Minimum Wage by State
Which States Have a Higher Minimum Wage Than the Federal Rate?
The federal minimum wage is $7.25 per hour, but more than 30 states and many cities set their own, higher minimum wages that take precedence over the federal rate—several of which adjust automatically each year for inflation.
When federal and state rates differ, employers must pay whichever rate is highest for the jurisdiction where work is performed. A growing number of states index their minimum wage to inflation, increasing the rate automatically each year, often on January 1.
City and county minimum wages add a further layer in a number of states. Multi-location employers need a systematic way to track rate changes by exact work location, not just by state.
Minimum Wage by State Key Facts and Local Ordinance Rules:
- Federal minimum: $7.25/hour; over 30 states set a higher rate that takes precedence.
- Many states index minimum wage to inflation, with automatic annual increases (commonly each January 1).
- Some cities/counties set their own minimum wage above the state rate.
- Rate must be tracked by exact work location, not just by state, for multi-location employers.
Frequently Asked Questions
Does an employer just need to know their state's minimum wage?
Not always—some cities and counties set their own minimum wage above the state rate.
Do state minimum wages ever increase automatically?
Yes—a number of states index to inflation, often each January 1.
What rate applies if state and federal minimum wage differ?
Whichever is higher for the location where work is performed.
Does the minimum wage differ for tipped employees?
Yes—many states and the federal government allow a lower cash wage for tipped workers, provided tips bring total pay up to at least the standard minimum wage.
How can a multi-location employer stay compliant with varying minimum wage rates?
Payroll systems generally need to track each employee’s exact work location and apply the correct state, county, or city rate rather than a single company-wide rate.
Related terms: Tipped Minimum Wage, FLSA, State Income Tax Withholding by State