Federal Minimum Wage

The federal minimum wage — set at $7.25 per hour since July 24, 2009, under the Fair Labor Standards Act (29 U.S.C. §§ 201–219) — has gone longer without an increase than at any other point in the law's history, now nearly 17 years. Adjusted for inflation, $7.25 today is worth significantly less than the 1968 minimum wage peak, and far less than the 1968 peak in terms of purchasing power. Because the federal minimum is a floor, not a ceiling, 29 states plus Washington D.C. have set higher minimums: California and New York are at $16–$17, Seattle at $20.29, and the trend toward $15 as a common state/local standard has accelerated since the "Fight for $15" movement began in 2012. In states with no higher state minimum (including Alabama, Georgia, Louisiana, Mississippi, South Carolina, and Tennessee), the federal $7.25 applies. For tipped workers, the federal tipped minimum wage is $2.13/hour (unchanged since 1991) — employers must make up the difference if tips don't bring total compensation to at least $7.25. Congress has repeatedly passed minimum wage increase legislation in the House (including the Raise the Wage Act, which would phase in a $17 federal minimum), but the bills have not passed the Senate. The political divide: economic research on minimum wage effects remains contested, with studies showing minimal employment effects of moderate increases in most markets, but concerns about job loss and automation at higher levels in smaller or lower-cost markets.

Current Law (2026)

The federal minimum wage has been $7.25 per hour since July 24, 2009 — the longest period without an increase in the history of the federal minimum wage.

Legal Authority

• 29 USC Section 206 — Minimum wage (Fair Labor Standards Act)
• 29 USC Section 203(m) — Tip credit
• 29 U.S.C. § 207 — Maximum hours (overtime requirement; establishes the 40-hour workweek and 1.5x overtime rate that works in tandem with minimum wage to set the floor for worker compensation)
• 15 U.S.C. § 1 — Sherman Antitrust Act (context: minimum wage laws interact with labor market competition; wage-fixing agreements between employers violate § 1)
• 15 U.S.C. § 45 — FTC Act: unfair methods of competition (relevant to enforcement against anticompetitive wage practices)

Implementing Regulations (29 CFR)

• 29 CFR Part 785 — Hours Worked: WHD's official interpretations of what constitutes "hours worked" under the FLSA — the foundational companion to the minimum wage and overtime rules because minimum wage and overtime liability depend entirely on how many hours count. Key principles:

  • § 785.11 — "Suffered or permitted" work: the FLSA's broad definition of "employ" — to "suffer or permit to work" — means that work time includes any work the employer knows about or should have known about, even if the employer did not request it; an employee who voluntarily continues working past their shift, works through lunch, or works from home after hours has generated compensable time if the employer knew or could reasonably have known
  • § 785.13 — Management duty: management cannot escape overtime liability by telling employees not to work extra hours while simultaneously assigning workloads that can only be completed with extra hours; if management creates conditions that require off-the-clock work, the time is compensable; the duty to enforce work-hour limitations is management's, not the employee's
  • § 785.14–785.16 — Waiting time: whether waiting time is work time depends on whether the employee is "on duty" (waiting that is primarily for the employer's benefit, such as a driver waiting between routes on the employer's premises — compensable) or "off duty" (waiting that is sufficiently long and free to allow the employee to use the time for their own purposes — non-compensable); there is no bright-line rule — the determination turns on whether the employee is free to leave and free to use the time as they see fit
  • § 785.17 — On-call time: employees required to remain on the employer's premises or so close that they cannot use the time effectively for their own purposes must be paid; employees merely required to be reachable (carry a cell phone, be available within a reasonable response time) generally are not required to be paid if they can use the standby time freely; the critical question is whether the on-call restrictions are so onerous that the employee cannot use the time effectively for personal activities
  • § 785.18 — Rest periods: short breaks of 5 to 20 minutes are compensable work time; they are not "bona fide meal periods" because their primary purpose is employee relief, and their short duration makes them generally for the employer's benefit
  • § 785.19 — Meal periods: bona fide meal periods of 30 minutes or more are not work time — provided the employee is completely relieved from all duties; a nurse who must remain available to respond to patient needs during a 30-minute meal break is not relieved from duty and the meal period is compensable; a truck driver eating in the cab while waiting for loading is not relieved from duty; a worker who is free to leave the premises and go to a restaurant is relieved
  • §§ 785.20–785.22 — Sleeping time: for employees on continuous duty of less than 24 hours (e.g., a residential facility employee who sleeps on-site), all time including sleep is work time; for employees on duty for 24 hours or more (e.g., firefighters, live-in caregivers), the employer and employee may agree to exclude up to 8 hours of sleep time per 24 hours — provided the employer provides adequate sleeping facilities and the employee can usually sleep uninterrupted; more than 5 hours of sleep interruptions eliminates the exclusion
  • §§ 785.27–785.31 — Training time: training is not work time if all four conditions are met: (1) attendance is outside normal hours; (2) attendance is voluntary (not required by the employer or as a practical matter by the job); (3) the training is not directly related to the employee's current job (e.g., learning new skills for a different position); and (4) the employee does not perform productive work during the training; if any condition is not met, training time is compensable
  • §§ 785.34–785.40 — Travel time: home-to-work commuting is not work time even if the employee travels a long distance; travel between worksites during the workday is work time; travel on a one-day special assignment to another city (outbound travel in the ordinary hours of the day) is work time; travel on overnight trips that cuts across the employee's regular working hours on other days must be compensated for those working hours (a 9-5 employee traveling on a Saturday afternoon must be paid for hours that fall within the 9-5 window even though it is Saturday)

  Part 785 is written as an interpretive bulletin — it explains how WHD applies the FLSA's "hours worked" standard to recurring practical situations. Courts give substantial deference to these interpretations in FLSA litigation. The foundational principle — "suffered or permitted" work — is why wage and hour class actions so frequently allege off-the-clock violations: employers who create workloads requiring extra hours, or who maintain systems (like clocking out before completing tasks) that generate underpayment, face liability for all the hours they "suffered or permitted" employees to work regardless of whether they formally authorized them.

