Minimum wage is the minimum amount of earnings an employer is required to pay workers for work performed during a given period. Minimum wage can be set by law, decision of an authority, a wage board, a wage council, or by industrial or labor courts.
What is the purpose of minimum wage?
The purpose of minimum wage is to protect workers against unreasonably low pay. It helps protect all employees and ensure workers receive compensation for their work.
As of 2023, the federal minimum wage in the United States is $7.25 per hour. States and local municipalities can set their own minimum wage rates, but the state rate has to be higher than the federal rate to qualify. Everyone working (including those on minimum wage) are subject to income thresholds.
What are income thresholds?
Income thresholds are the total income for the tax year that will be subject to income tax. This includes salary, bonus, profits from self-employment, benefits, pension income (including UFPLS), income earned from property, savings and dividends, and so on.
Are there exemptions from minimum wage?
Not all workers are entitled to minimum wage. Tipped workers, for instance, may receive a lower minimum wage of $2.13 per hour if they make more or an equal amount in tips than the federal minimum wage. Students and employees under the age of 20 are also not required to receive minimum wage.