Eric Gibbs
Founding partner of Gibbs Law Group LLP, Eric Gibbs has been selected for the peer-reviewed list of Best Lawyers every year since 2012.
Minimum Wage Law
Employees' Right to a Guaranteed Minimum Wage
The minimum wage, or “basic minimum rate,” is the lowest hourly wage which employers are legally allowed to pay most employees under the Fair Labor Standards Act (FLSA) or corresponding state or local law. The current federal minimum wage is $7.25 per hour; the minimum wage by state, county, and city varies. When the federal, state, and local minimum wage amounts are different, the employee is entitled to receive the highest rate.
If an employer fails to provide nonexempt employees with at least the minimum wage as required by the applicable federal, state, or local law, the employee is entitled to receive compensation for all hours worked at the applicable hourly rate.
Civil penalties may also be assessed against employers who fail to provide the basic minimum rate to their nonexempt employees. The penalty for failing to provide minimum wage in California can be as much as $200 per work for every pay period that minimum wage is not provided (typically, every two-week period).
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Typical Minimum Wage Violations
Off-the-Clock Work
An employer’s failure to properly account for all hours worked by an employee may violate minimum wage laws. For example, if an employee who is compensated at the minimum wage performs off-the-clock work for which they are not compensated, the employee’s hourly rate will fall below the legally required minimum when off-the-clock hours worked are taken into account.
Tips
Federal labor law permits certain employers to apply a tip credit toward their minimum wage obligations to employees. Claiming a tip credit legally allows employers to reduce the minimum cash wage to as low as $2.13 per hour, when the amount of tips and cash wages add up to at least the federal minimum wage of $7.25 per hour.
Tips laws vary from state to state, however. California Labor Code Section 351 prohibits employers from applying any tip credit toward their minimum wage obligation to employees. California tipped employees are entitled to receive the California minimum wage, in addition to any and all tips they may receive.
Business Expenses
Business expenses – such as the cost of gas for a company car, a uniform, or repairs for work equipment damaged by an employee – may not be deducted from a nonexempt employee’s compensation if the deduction will result in the employee receiving less than the basic minimum rate per hour.
Federal Minimum Wage Law
Federal minimum wage protections generally apply to employees who are nonexempt, a job classification determined by how much an employee is paid, how the employee is paid, and what kind of work the employee does.
In addition to exempt employees, exceptions to federal minimum wage laws may affect tipped workers, full-time students, young workers, student-learners, and workers with disabilities.
Tipped Employees in Hospitality Industries
As explained above, federal law permits employers to reduce an employee’s wages below minimum wage if the employee earns at least minimum wage when factoring in tips.
Full-Time Students
The FLSA permits employers in agriculture, service stores, or educational institutions that employ full-time students to obtain a certificate from the Department of Labor allowing the student to be paid 85% of the minimum wage ($6.16/hour). DOL certificates also limit the amount of hours a full-time student can work to 20 per week when school is in session and 40 per week when school is out of session.
Young Workers
Federal law allows employers to pay workers under 20 years of age a minimum wage of $4.25 per hour for their first 90 consecutive calendar days of their employment. The worker’s rate must be raised to the federal minimum wage rate after 90 days of employment or when the employee turns 20, whichever occurs first.
Student-Learners
Employers may also obtain a student-learner certificate from the federal Department of Labor in order to pay students at least 16 years old who are enrolled in vocational education at 75% of the federal minimum wage ($5.44/hour).
Workers with Disabilities
Employers may obtain a certificate from the federal Department of Labor to compensate workers with disabilities at a rate less than the minimum wage, if they can prove the disability impacts the worker’s ability to do the job and if they submit to recurrent testing of the employee’s skill level. The wage for workers with disabilities must also be commensurate, meaning proportional, to the person’s abilities and to the wages of people without disabilities.
Are you earning less than the minimum wage?
Frequently Asked Questions about Minimum Wage Law
- What is the current federal minimum wage?
The federal minimum wage for 2026 is $7.25. It has been the same since 2009, and no increases are currently scheduled. - Which state has the highest minimum wage in 2026?
The state of Washington has the highest minimum wage, at $17.13 per hour. - Which state has the lowest minimum wage in 2026?
States like Indiana, Iowa, and Kansas are tied for the lowest minimum wage at $7.25 per hour. - Why can a state have a minimum wage below the federal requirements?
The federal minimum wage ($7.25/hour) supersedes any state law providing a lower minimum wage. However, federal labor law exempts certain types of employees, including executives, administrators, salaried professionals, outside sales reps, computer programmers, and computer systems analysts. There may be situations where an employee is exempt from federal minimum wage, but qualifies for a lower state minimum wage. - Is minimum wage going up?
On a federal level, no, minimum wage is not going up. It has stayed the same since 2009. However, many state-level minimum wages are scheduled to increase (typically in January or July of each year). As of 2026, 19 states plus Washington D.C. have their minimum wages increase each year based on cost of living.
Featured Members of Our Employment Law Practice
Steven Tindall
An employment-law litigator with over 20 years’ experience, Steven Tindall is well-acquainted with the intricacies of overtime law. His largest recovery in a single employment case is $29 million.
Linda Lam
Prior to joining us at Gibbs Law Group LLP, Linda Lam worked at a national employment law firm, where she represented workers in lawsuits to recover unpaid wages and benefits.
Steve Lopez
Steve has prosecuted a variety of complex employment cases involving misclassification of independent contractors. He is fluent in English and Spanish.
Our Employment Law Practice
Gibbs Law Group LLP is consistently ranked on U.S. News’ list of “Best Law Firms.”
The attorneys in our employment law practice have all be selected as 2018 Northern California Super Lawyers or Risings Stars.
Paid less than minimum wage?
If you believe you’re being paid less than the minimum wage required by law in your region, you may be eligible to recover compensation at the proper rate. Contact us for a free case evaluation.