• 29 CFR Part 520 — Subminimum wage employment (§ 520.200: authority for paying less than minimum wage to full-time students, student-learners, and workers with disabilities under special certificates)

• 29 CFR Part 525 — Employment of Workers with Disabilities at Special Minimum Wages (FLSA Section 14(c)): the WHD regulations implementing the section of the Fair Labor Standards Act that authorizes employers to pay workers with disabilities below the federal minimum wage based on their measured productivity relative to workers without disabilities. This is among the most contested and politically charged provisions in U.S. labor law. Key provisions:

  • § 525.1 — Introduction: Section 14(c) of the FLSA (as amended in 1986) authorizes WHD to issue certificates allowing employers to pay "commensurate wages" to workers whose "disabilities" impair their productivity in the work they are performing; the employer pays a percentage of the prevailing wage equal to the worker's productivity percentage compared to a non-disabled worker doing the same work; the program is used primarily by sheltered workshops (nonprofit organizations employing people with developmental and intellectual disabilities in assembly, packaging, and service work)
  • § 525.10 — Prevailing wage rates: the employer must determine the "prevailing wage" — the rate paid to an experienced worker without disabilities doing the same or comparable work in the same area; the prevailing wage is the rate that would be paid under the FLSA minimum wage (or applicable federal or state minimum wage, whichever is higher) for non-disabled workers; a worker with a disability whose productivity is measured at 50% of a non-disabled worker's rate would be paid 50% of the prevailing wage — potentially far below minimum wage
  • § 525.11 — Certificate issuance: employers must apply to WHD for a special certificate; WHD evaluates whether the proposed subminimum wages are appropriate; certificates are employer-wide (covering all covered workers at the facility), not individual-specific
  • § 525.12 — Certificate terms and conditions: certificates specify the terms under which they are granted; they apply to all workers with disabilities employed under the certificate at the covered facility; wage surveys must be conducted regularly (every 6 months to 1 year) to ensure that commensurate wages reflect current productivity assessments
  • § 525.13 — Renewal: certificates must be renewed regularly; employers must document ongoing productivity assessments to justify renewal; WHD can require additional documentation or deny renewal if the program is not operating in compliance with the regulations
  • § 525.14 — Notice posting: employers must prominently display a WHD-prescribed poster informing workers about the special minimum wage program, their rights, and WHD contact information
  • § 525.17 — Revocation: WHD may revoke a certificate at any time for: misrepresentation or false statements in the application; failure to maintain required records; paying wages below the commensurate rate; or failure to provide required notices; revocation triggers immediate compliance with standard minimum wage requirements for all affected workers

  The Section 14(c) program has become one of the most contested aspects of federal labor law. Disability rights advocates argue that the program perpetuates segregated employment, suppresses wages, and conflicts with the Americans with Disabilities Act's integration mandate — many certificate holders pay workers pennies per hour. Sheltered workshop operators argue the certificates provide employment opportunities and structured work environments for people with severe disabilities who would otherwise have no employment options. Several states have phased out or banned subminimum wage employment: New Hampshire, Alaska, Maryland, Maine, and others have eliminated their state-level equivalents, and Vermont and Hawaii have ended the practice for state programs. The Biden DOL proposed in 2024 to phase out Section 14(c) certificates over a multi-year period; the Trump DOL has not finalized that proposal. As of 2026, approximately 100,000+ workers with disabilities in the U.S. are employed under active Section 14(c) certificates.

• 29 CFR Part 516 — Recordkeeping requirements (§ 516.2: records employers must keep for employees subject to minimum wage — name, hours, wages paid, pay period, total compensation)

• 29 CFR Part 776 — General coverage of the wage and hour provisions (interpretive bulletin on "engaged in commerce" and "production of goods for commerce" — determines which workers are covered)

• 29 CFR Part 779 — The Fair Labor Standards Act as Applied to Retailers of Goods or Services (231 sections across 6 subparts — the WHD's interpretive bulletin explaining FLSA coverage, enterprise coverage, and the retail establishment exemptions that can remove certain small, locally-selling businesses from minimum wage and overtime obligations):

  Coverage framework: The FLSA applies to any employee engaged in interstate commerce or in the production of goods for commerce, plus all employees of enterprises with an annual gross volume of sales or business of at least $500,000 (the "enterprise coverage" threshold). Most retail chains, department stores, restaurants, and hotels are covered enterprises. The exemptions in Part 779 provide relief from minimum wage and overtime for certain establishments or employees even within an otherwise-covered enterprise, based on the establishment's character and the nature of its sales.

  The "retail or service establishment" definition (§§ 779.301–779.302): An establishment qualifies as a "retail or service establishment" if at least 75% of its annual dollar volume of sales of goods or services is not for resale and is recognized as retail sales or services in the particular industry. Whether sales are "for resale" and whether they are "recognized as retail" depends on the industry's customs — a bakery selling bread to individual customers at retail is different from a bakery selling wholesale to restaurants. The 75% test applies to the establishment's own sales, not the enterprise as a whole.

