Understanding Minimum Wage Violations

Federal Laws

The Fair Labor Standards Act (FLSA) sets the federal minimum wage, currently $7.25 per hour for most employees. Employers must pay this rate or higher, depending on state or local requirements. The FLSA also requires payment for all hours worked, including work performed before or after scheduled shifts and certain travel time.

State Laws

Many states and cities have set higher minimum wage rates than the federal standard. These laws may also:

• Eliminate or restrict the tip credit for tipped workers
• Apply annual cost-of-living adjustments
• Include industry-specific minimum wage requirements

• Paying less than the applicable federal, state, or local minimum wage
• Failing to pay for all hours worked, including pre-shift or post-shift duties
• Taking unlawful deductions that reduce pay below minimum wage
• Misclassifying employees as exempt or as independent contractors to avoid paying minimum wage
• Improperly applying a tip credit or paying tipped workers less than the required cash wage

 Evidence may include:

• Pay stubs showing pay rates below the legal minimum
• Timesheets documenting all hours worked
• Written policies or instructions reflecting underpayment
• Witness testimony from coworkers about similar pay practices

Federal and state laws prohibit employers from retaliating against employees who:

• Request or demand minimum wage pay
• File a wage and hour complaint
• Participate in a labor investigation

Retaliation can include termination, demotion, reduced hours, or other adverse actions.

Potential remedies may include:

• Back pay for unpaid wages
• Liquidated damages equal to the amount of unpaid wages, unless employer can demonstrate good faith and with reasonable grounds to believe it was not a legal violation
• Attorneys’ fees and litigation costs
• Civil penalties under applicable state wage payment laws

Employers can reduce risk by:

• Ensuring all employees are paid at least the highest applicable minimum wage rate
• Paying employees for all hours worked, including pre- and post-shift duties
• Avoiding unlawful deductions that lower wages below the minimum
• Reviewing tip credit practices for compliance with federal and state laws