Minimum wage rates for 2025 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 hike since 2009, many states have their own wage laws that you must follow if you have employees or plan to hire in that location.

Offering competitive pay and a benefits package with various perks can help you attract and retain workers for the long haul. However, your first step as an employer is understanding U.S. minimum wage laws so you can comply with federal and state regulations.

In this blog post, you’ll learn:

• The differences between various wage types, including federal minimum wage, tipped wage, and subminimum wage.
• Key regulations and exceptions for minimum wage laws across U.S. states, including state-specific rates and upcoming changes.
• How to ensure compliance with wage laws while balancing fair compensation practices.

What is a minimum wage?

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

The Fair Labor Standards Act (FLSA) created the first minimum wage laws in 1938¹. These laws aimed to protect workers from exploitation and ensure a baseline level of fair compensation. They’ve also helped many employees earn incomes that exceed the federal poverty line.

Here are some quick facts about the history of minimum wage:

• The U.S. government has increased the minimum wage 23 times since its inception².
• The federal minimum wage rate rose three times between 2007 and 2009 to its current rate of $7.25 per hour³.
• Before 2007, the government hadn’t increased the rate since 1997.

Individual states can set their own minimum wage as long as it isn’t lower than the federal rate. Cities and counties within many states also set minimum wage requirements. In either case, employers must pay the higher amount where their company employs workers.

What is a living wage?

While often confused with minimum wage, a living wage is a salary an employee could live on comfortably once you factor in the average cost of living.

A few examples of what factors into costs of living include:

• Rent
• Transportation
• Taxes
• Grocery prices
• Inflation
• Fuel
• Child care

What is a tipped minimum wage?

If you’re an employer in an industry where your staff receives a large portion of their wages from tips, you can pay a tipped minimum wage. Like the standard minimum wage, many states, cities, and counties have their own tipped wage requirements that are higher than the federal rate.

Here’s how tipped minimum wage works:

• Under federal law, a tipped worker is someone who regularly receives more than $30 in tips each month.
• The government allows employers to pay these workers a minimum base wage of $2.13 per hour⁴.
  • Suppose an employee’s total tips plus their $2.13 per hour wage rate doesn’t equal the federal minimum wage of $7.25. In that case, the employer must make up the difference.

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.

The following seven states don’t allow employers to use the tip credit system:

1. Alaska
2. California
3. Minnesota
4. Montana
5. Nevada
6. Oregon
7. Washingon

Employers in these states must pay the full tipped minimum wage regardless of an employee's tip earnings.

What is subminimum wage?

The FLSA allows employers to pay some employees an hourly wage lower than the federal minimum wage rate in certain circumstances. This is known as a subminimum wage. To do this compliantly, employers must hold the appropriate work certificate from the U.S. Wage and Hour Division.

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

1. Full-time students: Full-time students working in the retail, service, agriculture, or higher education industries must earn at least 85% of the federal minimum wage⁵.
   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: Technical or vocational school students must earn at least 75% of the federal minimum wage while actively participating in their learning program⁶.
3. Youth minimum wage: Also known as a training wage, employers may pay workers younger than 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.
   1. Employers can set an hourly rate based on the worker’s productivity in relation to their coworkers without disabilities⁹.

In 2020, the U.S. Commission on Civil Rights called to end subminimum wages for workers with disabilities due to a lack of wage regulation, the inability to access a living wage, and the exploitation of these individuals in the workplace.

While the practice is still allowed on a federal level, several states and cities prohibit subminimum wages for workers with disabilities.

Minimum wage rates for 2025 by state

Now that you understand the different types of minimum wages, the chart below will walk you through the 2025 minimum wage rates by state.

Twenty-two states have increased their minimum wages for 2025. 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 seven states, plus Washington D.C, had a minimum wage of at least $15 in 2024. 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.

Conclusion

Keeping up with minimum wage rates is an ever-changing challenge for U.S. employers. You may have to navigate minimum wage laws annually depending on your industry, company size, or location. 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.

This article was originally published on January 7, 2015. It was last updated on November 25, 2024.

1. FLSA

2. A History of the Federal Minimum Wage

3. Federal Minimum Wage Rate Raises

4. U.S. Department of Labor

5. Subminimum Wages for Full-Time Students

6. Subminimum Wages for Student Learners

7. Subminimum Wages for Youths

8. Subminimum Wages for Workers with Disabilities

9. Determining Wages for Workers with Disabilities

10. Montgomery County

11. Howard County

12. St. Paul Minimum Wage

13. Missouri minimum wage

14. Montana minimum wage

15. New Jersey minimum wage

16. New Mexico minimum wages

17. Ohio minimum wage

18. Oregon minimum wages