  Section 13(a)(2) exemption (§ 779.301): A retail or service establishment (that meets the 75% test) is exempt from minimum wage and overtime if: (1) more than 50% of its annual dollar volume of sales is made within the state in which the establishment is located (the "local sales" requirement), AND (2) either the establishment is not part of a covered enterprise (annual enterprise volume is below $500,000) or the establishment's own annual dollar volume of sales is less than $250,000 (an older threshold). This exemption was designed for small, locally-operating stores — think a town's independent hardware store, local diner, or neighborhood barbershop — that compete in local markets rather than interstate commerce. Establishments that are part of large covered enterprises (national chains, regional chains) and whose own annual sales exceed $250,000 cannot claim the § 13(a)(2) exemption even if they meet the 75% retail test.

  What counts as a single "establishment" (§§ 779.303–779.305): An establishment is a distinct physical place of business — each separate store in a chain is a separate establishment. A departmentalized store (even with leased-out departments under different ownership) is a single establishment when operated as a unit. A bakery with a production back room and a retail front room is a single establishment if the owner operates them as one integrated business. Two physically separated portions of a business on the same premises may be separate establishments if they are also functionally separated — a grocery store with a separately operated food service counter could be two establishments.

  Section 13(b)(18) commission overtime exemption (§ 779.302, Subpart E): Employees of retail or service establishments may be exempt from overtime (but not minimum wage) if: (1) their regular rate of pay exceeds 1.5× the applicable minimum wage, AND (2) more than half of their total earnings in a representative period (at least one month) come from bona fide commissions on goods or services. This is the commission sales exemption that covers car salespeople, real estate agent employees, furniture salespeople, and other commission-based retail workers — they must be paid enough and earn enough commission income to qualify, but their employers don't owe overtime premiums for hours over 40.

  The retail establishment exemption framework reflects a statutory balance: Congress extended FLSA coverage broadly through enterprise coverage (the $500,000 threshold) but preserved exemptions for genuinely local retail businesses. Most large retailers are covered enterprises not protected by the exemption; the relief is targeted at small independent businesses selling locally. Section 13(b)(18) provides targeted overtime relief for commissioned sales employees whose high pay and commission structure make them comparable to piece-rate workers whose total compensation is not reduced by overtime pay requirements.

• 29 CFR Part 552 — Application of the Fair Labor Standards Act to Domestic Service: the WHD implementing regulations for FLSA coverage of workers employed in private homes — household workers such as housekeepers, cooks, gardeners, home health aides, and companions for the elderly. Domestic service workers were excluded from the original FLSA's coverage; Congress extended coverage to most domestic workers in 1974 and the regulations have evolved significantly since then:

  • § 552.100–552.101 — Coverage of minimum wage and overtime: household workers who work for a single employer for 8 or more hours per week or whose cash wages are above the Social Security domestic service cash wage test receive minimum wage coverage; overtime (time-and-a-half for hours over 40/week) applies to all covered domestic workers except live-in domestic service employees; live-in workers who reside in the employer's household are entitled to minimum wage but not overtime — a distinct exception reflecting the practical difficulties of tracking hours for round-the-clock residential employment
  • § 552.102 — Live-in domestic service employees: live-in workers are entitled to the full federal minimum wage for all hours worked but are exempt from FLSA overtime requirements; however, live-in workers must be paid for any "waiting time" or "on-call" time unless they are genuinely free to use the time for their own purposes; employers must keep accurate records of the hours worked by live-in employees
  • § 552.103–552.106 — Babysitting and companionship services: the FLSA "companion" exemption (29 U.S.C. § 213(a)(15)) historically excluded companions for the elderly and disabled from minimum wage and overtime; a 2013 DOL final rule (effective January 2015) significantly narrowed this exemption — companions employed by third-party home care agencies (not directly by the family) lost the exemption entirely; only individuals employed directly by the person receiving companion services (or by a family member) may still claim the companionship exemption, and even then, duties must be at least 80% "fellowship and protection" (not attendant care like medication management or medical assistance); this rule extended FLSA minimum wage and overtime to approximately 2 million home care workers who had previously been exempt

  The 2015 home care rule change was the most significant expansion of domestic worker wage protections in decades. It was upheld by the D.C. Circuit in Home Care Association of America v. Weil (2016) and took full effect. For the home care industry: direct-care workers employed by licensed home health agencies must receive minimum wage and overtime; the overtime obligation has driven some agencies to restructure scheduling (limiting hours per worker, hiring more part-time workers) to manage labor costs. For families hiring independent home care workers directly: the companionship exemption may still apply, but the duties test must be met and accurate recordkeeping is essential. Recent rulemakings: 78 FR 60454 (October 2013) — the home care/companion final rule extending minimum wage and overtime to third-party home care workers.

• 29 CFR Part 788 — Application of the Fair Labor Standards Act to Logging and Sawmill Operations (18 sections — the WHD's implementing regulation for the FLSA § 13(a)(13) logging exemption, which exempts small forestry and logging operations from both minimum wage and overtime requirements, one of the few categorical FLSA exemptions that applies based entirely on the size of the workforce at a single operation):

  • § 788.1 — Introductory: FLSA § 13(a)(13) provides that the Act does not apply to "any employee employed in forestry or lumbering operations" if (1) the number of employees employed by his employer in such operations does not exceed eight at any one time during the workweek; and (2) the principal activity of the employer is forestry or lumbering; this is the core small-crew forestry exemption; it removes minimum wage, overtime, and child labor requirements for qualifying operations — the most complete FLSA exemption available outside agriculture

