to pay the $13.60 difference. That "make-up" obligation is what keeps the $2.13 tipped rate functioning as a floor rather than the actual minimum a tipped worker can be paid.

Which States Still Pay Only the Federal Minimum Wage?

As of 2026, 20 states set their minimum wage at exactly $7.25/hr, the same as the federal rate, either because they have no state minimum wage law of their own or because their state law simply defaults to the federal rate. Those states are: Alabama, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, New Hampshire, North Carolina, North Dakota, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Wisconsin, and Wyoming.

Most of these states also have local preemption laws that bar cities and counties from setting their own, higher minimum wage, even where the local cost of living runs well above the state average. Texas law, for example, blocks Dallas, Houston, Austin, and San Antonio from setting local minimum wages above the state/federal floor, and Pennsylvania preempts Philadelphia and Pittsburgh the same way. In Kentucky, a 2016 state supreme court ruling struck down local minimum wage ordinances in Louisville and Lexington, holding that the state already occupies that legal field. A handful of the 20 states — Idaho, Iowa, New Hampshire, Pennsylvania, and Wisconsin — do set a tipped minimum wage slightly above the federal $2.13/hr floor even though their standard minimum wage matches the federal rate exactly.

How the Federal Rate Interacts with State Rates

When a state has a higher minimum wage than the federal rate, the higher state rate applies. This is the principle of "the higher standard prevails." For workers in the 30 states and DC with rates above $7.25/hr, the federal rate is essentially irrelevant — their state rate is the one that matters. For workers in the 20 states at $7.25/hr, the federal rate is the only legal floor.

How the Federal Minimum Wage Is Enforced

The US Department of Labor's Wage and Hour Division (WHD) is responsible for enforcing the federal minimum wage and investigating complaints. Workers who believe they've been paid less than $7.25/hr — or less than the required total for tipped employees — can file a complaint with WHD at no cost, and complaints can be filed without WHD disclosing the worker's identity to their employer. There are three main ways to start a complaint:

• Online through the WHD website
• By phone through the WHD helpline, 1-866-4-USWAGE (1-866-487-9243)
• In person at a local WHD district office

Once a complaint is filed, WHD investigators can review payroll records, interview employees, and calculate any back wages owed. Employers found in violation can be required to pay the difference between what workers actually received and what the FLSA requires. Workers also have a private right of action under the FLSA and can sue directly for unpaid wages plus an equal amount in liquidated damages, effectively doubling the recovery, with courts able to award attorneys' fees on top of that. It is illegal for an employer to fire, demote, cut hours, or otherwise retaliate against an employee for filing a wage complaint or cooperating with a WHD investigation; retaliation is treated as a separate FLSA violation in its own right.

Frequently Asked Questions

Does the current federal minimum wage increase automatically with inflation?

No. Unlike some state minimum wages that are indexed to inflation or tied to a cost-of-living formula, the federal minimum wage only changes when Congress passes new legislation and the President signs it into law. That's why $7.25/hr has remained unchanged since July 24, 2009 — the longest stretch without an increase in the history of the federal minimum wage.

What happens if a state's minimum wage law sets a rate below $7.25/hr?

The higher rate always wins for covered employees. Georgia is the clearest example: state law technically sets a minimum wage of $5.15/hr, but because the federal FLSA covers the vast majority of Georgia employers, the federal $7.25/hr rate overrides the state figure in practice. Outdated, low state-law minimums like this are functionally moot wherever federal law also applies, since federal law sets the real floor for covered employers.

Can my employer pay me less than $7.25/hr if I receive tips?

Only under the tip credit rules, and only down to $2.13/hr in cash wages — never lower. Employers using the tip credit must still guarantee that cash wages plus tips add up to at least $7.25/hr for every hour worked; if tips fall short in any workweek, the employer owes the difference. Employers must also notify tipped employees of the tip credit rules in advance, and employees generally must keep all their own tips, aside from valid tip-pooling arrangements among employees who customarily receive tips.

Is the youth minimum wage the same as the standard federal minimum wage?

No. The FLSA allows employers to pay a youth minimum wage of $4.25/hr to employees under age 20, but only during their first 90 consecutive calendar days of employment with that employer. After 90 days, or once the employee turns 20, whichever comes first, the employer must pay at least the standard $7.25/hr federal minimum, or the applicable state rate if it's higher.

Does the federal minimum wage apply to salaried employees?

It applies only to salaried employees who don't qualify for the FLSA's "white collar" exemptions. Executive, administrative, and professional employees are exempt from minimum wage and overtime requirements if they're paid on a salary basis of at least $684/week ($35,568/year) and their job duties meet the applicable duties test. A salaried employee who doesn't meet both the salary and duties tests is still entitled to at least $7.25/hr for every hour actually worked, calculated by dividing salary by hours worked.

How do I file a complaint if I think I'm being paid below minimum wage?

Contact the Department of Labor's Wage and Hour Division online, by calling 1-866-4-USWAGE (1-866-487-9243), or by visiting a local WHD district office. Complaints are free to file, and federal law prohibits employers from retaliating against workers who file a complaint or participate in a WHD investigation.

Related: Federal Minimum Wage Increase Prospects · Federal Minimum Wage Timeline · Federal Minimum Wage Data Page