Minimum Wage Law: W9 Worker Rights Explained

The federal minimum wage in the United States is $7.25 per hour, as outlined in the Fair Labor Standards Act (FLSA). This act applies to employees of enterprises with an annual gross volume of sales or business of at least $500,000, as well as employees of smaller firms if they are engaged in interstate commerce or the production of goods for commerce. While the FLSA sets a federal minimum wage, many states have their own minimum wage laws, and some local governments have established minimum wages that are higher than the federal standard. When an employee is subject to local, state, and federal minimum wage laws, they are entitled to the highest of the three. This raises the question: does the minimum wage law apply to W-9 workers?

Who is entitled to minimum wage?

The federal minimum wage in the United States is $7.25 per hour. This applies to employees of enterprises with an annual gross volume of sales or business of at least $500,000. It also applies to employees of smaller firms if they are engaged in interstate commerce or the production of goods for commerce, such as transportation or communication. Other employees who fall under the minimum wage law include guards, janitors, and maintenance employees who perform duties closely related and directly essential to such interstate activities. The law also applies to employees of federal, state, or local government agencies, hospitals, and schools, and it generally applies to domestic workers.

However, it's important to note that not all workers are entitled to the minimum wage. Independent contractors, for example, are not covered by minimum wage laws because they are not legally considered employees. Certain categories of employees, such as farmworkers and specific professional workers, are also exempt from minimum wage laws.

In addition to the federal minimum wage, many states have their own minimum wage laws, and some local governments, particularly in large cities, have established their own minimum wages. When an employee is subject to both state and federal minimum wage laws, they are entitled to the higher of the two minimum wages. This also applies when an employee is subject to valid local, state, and federal minimum wage laws—they are entitled to the highest of the three minimum wages.

There are also specific circumstances where minimum wage exceptions apply. For example, employers may pay a youth minimum wage of $4.25 per hour to employees under the age of 20 during their first 90 consecutive calendar days of employment. After 90 days or when the employee turns 20, they must be paid the standard minimum wage of $7.25 per hour. Similarly, employers who obtain a Section 14(c) certificate from the U.S. Department of Labor may pay employees with disabilities, full-time students in certain workplaces, or student-learners enrolled in vocational education programs below the minimum wage.

The Fair Labor Standards Act (FLSA) contains a number of exemptions from the minimum wage, including executives, administrators, professionals, and outside salespersons. These exemptions likely exist because these employees are believed to have a higher level of bargaining power and are less vulnerable to overreaching by their employers.

What is the minimum wage for workers who receive tips?

The minimum wage for tipped employees is a complex issue, and the rules vary depending on the state and even city in the US. Federal law sets the minimum basic cash wage at $2.13 per hour, but this can be supplemented by tips to reach a total of $7.25 per hour, the federal minimum wage. This is known as a "tip credit", where employers can credit up to $5.12 per hour in tips against a worker's earnings. If an employee's total earnings fall short of the $7.25 per hour minimum, the employer is required to increase the cash wage to compensate.

Some states have chosen to increase the tipped minimum wage above the federal requirement. For example, the District of Columbia has the highest minimum wage for tipped workers in the country, with a minimum wage of $8 per hour for tipped workers, set to incrementally increase until it matches the non-tipped minimum wage in 2027. Seattle and Los Angeles have also implemented new minimum wages for tipped workers, at $17.25 and $16.78 per hour, respectively.

On the other hand, some states have no specific laws regarding a minimum wage for tipped employees, and some states have the same minimum wage for both tipped and non-tipped employees.

It is important to note that independent contractors, such as freelancers, are not covered by minimum wage laws and are not entitled to the minimum wage.

Do young workers need to be paid the minimum wage?

The Fair Labor Standards Act (FLSA) establishes the minimum wage for workers in the US. While the federal minimum wage is $7.25 per hour, many states have different minimum wages. In cases where an employee is subject to both state and federal minimum wage laws, the employee is entitled to the higher of the two minimum wages.

The FLSA allows employers to pay a youth minimum wage of $4.25 an hour to employees under 20 years of age during their first 90 days of employment. After this period, they are entitled to the full minimum wage. This law contains protections for employees that prohibit employers from displacing any employee to hire someone at the youth minimum wage.

However, the existence of a youth minimum wage has been criticised as a form of age-based pay discrimination that allows employers to undervalue and exploit young workers. In 34 states and Washington, D.C., employers can pay minors less than adults in the same roles. This has led to young workers missing out on thousands of dollars a year.

In the UK, the minimum wage for 18-20-year-olds is £8.60, and for 16-17-year-olds and apprentices, it is £6.40. This is significantly lower than the headline minimum wage rate of £11.44.

Are there minimum wage exceptions for full-time students?

The U.S. federal minimum wage is $7.25 per hour. However, there are exceptions to this rule, including for certain categories of workers, such as full-time students.

Full-time students who work in retail or service stores, agriculture, or colleges and universities might not be entitled to the minimum wage. If their employer has obtained a special certificate from the Department of Labor, they can be paid 85% of the minimum wage, or $6.16 per hour. This is known as the Full-time Student Program. The certificate also limits the hours that the student may work to 8 hours in a day and no more than 20 hours a week when school is in session and 40 hours when school is out. Once students graduate or leave school, they must be paid the full minimum wage of $7.25 per hour.

There are some limitations on the use of the full-time student program. For information on the limitations or to obtain a certificate, contact the Department of Labor's Wage and Hour National Certification Team at 230 South Dearborn Street, Room 514, Chicago, Illinois 60604, telephone: 312-596-7195.

What is the minimum wage for student learners?

The minimum wage for student learners in the United States is a complex issue. The federal minimum wage is $7.25 per hour, and this applies to most workers. However, there are special rules for student workers.

Full-time students who work in retail, service stores, agriculture, or educational institutions might not be entitled to the minimum wage if their employer has a special certificate from the Department of Labor. In this case, the employer must pay the student at least 85% of the minimum wage, which is $6.16 per hour. This is known as the Full-Time Student Program.

Additionally, there is a Student-Learner Program for high school students aged 16 and above who are enrolled in vocational education (shop courses). Employers can obtain a certificate from the Department of Labor, allowing them to pay the student a minimum of 75% of the federal minimum wage, which is $5.44 per hour.

It is important to note that these programs are not limited to workers under 18 years of age, and the rules may vary from state to state. For example, in California, federal law allows student-learners and full-time students to be paid a reduced rate of $4.25 for their first 90 days of employment. After this period, or when the worker turns 20, they must be paid at least the federal minimum wage. Additionally, California state law provides for learner employees to be paid 85% of the state's minimum wage for their first 160 days on the job if they have no prior related or similar work experience.

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