  • § 788.12 — Forestry or lumbering operations defined: the exemption applies to employees engaged in forestry operations (timber cutting, tree harvesting, log transportation from stump to first place of storage, reforestation, and land clearing preparatory to cultivation) and lumbering operations (sawmill operations, log scaling, and related activities); activities beyond the first place of storage — including kiln drying, planing, finishing, and manufacturing of wood products — are not "lumbering" and fall outside the exemption

  • § 788.13 — The eight-employee limit: the exemption requires that the total number of employees in forestry or lumbering operations not exceed eight at any one time during the workweek; the count includes all employees engaged in covered operations, including supervisors who also do physical work, part-time workers, and employees temporarily assigned to the operation; if even one additional worker pushes the crew above eight for any moment of the workweek, the exemption is lost for all employees for that entire workweek — not just for the hours when the ninth worker was present; this all-or-nothing consequence makes crew sizing a compliance issue that directly determines whether minimum wage and overtime apply

  • § 788.14 — Independent contractors: the use of independent contractors rather than employees is common in logging operations; however, the economic reality test applies — if the loggers or drivers are economically dependent on the operation (using the employer's equipment, working exclusively for one customer, lacking business risk of their own), they may be classified as employees for FLSA purposes regardless of the contract structure; misclassifying employees as independent contractors to stay under the eight-person limit is a FLSA violation; WHD applies the "economic reality" test from Rutherford Food Corp. v. McComb (1947) to determine true employee status

  • § 788.15 — Principal activity requirement: the employer's "principal activity" must be forestry or lumbering; an employer that primarily operates a farm or construction company and occasionally performs some timber clearing does not qualify; the principal activity test is a majority-of-business-revenue or majority-of-employee-time measure — if wood harvesting or processing is the dominant line of business, the employer qualifies; a tree service company (focused on arboricultural services for individual property owners) is not engaged in "forestry or lumbering" within the meaning of § 13(a)(13) and does not qualify for the exemption even with fewer than eight employees

  The logging exemption reflects Congress's recognition that small, isolated logging crews — often working on seasonal contracts deep in forestlands — present the same administrative compliance challenges as family farms: no fixed place of business, irregular hours, variable crews, and remote locations. The eight-person cap limits the exemption to genuinely small operations; large logging contractors with multiple crews cannot stack the exemption by organizing into separate eight-person units, as the eight-employee count applies to the employer's total forestry/lumbering workforce. Recent rulemakings: no substantive amendments to Part 788 in the past decade; WHD has addressed logging sector compliance through opinion letters and enforcement guidance rather than rulemaking.

• 29 CFR Part 780 — Exemptions Applicable to Agriculture, Processing of Agricultural Commodities, and Related Subjects (265 sections — the primary interpretive regulation for the agricultural exemptions from FLSA minimum wage and overtime, among the broadest employer exemptions in federal labor law):

  • Subpart A — General (introductory provisions): the agricultural exemptions in FLSA § 13(a)(6) and (b)(12) exempt "employees employed in agriculture" from both minimum wage and overtime; the scope of "agriculture" is the critical definitional question — it includes farming operations but also processing and delivery activities that are so closely related to farming as to constitute part of it
  • Subpart B — The Meaning of Agriculture: "agriculture" covers primary farming (cultivating, tilling, growing, harvesting crops; raising livestock and poultry) and secondary agriculture (packing, preparing for market, delivering to storage or market) when performed by a farmer on the farmer's own or leased farm and in conjunction with the farmer's own farming operations — this "on the farm" and "in conjunction with" test determines whether the agricultural exemption extends to a particular worker; processing work done for multiple farms or off the farm is generally not "secondary agriculture"
  • Subpart C — Principally Engaged in Agriculture: the "principally engaged" test for overtime exemption applies to certain employees at small farms — farms that used fewer than 500 person-days of agricultural labor in any calendar quarter of the prior year are fully exempt from minimum wage for all agricultural workers; this small-farm exemption covers most family farms and many mid-size operations
  • Subpart D — Piece-Rate Compensation: employees exempt from overtime but subject to minimum wage may be paid on a piece-rate basis, provided average hourly earnings equal or exceed $7.25/hour; piece-rate records must allow calculation of effective hourly rate
  • Subpart E — Range Production of Livestock: herders and range workers for livestock operations in the western range are subject to a special monthly minimum wage (not hourly), with different standards for housing provided by the employer
  • Subpart F — Seasonal Exemptions: FLSA § 13(a)(7) provides a complete minimum wage and overtime exemption for local hand-harvest laborers (such as berry and vegetable pickers) who are employed on a seasonal basis, paid on a piece-rate basis, commute daily from their permanent residence, and have been employed in agriculture for fewer than 13 weeks in the previous year

  Agricultural workers' FLSA protections are uniquely limited compared to other industries: they lack overtime protections under federal law (farmworkers can be required to work 60+ hour weeks at straight time), child labor standards permit 12-year-olds to work on farms (the age floor is 10 for hand-harvesting), and the small farm exemption removes minimum wage coverage from millions of workers. These distinctions trace to the New Deal-era exclusion of agricultural and domestic workers — a compromise to secure southern Democratic votes that had racially discriminatory effects on Black farmworkers.

