When applying for or starting a new job, you will likely see lots of new terms and definitions associated with it. One of them will definitely be minimum wage, especially if you want to work a part-time or seasonal job. In this article, we'll help you understand how minimum wage works! 

What is minimum wage?

In the U.S., minimum wage is the lowest hourly wage an employer can legally pay an employee. The federal minimum wage can be increased, but has remained the same since 2009.

Federal minimum wage vs. state minimum wages

As of 2025, the federal minimum wage in the U.S. is $7.25 per hour. However, it's important to know that while a federal minimum wage exists, 45 states in the U.S. have their own minimum wage laws. Cities and counties may have their own minimum wage laws as well. These laws allow them to make the minimum wage in their state lower, equal to, or higher than the federal minimum wage. How this works:

• If a state has no minimum wage law, the federal wage is what employees in that state will earn.
• If a state has a lower minimum wage than the federal, workers who are covered by the Fair Labor Standards Act (FLSA) will earn the federal minimum wage. If workers aren't covered by FLSA, they will earn their state's minimum wage.
• If a state has a higher minimum wage than the federal, employees will earn their state's minimum wage. (For example, an employee in California would earn the state's $16.50 hourly wage rather than the $7.25 federal minimum wage.)

Source: Debt.org

Minimum wage for employees earning tips

There is a separate minimum wage set by the federal government if tips make up a substantial portion of a worker's paycheck (for example, if they are wait staff at a restaurant). The current federal “tipped minimum wage” is $2.13 per hour, meaning no matter how many tips an employee makes in a shift, they must be paid at least $2.13 per hour by their employer. Similar to standard minimum wage, each state, in addition to cities and counties, can set their own minimum wage laws for employees earning tips.

Learn the minimum wage in your state 

Click on the map below to be taken to an interactive graphic of each state’s minimum wage and tipped minimum wage!

Have any questions about the minimum wage or jobs? Text #Jobs to 33-55-77 to chat with one of our advisors. If you're using a mobile device, click here to have the text message set up for you!