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Minimum Wage Guide: 2024 Federal & State Rates

February 20, 2024

Everything you need to know about minimum wage in the U.S., including federal and state rates, tipped minimum wages and credits, and recent increases.

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  • Reviewed by Paylocity's Compliance & Government Relations Team
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What is Minimum Wage?

Minimum wage is the lowest hourly rate of pay an employer can legally pay their employees. Rates vary between counties, states, and cities, largely depending on the area’s cost of living.

In the United States, the Fair Labor Standards Act (FLSA) of 1938 created the current minimum wage system, and it imposed an initial wage rate of 25 cents per hour. Adjusted for inflation, that would equal about $5.40 in 2023.

At the state level, each state can also create and modify its own wage system, so long as it meets or exceeds the current federal rates. However, not all have chosen to do so. Five states (Alabama, Louisiana, Mississippi, South Carolina, and Tennessee) don't have their own wage laws, so they simply use the federal rate. Additionally, certain federal, state, and local contractors have special wage requirements based on the prevailing wages set by either a federal contract and/or state and local laws.

Tipped Wages and Credits 

No minimum wage definition would be complete without addressing how wage rates are applied to employees who earn tips along with their base pay, such as restaurant servers. 

According to the FLSA, employers can use the tips employees earn to lower the minimum wages they're required to pay. In other words, employers can offer a lower tipped wage to tipped employees, so long as those employees each earn enough tips (a.k.a., actual tip credits) to make up the difference.

Like the overall minimum wage, each state can set its own tipped minimum wage and tip credit rates so long as they meet or exceed the current federal rates. That said, some states don’t allow employers to pay employees the lower tipped minimum wage and claim a tip credit, or only allow them to claim a reduced tip credit if certain wages and benefits are paid to the employee.  

Key takeaways

  • The federal minimum wage was set to $7.25 per hour in 2009, but each state can set its own minimum wage rate. 
  • Some states have no minimum wage laws, so federal wage rates are used whenever an employer is subject to the Fair Labor Standards Act (FLSA). 
  • In some states, employees who earn tips along with their base pay may receive a lower minimum wage rate that accounts for those tips.  

What is the Federal Minimum Wage (2024)?

The federal minimum wage in 2024 is $7.25 per hour. However, the tipped wage rate is $2.13 per hour, so long as each employee earns enough actual tips during the workweek to make up the other $5.12 per hour. If they don’t earn enough tips, the employer must reduce the actual tip credit to ensure the employee receives the full minimum wage.  

Minimum Wage

Tipped Minimum Wage 

Actual Tip Credits

$7.25 

$2.13

$5.12 

2024 Minimum Wage by State

Each state's government controls and updates its minimum wage whenever an increase is necessary. Because of this, most state wages across the U.S. are currently higher than the federal rate. Some states even tie their rates to the Consumer Price Index (CPI) and adjust wage amounts annually to keep up with inflation. 

Below are the minimum wage and tip rates for each state. Learn more by following the links to each state’s tax facts page.

Area 

Minimum Wage

Tipped Minimum Wage 

Actual Tip Credits

Alabama* 

$7.25

$2.13 

$5.12

Alaska

$11.73

Not Permitted 

Arizona

$14.35 

$11.35

$3.00 

Arkansas

$11.00 

$2.63

$8.37 

California

$16.00 

$16.00

Not Permitted 

Colorado

$14.42 

$11.40

$3.02 

Connecticut

$15.69 

$6.38

$9.31 

Delaware

$13.25 

$2.23

$11.02 

District of Columbia

$17.00 

$8.00

$9.00 

Florida

$12.00 

$7.98

$4.02 

Georgia**

$5.15 

Not Permitted

Hawaii

$14.00

$12.75 

$1.25

Idaho

$7.25

$3.35 

$3.90

Illinois

$14.00

$8.40 

$5.60

Indiana

$7.25

$2.13 

$5.12

Iowa

$7.25

$4.35 

$2.90

Kansas

$7.25

$2.13 

$5.12

Kentucky

$7.25

$2.13 

$5.12

Louisiana* 

$7.25

$2.13

$5.12

Maine

$14.15

$7.08 

$7.07

Maryland

$15.00

$3.63 

$11.37

Massachusetts

$15.00

$6.75 

$8.25

Michigan

$10.33

$3.93 

$6.40

Minnesota

$8.85 (small employers) 
$10.00 (large employers)