• 29 CFR Part 782 — Application of the Fair Labor Standards Act to Employees of Motor Carriers: the WHD's interpretive regulation explaining the FLSA § 13(b)(1) motor carrier overtime exemption — the provision that exempts truck drivers and certain motor carrier employees from FLSA overtime requirements (though not from minimum wage). This exemption affects an estimated 3+ million over-the-road truck drivers and is one of the broadest categorical overtime exemptions in federal labor law:

  • § 782.1–782.2 — The exemption framework: FLSA § 13(b)(1) exempts from the Act's overtime requirements (§ 7) any employee "with respect to whom the Secretary of Transportation has power to establish qualifications and maximum hours of service" — meaning the exemption applies when the Department of Transportation has jurisdiction over the employee's safety-affecting activities; the exemption covers overtime only, not minimum wage; a truck driver driving an 80-hour week must still be paid at least $7.25/hour for every hour worked, but receives no overtime premium for hours over 40
  • § 782.3 — Drivers: the exemption applies to drivers who operate commercial motor vehicles in interstate or foreign commerce; the DOT safety jurisdiction (and thus the FLSA exemption) extends to vehicles with a gross vehicle weight rating (GVWR) over 10,001 lbs — a threshold that includes all standard commercial trucks, semi-trailers, and many large pickup trucks used commercially; drivers of smaller vehicles (under 10,001 lbs GVWR) do not qualify for the motor carrier exemption and are entitled to FLSA overtime
  • § 782.4–782.6 — Driver's helpers, loaders, and mechanics: in addition to drivers, the exemption covers driver's helpers (employees who ride on the vehicle assisting with delivery), loaders (employees who load motor vehicles when their loading duties affect vehicle safety), and mechanics (who maintain the motor vehicles in safe operating condition); for helpers, loaders, and mechanics, the exemption applies only when a meaningful part of their work involves activities that affect the safety of operation of motor vehicles in interstate commerce
  • § 782.7 — Interstate commerce requirement: the exemption applies only when the employee's work is in interstate commerce — either by directly crossing state lines or by being part of a "continuous journey" involving multiple states; a driver who hauls entirely within one state may still qualify if the cargo is part of an interstate shipment (the "practical continuity" doctrine); purely intrastate work for an intrastate carrier does not qualify

  The motor carrier exemption has been a persistent labor policy issue because its scope is uncertain at the margins. The SAFETEA-LU Act (2005) narrowed it by excluding drivers of small vehicles (under 10,001 lbs GVWR) from the DOT safety jurisdiction — restoring FLSA overtime to drivers of delivery vans, smaller trucks, and parcel vehicles used by package delivery companies (creating the so-called "small vehicle exception"). Misclassification of employees as independent contractors (common in the trucking industry through owner-operator arrangements) intersects with the exemption: an independent contractor is not an "employee" covered by FLSA at all; whether a driver is a true independent contractor or a misclassified employee is a fact-intensive analysis under the economic reality test. Recent rulemakings: DOL's 2024 independent contractor final rule (89 FR 1638) tightened the economic reality analysis, potentially reclassifying some owner-operators as employees — which would then make the § 13(b)(1) exemption analysis relevant for their overtime claims.

• 29 CFR Part 553 — Application of the Fair Labor Standards Act to Employees of State and Local Governments (48 sections across 3 subparts — the WHD's implementing regulations for the 1985 FLSA amendments that brought state and local government employees under federal minimum wage and overtime rules; the Supreme Court's decision in Garcia v. San Antonio Metropolitan Transit Authority (1985) overruled National League of Cities v. Usery (1976) and held that Congress could apply the FLSA to state and local governments; the 1985 Amendments created special rules tailored to the unique needs of public employers):

  Subpart A — General (§§ 553.1–553.26) — Compensatory Time Off for Public Employees:

  • § 553.20 — Introduction to comp time: unlike private employers (who must pay cash overtime), state and local governments may give employees compensatory time off (comp time) at the rate of 1.5 hours of comp time for each overtime hour worked; comp time is a negotiated alternative to cash overtime — government employers and employees may agree (through collective bargaining or individual agreement) to use comp time instead of cash
  • § 553.21 — Statutory provisions: comp time agreements must be reached before work is performed; an employer may not retroactively convert already-earned overtime to comp time; for employees covered by collective bargaining agreements, the agreement must explicitly provide for comp time; for employees not covered by collective bargaining, an individual agreement or employer policy established before employment begins is required
  • § 553.22 — FLSA compensatory time defined: comp time accrues at a 1.5:1 ratio; employees may accumulate up to 240 hours of accrued comp time for most public employees (480 hours for employees in seasonal, emergency response, or law enforcement roles); once the cap is reached, the employer must pay cash for additional overtime
  • § 553.25 — Cash-out and use of comp time: employees must be permitted to use accrued comp time within a reasonable period if the use does not unduly disrupt agency operations; upon termination or retirement, unused comp time must be paid out in cash at the employee's final regular rate of pay or the average pay over the last 3 years (whichever is higher)

  Subpart B — Volunteers (§§ 553.100–553.106):

  • § 553.101 — Volunteer defined: a public employee may volunteer services to their own employer for different work (the local police officer who volunteers as a youth sports coach for the city's parks department); the volunteer must do so freely, without coercion, expectation of compensation, or promise of future employment benefits; if the "volunteer" work is the same type of work the employee is hired to perform, the hours are counted as regular employment, not volunteering
  • § 553.106 — Payment to volunteers: paying volunteers nominal fees, expenses, or benefits does not convert the relationship to employment as long as the amounts are reasonable and not tied to hours worked; the firefighter who receives a nominal annual stipend as a volunteer remains a volunteer, not an employee

  Subpart C — Fire and Law Enforcement: Special Overtime Rules (§§ 553.200–553.227):

