Properly compensating employees
You have the responsibility to compensate your employees properly.
In general, you must pay your employees at least the Federal minimum wage ($7.25) for all hours worked regardless of whether they are paid by the hour, the day, or at a piece rate. Some states have set higher minimum wages. In those states, you must pay your workers at least the state minimum wage. For work performed on or in connection with Federal contracts, you must pay workers a higher minimum wage.
There are some exceptions:
- You may pay tipped employees a cash wage of not less than $2.13 per hour and claim a tip credit to satisfy the rest of the minimum wage obligation. However, if tips combined with cash wages do not equal the minimum wage, you must make up the difference.
- You may pay less than the minimum wage if an employee is under age 20 and in the first 90 calendar days of employment.
- You may pay less than the minimum wage, provided you obtain a certain certificate, to student learners enrolled in vocational education, full-time students in certain workplaces, or people whose earning or productive capacity is impaired by a disability.
You must pay employees for all hours worked in a workweek. In general, “hours worked” includes all time an employee must be on duty, or at the place of work. Normally, time spent in training, traveling from site to site during the day, and doing repair work must be paid.
Unless exempt, you must pay your employees overtime pay of at least 1.5 times their regular rate of pay after 40 hours of work in a seven-day workweek. There is no limit on the number of hours employees aged 16 and older may work in any workweek. Federal law doesn’t require overtime pay for work on Saturdays, Sundays, holidays, or regular days of rest, unless overtime hours are worked on such days.
Questions? We’re here to help.
We are committed to helping you understand your responsibilities as an employer. Many questions about pay may be answered by using the following elaws (Employment Laws Assistance for Workers and Small Businesses) Advisors:
- Fair Labor Standards Act (FLSA) Coverage and Employment Status Advisor
- Fair Labor Standards Act (FLSA) Hours Worked Advisor
- Fair Labor Standards Act (FLSA) Overtime Calculator Advisor
- Fair Labor Standards Act (FLSA) Overtime Security Advisor
- Fair Labor Standards Act (FLSA) Section 14(c) Advisor (Special Minimum Wage)
For additional assistance, please contact:
- The Wage and Hour Division (WHD) of the Labor Department: 1-866-4-US-WAGE (1-866-487-9243)
- Your state Labor Office
All discussions with us are free and confidential.Learn about WHD