Not Permitted 

Mississippi*

$7.25 

$2.13

$5.12 

Missouri

$12.30 

$6.15

$6.15 

Montana

$10.30 

Not Permitted

Nebraska

$12.00

$2.13 

$9.87

Nevada

$10.25 (with health benefits) 
$11.25 (without health benefits)

Not Permitted 

New Hampshire

$7.25 

$3.26

$3.99 

New Jersey

$15.13 

$5.26

$9.87 

New Mexico

$12.00 

$3.00

$9.00 

New York

$15.00 

$12.50

$2.50 

North Carolina

$7.25 

$2.13

$5.12 

North Dakota

$7.25 

$4.86

$2.39 

Ohio

$7.25 or $10.45*** 

$2.13 or $5.25***

$5.12 or $5.20***

Oklahoma

$7.25 

$3.625

$3.625 

Oregon

$14.20 

Not Permitted

Pennsylvania

$7.25

$2.83 

$4.42

Rhode Island

$14.00

$3.89 

$10.11

South Carolina* 

$7.25

$2.13 

$5.12

South Dakota

$11.20

$5.60 

$5.60

Tennessee* 

$7.25

$2.13 

$5.12

Texas

$7.25

$2.13 

$5.12

Utah

$7.25

$2.13 

$5.12

Vermont

$13.67

$6.84 

$6.83

Virginia

$12.00

$2.13 

$9.87

Washington

$16.28

Not Permitted 

West Virginia

$8.75 

$2.62

$6.13 

Wisconsin

$7.25 

$2.33

$4.92 

Wyoming**

$5.15 

$2.13

$3.02 

*Has no minimum wage laws but uses federal rates for employers subject to the FLSA.
**Has lower minimum wage laws but uses federal rates for employers subject to the FLSA.
***Only for businesses with annual gross sales over $385,000.

Federal Minimum Wage Increases 

The federal wage rate has increased nearly two dozen times since its adoption in 1938. When accounting for inflation, the 1968 increase to $1.60 per hour had the greatest value, equating to a minimum wage of $12.50 in 2023. 

The most recent increase in 2009, however, only bumped the rate from $6.55 to $7.25 per hour, which would be the same as a minimum wage of $10.33 in 2023.

2024 State Minimum Wage Increases 

Over two dozen states increased their wage rates for the 2024 calendar year:

  • Alaska 
  • Arizona
  • California 
  • Colorado
  • Connecticut 
  • D.C.
  • Delaware 
  • Florida
  • Hawaii 
  • Illinois
  • Maine 
  • Maryland
  • Michigan 
  • Minnesota
  • Missouri 
  • Montana
  • Nebraska 
  • Nevada
  • New Jersey 
  • New York
  • Ohio 
  • Oregon
  • Rhode Island 
  • South Dakota
  • Vermont 
  • Washington

Minimum Wage FAQs 

Do all states have a minimum wage law?

No, Alabama, Louisiana, Mississippi, South Carolina, and Tennessee don't have a law requiring employers to pay workers a minimum wage. Instead, these states use the federal wage rate for employees covered by the FLSA.  

Which state has the highest minimum wage in the U.S.?

While technically not a state, Washington D.C.'s minimum wage rate of $17.00 per hour is the highest in the country. Outside D.C., the state of Washington has the next highest rate at $16.28 per hour. 

Which state has the lowest minimum wage in the U.S.?

Aside from states with no such wage laws in the first place, the lowest minimum wage rate in the U.S. belongs to both Georgia and Wyoming at $5.15 per hour. Both states only apply this rate to employees who aren't subject to the FLSA (e.g., Opportunity Workers).  

Can cities or counties pass local laws raising the minimum wage above the state's rate?

Yes, several cities and municipalities across the U.S. have a wage rate higher than the rates set by their state governments. For example, the state wage rate for Illinois is currently $14.00 per hour, but Chicago has a local wage rate of $15.00 or $15.80 per hour depending on the size of the employer.

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