  • § 553.201 — The § 7(k) partial overtime exemption: the most important provision for public safety employers; fire protection and law enforcement employees may work longer work periods (up to 28 days instead of 7) before overtime kicks in; for a 28-day cycle, overtime is owed only after 212 hours for fire employees and 171 hours for law enforcement; these thresholds accommodate extended shifts (24-hour fire shifts, 10/12-hour police shifts) without triggering overtime on every shift differential
  • § 553.200 — The § 13(b)(20) complete exemption: a separate complete overtime exemption applies to employees of small public agencies (fewer than 5 employees on duty at the same time in fire protection or law enforcement) — agencies below this threshold are fully exempt from overtime requirements for those employees
  • § 553.210 — Fire protection activities defined: includes fire suppression, emergency medical services performed by fire department employees, hazmat response, rescue operations, and training related to those functions; a hybrid firefighter/EMT in a combination department qualifies as "engaged in fire protection activities" if fire functions are the primary duty
  • § 553.211 — Law enforcement activities defined: employees with power to arrest, or who are trained for and have the responsibility to serve the public by making arrests; includes police officers, deputy sheriffs, corrections officers, park rangers with arrest authority, and transit police; school crossing guards without arrest authority are not in "law enforcement activities"
  • § 553.212 — 20% cap on nonexempt work: if a public safety employee spends more than 20% of work hours in non-exempt activities (administrative office work, non-public-safety tasks), the § 7(k) exemption is lost for that employee for that work period

  The 1985 FLSA extension to state and local governments transformed municipal employment practices. Cities and counties that had never tracked hours now faced federal recordkeeping, overtime, and minimum wage obligations. The comp time alternative (§ 553.20–553.25) was specifically designed to give cash-strapped public employers flexibility — paying out overtime in time off rather than cash. The fire and police § 7(k) exemption (§ 553.201) allows public safety staffing models that would otherwise generate enormous overtime liability — a 24-hour firefighter shift generates 16 hours of potential overtime on a 7-day workweek but only 2 hours under a 28-day § 7(k) cycle.

• 29 CFR Part 783 — Application of the Fair Labor Standards Act to Employees Employed as Seamen (52 sections — the WHD's official interpretation of how FLSA applies to seamen and maritime workers; issued under FLSA §§ 6(b)(2) and 13(a)(14), which provide a modified minimum wage standard for seamen and a partial overtime exemption):

  • §§ 783.17–783.22 — "American vessel" and "seaman" defined: the FLSA seaman exemption applies to employees whose primary duty is working as a seaman on an "American vessel" — a vessel documented or numbered under U.S. law; a "seaman" is an employee whose duties are primarily connected with navigation of the vessel or its operation as a means of transportation (not with the vessel's commercial cargo-handling); if an employee's work is primarily loading/unloading rather than navigation or seamanship, they are not a "seaman" under the FLSA and are entitled to standard minimum wage and overtime
  • §§ 783.30–783.36 — The § 6(b)(2) modified wage standard: seamen on "American vessels" engaged in foreign trade are entitled to a special minimum wage set by the Secretary of Labor based on prevailing wages in the industry; this special rate (which may be higher or lower than $7.25/hour depending on vessel type and trade) applies instead of the standard FLSA minimum wage; the practical effect is that deep-sea sailors typically earn well above $7.25 through collective bargaining, rendering this provision mainly a floor for unorganized marine workers
  • §§ 783.37–783.43 — The § 13(a)(14) partial overtime exemption: any employee employed as a seaman on any vessel (not just American vessels) is exempt from FLSA's overtime requirement; this is a complete exemption from the 1.5x overtime rule — seamen may be required to work more than 40 hours per week without overtime pay; the exemption reflects the unique nature of shipboard work where rotating watches and port-to-port scheduling make the standard 40-hour workweek inapplicable
  • §§ 783.50–783.57 — "Employed on a vessel": the overtime exemption applies to employees "employed on a vessel" — crew members, officers, and service workers living and working aboard ship; workers who perform services for a vessel but are not vessel-based (shore-based provisioning crews, port engineers) are not "employed on a vessel" and are not exempt; the "on a vessel" test focuses on whether the employee's primary work location is the vessel itself

  The seaman exemption structure reflects the historical reality that maritime employment is governed by a separate legal regime (admiralty and maritime law, the Jones Act, the Seamen's Act) with its own wage and hours norms established through collective bargaining with maritime unions (MEBA, SIU, IBU). The FLSA seaman provisions were added partly to avoid conflict with these industry-specific structures while ensuring a minimum wage floor exists. Workers on vessels operating in domestic inland waterways (towboat crews on the Mississippi, Great Lakes vessels, coastal barges) rely on Part 783's interpretations to determine their FLSA coverage when maritime union agreements don't cover their employer.

• 29 CFR Part 784 — FLSA Provisions Applicable to Fishing and Operations on Aquatic Products (79 sections — the WHD interpretive regulation explaining when fishing industry workers are exempt from FLSA's minimum wage and overtime requirements under FLSA §§ 13(a)(5) and 13(b)(4)):

  • § 784.100 — The § 13(a)(5) exemption (complete): employees employed in the "catching, taking, propagating, harvesting, cultivating, or farming of any kind of fish, shellfish, crustacea, sponges, seaweeds, or other aquatic forms of animal or vegetable life" are fully exempt from both minimum wage and overtime; the exemption extends to going to and returning from work, and to loading and unloading the catch
  • § 784.101 — The § 13(b)(4) exemption (overtime only): employees engaged in "canning, processing, marketing, freezing, curing, storing, packing for shipment, or distributing" aquatic products are exempt from overtime pay only — they must still receive the federal minimum wage
  • §§ 784.106–784.110 — Scope of the exemptions: only activities "directly and necessarily a part of" the named operations are exempt; office and clerical employees of fishing companies (§ 784.127) are not exempt just because their employer is in the fishing business; operations on non-aquatic products are never exempt; if more than 20% of a commodity consists of non-aquatic ingredients, the processing exemption does not apply (§ 784.112 — the 20% enforcement threshold)
  • §§ 784.120–784.132 — Offshore fishing operations: employees on fishing vessels performing catching, taking, or first processing of marine products "at sea" are exempt from both minimum wage and overtime (§ 784.128 — "at sea" requirement); this exemption covers the vessel crew, gear handlers, and on-board processing workers but not shore-based support staff; "at sea" is construed to accomplish the statutory objective — inland waterway and near-shore commercial fishing qualifies if the work involves procuring aquatic life from nature (§ 784.130)
  • §§ 784.113–784.117 — Workweek application: the exemption is applied on a workweek basis; if an employee performs exempt fishing work and nonexempt work in the same week, the applicable rules depend on the proportions of each type of work and whether the nonexempt work is "related to" the exempt operations; dead-season maintenance work (§ 784.113) is generally not exempt because the active fishing operations are not occurring during that period

