Federal & State Minimum Wage Tracker

Current rates, tip credits, scheduled increases & local minimums for all 50 states + DC

Federal Minimum: $7.25/hr • Tipped: $2.13/hr • Since July 24, 2009

State	Min Wage	Tipped Rate	Tip Credit	Effective	Next Increase	vs Federal

Note: When a state minimum wage is lower than the federal rate or no state law exists, the federal minimum wage of $7.25/hr applies to covered employees under the FLSA. Employers must always pay the highest applicable rate.

What Is a Tip Credit?

A tip credit allows employers to pay tipped employees a lower direct wage, using the employee's tips to make up the difference to the full minimum wage. Under federal law (FLSA), the maximum tip credit is $5.12/hr ($7.25 − $2.13). Employers must ensure that tips plus the direct wage equal or exceed the applicable minimum wage.

$7.25

Federal Minimum

$2.13

Federal Tipped Min

$5.12

Max Federal Tip Credit

States Prohibit Tip Credit

State	Min Wage	Tipped Rate	Max Tip Credit	Tip Credit?

Tip Pooling Rules

Front-of-House: Servers, bartenders, bussers, and hosts may share tips through a mandatory tip pool, provided the employer does not retain any portion.

Back-of-House: Under DOL rules, if an employer does NOT take a tip credit, cooks, dishwashers, and other back-of-house staff may be included in a tip pool. If the employer DOES take a tip credit, back-of-house staff may NOT participate.

Managers & Supervisors: May never participate in tip pools. Employers who violate this rule face penalties under the FLSA.

Tip Reporting Requirements

Employees who receive $20 or more in tips per month must report all cash tips to their employer by the 10th of the following month (IRS Form 4070 or equivalent).

Employers must report tips on Form W-2 and pay FICA taxes on reported tips. Allocated tips may be required on large food/beverage establishment returns (Form 8027).

FLSA Tip Credit Requirements: (1) Employer must inform the tipped employee of the tip credit provisions before using it. (2) The employee must retain all tips (except valid tip pool contributions). (3) Tips received plus direct wage must equal at least the full minimum wage. If tips fall short, the employer must make up the difference.

Historical Context: The federal minimum wage of $7.25/hr has not changed since July 24, 2009 — over 17 years. Meanwhile, many states have enacted their own increases through legislation, ballot measures, or automatic inflation indexing.

Inflation-Indexed States

Legislated Phase-Ins

$7.25

Federal (Since 2009)

Inflation-Indexed States (Automatic Annual Adjustments)

These states automatically adjust their minimum wage each year based on changes in the Consumer Price Index (CPI) or similar inflation measure.

Legislated Phase-In Schedules

These states have enacted specific legislation setting step increases toward a target rate.

State	Current Rate	Next Increase	New Rate	Target	Mechanism

Important: Employers must pay the HIGHEST applicable minimum wage — whether it is the federal, state, or local rate. Many cities and counties have enacted minimums that exceed their state level.

$0.00

Highest Local Rate

Localities Tracked

Highest Local vs Federal

City / County	State	Local Rate	State Rate	Above State By

Understanding the Three-Layer System

Minimum wage in the United States operates on three levels: federal, state, and local. When rates differ, the employer must pay the highest of the three.

For example, an employee working in Seattle, WA benefits from the local rate of $20.76/hr — nearly three times the federal minimum of $7.25/hr.

Currently, several states (including TX, LA, MS, and others) have preemption laws that prevent cities from setting their own minimum wages. In those states, only the state or federal rate applies.

Frequently Asked Questions