How Come I Don’t Get Paid Minimum Wage?

Per the Fair Labor Standards Act (FLSA), the federal minimum wage is $5.85/hour.  That statement is a bit misleading due to the fact that there are exceptions within this law.  The two most common exceptions are for those jobs that pay tips and for young workers.

If you’ve ever worked at a summer camp and then looked at your pay stub to figure out how much per hour you were getting, you probably got a shock when you found out that it was less than minimum wage.  The youth minimum wage is in fact $4.85 if the following criteria are met:

• The employee is over 20 years old
• The lower wage is only paid during the first 90 consecutive calendar days of employment
• The work does not displace other workers

The minimum wage for a worker who receives tips (e.g. busboy) is $2.13.  Pretty sad, eh?  The following criteria must be met:

• $2.13 + tips >= $5.85
• The employee gets to keep all the received tips
• The employee customarily and regularly receives more than $30/month in tips

If even after the above, you still don’t make the equivalent of $5.85/hour, your employee must make up the difference.  If business is slow and you start noticing that it’s not working out to $5.85, then start keeping track so that you have some ammo when you ask your boss for the difference.
Overall, considering that many states have minimum wage laws that are much more generous, both of these laws are pretty arcane.  If having to pay someone $5.85/hour instead of $2.13 (a whooping $3.72/hour difference) is going to make or break your business model, you’ve probably got problems.  Plus, $5.85 is pretty much impossible to live off of.  I guess the federal government has to set regulations that are palatable by the lowest common denominator state.