  The fishing industry exemptions — like the agricultural exemptions in Part 780 — reflect Congress's recognition that seasonal, weather-dependent work subject to natural factors cannot always conform to standard minimum-wage and overtime structures. A commercial fisherman's compensation is typically share-based (a percentage of the vessel's catch value) rather than hourly, and the exemption accommodates that traditional pay structure. The § 13(b)(4) overtime-only exemption for shore-based processors (canneries, freezing plants) reflects a policy judgment that processing workers need minimum wage protection even when they don't need overtime protection.

• 29 CFR Part 794 — Partial Overtime Exemption for Wholesale or Bulk Petroleum Distributors Under FLSA § 7(b)(3) (52 sections — the WHD's interpretive bulletin explaining the narrow overtime exemption for employees of wholesale petroleum distributors; FLSA § 7(b)(3) provides a partial overtime exemption — not a complete one — for employees of enterprises engaged in the wholesale distribution of petroleum products):

  • § 794.100 — The § 7(b)(3) partial exemption: an employer qualifies if the enterprise is engaged in the wholesale or bulk distribution of petroleum products and pays employees at least 1.5 times the bona fide rate established by a collective bargaining agreement or industry practice for their classification; if both conditions are met, the employer is exempt from the standard 40-hour overtime threshold — but employees must still receive minimum wage for all hours worked
  • § 794.103 — Wholesale or bulk distribution requirement: the exemption applies only to enterprises primarily engaged in distribution — moving petroleum products from refineries or terminals to retail stations or commercial customers; manufacturers of petroleum products and retail fuel stations are not covered; a petroleum jobber or distributor that delivers fuel oil, gasoline, and diesel to customers qualifies if distribution is the enterprise's primary business
  • § 794.106 — "Enterprise" defined broadly: the exemption covers the entire enterprise, not just employees directly involved in distribution; clerical, maintenance, and support employees of a qualifying petroleum distribution enterprise may also be covered; but employees of a separate affiliated business (a retail station owned by the same company) are covered only if that business itself qualifies for the exemption
  • § 794.105 — Rate requirement: the collective bargaining or industry-established rate that must be paid is "bona fide" — it must genuinely reflect the prevailing rate for that type of work in the industry and not be set artificially low to qualify for the exemption; the WHD examines whether the rate is substantively real rather than a device to circumvent the FLSA

  The petroleum distributor exemption is a narrow, industry-specific provision dating to the mid-20th century when petroleum distribution was subject to extensive collective bargaining with established industry wage rates. It remains on the books but is rarely the subject of enforcement activity given the consolidation of the petroleum distribution industry and the reduction in traditional collective bargaining in the sector. Employees of petroleum distributors who are not covered by a collective bargaining agreement or bona fide industry rate do not qualify for the exemption and are entitled to standard FLSA overtime.

• 29 CFR Part 793 — Exemption of Certain Radio and Television Station Employees from Overtime Pay Requirements (FLSA § 13(b)(9)): WHD's official interpretive bulletin on the specialized overtime exemption for announcers, news editors, and chief engineers at small-market broadcast stations; the exemption removes the overtime premium (but not minimum wage) requirement for these employees:

  • § 793.10 — Primary employment in named occupation: the exemption applies only to an employee whose primary work is as an announcer, news editor, or chief engineer; "primarily" means the employee spends the major part of their working time in the named occupation; an employee who spends 60% of their time as an announcer and 40% doing unrelated administrative work qualifies; an employee spending only 30% of their time announcing does not
  • § 793.11 — Combination employees: the exemption applies to small-market stations where one employee performs multiple named functions (the "hyphenate" — an announcer-news editor-chief engineer at a tiny rural station); Congress specifically intended the exemption to accommodate these small-station operating realities where one person wears many hats
  • § 793.12–793.13 — Related and incidental work: an employee who is primarily an announcer may also perform other duties incidental to station operation (answering phones, light clerical work) without losing the exemption — but the incidental work must be genuinely ancillary; if the non-announcing duties are substantial and unrelated to the announcing role, the employee's primary employment test fails
  • § 793.15 — Duties away from the station: the exemption covers work performed away from the station building — a news editor covering a story in the field, or a chief engineer servicing a transmitter at a remote site, remains an exempt employee as long as the activities meet the primary-occupation and other requirements
  • Small-market station requirement: FLSA § 13(b)(9) limits the exemption to employees of a radio or television station in a community with a population of 100,000 or less (or, if the station is in a larger community, where the station has annual revenues below a statutory threshold); the population and revenue caps are Congress's proxy for "small market" — large-market network affiliates cannot claim the exemption even if an individual employee would otherwise qualify

  The broadcast exemption has shrunk in practical significance as the radio and television industries have consolidated; most employees at chain-owned stations in significant markets are not in communities below 100,000 population. But at rural and small-town AM radio stations, the exemption remains operationally important — allowing stations to employ full-time announcers/news directors working long broadcast weeks without overtime premiums that would be economically prohibitive at stations with very limited advertising revenue. The exemption does not affect the minimum wage requirement: exempt broadcast employees must still receive at least $7.25 per hour for every hour worked.

How It Works

The federal minimum wage floor under 29 U.S.C. § 206 means states and cities can set higher minimums — and many do — but cannot go below $7.25. Twenty-nine states plus Washington D.C. have enacted higher minimums; in states with no higher state law (including Alabama, Georgia, Louisiana, Mississippi, South Carolina, and Tennessee), the federal $7.25 applies by default. A separate standard governs tipped employees: under 29 U.S.C. § 203(m), employers may pay tipped workers as little as $2.13/hour — the federal tipped minimum, unchanged since 1991 — provided tips bring total compensation to at least $7.25. If a shift's tips fall short, the employer must make up the difference, and employers must inform employees of tip credit provisions before using them.

FLSA coverage is broad in practice. The law covers enterprises with $500,000 or more in annual revenue, plus individual employees engaged in interstate commerce, production of goods for interstate commerce, domestic service work, or certain government employment — which in practice reaches the vast majority of American workers. Partial exemptions cover certain agricultural workers (one of the broadest categories, with special rules under 29 CFR Part 780), seasonal amusement and recreational employees, companions for the elderly (under 29 CFR Part 552), some workers under disability employment certificates (being phased out), and newspaper delivery workers.

Because the federal minimum wage is not indexed to inflation, each increase requires an act of Congress. The $7.25 rate has been in place since July 24, 2009 — over 17 years without a change and the longest such period in the law's history. In real dollars, $7.25 in 2026 has roughly the purchasing power of $4.00 in 2009. A full-time worker at the federal minimum earns approximately $15,080/year before taxes. The overtime requirement under 29 U.S.C. § 207 — 1.5x the regular rate for hours over 40/week — works in tandem with the minimum wage as the floor for worker compensation.

Real Value Erosion

The purchasing power of $7.25 in 2009 would require approximately $10.50-$11.00 in 2026 dollars. In real terms, the federal minimum wage has lost ~30% of its value since the last increase. For comparison:

• 1968 minimum wage ($1.60) = ~$14.50 in 2026 dollars (the all-time peak in real terms)
• 2009 minimum wage ($7.25) = ~$10.75 in 2026 dollars
• 2026 minimum wage = $7.25 (nominal, no change)

How It Affects You

State Variations

Pending Legislation

• S 4081 — Fair Wages for Home Care Workers Act: expand minimum wage and overtime coverage to many in-home babysitters by narrowing the FLSA domestic exemption. Status: Introduced.
• S 4143 — Fair Wages for Incarcerated Workers Act of 2026: expand FLSA coverage to incarcerated workers in public and contract-run facilities. Status: Introduced.
• HR 6847 — Fair Wages for Farmworkers Act: tie H-2A farmworker wages to state BLS data. Status: Introduced.
• Raise the Wage Act: Recurring proposal to raise federal minimum to $15-$17/hour, phase out the tip credit, and index to median wage growth.
• No Tax on Tips Act: Separate proposal to exempt tip income from federal income tax (would interact with tipped wage structure).
• Regional minimum: Some proposals would set different federal minimums based on regional cost of living.
• HR 2013 — Higher Wages for American Workers Act of 2025: sets a $15 federal minimum wage and requires annual inflation adjustments using the CPI for Urban Wage Earners. Status: Introduced.
• HR 1115 — Paycheck Fairness Act: would strengthen enforcement, require employer pay-data reports, fund negotiation trainings, and widen remedies to reduce sex-based wage gaps. Status: Introduced.

Recent Developments

• Federal minimum wage stuck at $7.25 (15+ years): The federal minimum wage has not increased since July 2009 — the longest period without a federal increase since the minimum wage was established in 1938. The $7.25 rate has lost roughly 25-30% of its purchasing power in real terms since 2009. The Raise the Wage Act (introduced in each Congress since 2017) would increase the federal minimum to $17/hour over several years; it has passed the House twice but has not advanced in the Senate due to the 60-vote threshold.
• State minimum wages filling the gap: With no federal action, state minimum wages have increased dramatically — as of 2026, 30+ states and D.C. have minimum wages above $7.25, with California at $16.50/hour, Washington at $16.28/hour, and New York at $16/hour. Many cities have enacted $15-$20/hour minimums (Seattle, San Francisco, New York City). The "Fight for $15" movement of 2012-2016 largely succeeded at the state and local level even as the federal floor remained frozen.
• Trump revoked Biden federal contractor wage order: The Biden administration's EO 14026 raised the minimum wage for federal contractors to $17.75/hour for 2025 (indexed to inflation). President Trump revoked EO 14026 on March 14, 2025 (EO 14236), eliminating the contractor-specific wage floor going forward; existing contracts may retain the higher rate until renegotiated. Federal contractor wage floors are separate from the $7.25 statutory minimum and are not subject to the same congressional gridlock.
• DOL tip credit and subminimum wages: The federal tip credit — allowing employers to pay tipped workers as low as $2.13/hour if tips bring total compensation to $7.25 — has been targeted for elimination in multiple reform proposals. The subminimum wage for workers with disabilities (Section 14(c) of the Fair Labor Standards Act) allows employers to pay below minimum wage to disabled workers based on productivity assessments; disability advocates and the Biden DOL proposed elimination of 14(c) certificates, which the Trump DOL has not finalized.