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Federal and State Minimum Wage Rates for 2018

by Megan Roth5 min read
minimum wage rates

Minimum wage rates is the term used to refer to the lowest per hour wage that a worker must be paid as mandated by Federal Law. This wage is also known as the “pay floor”. The minimum wage for employees in the public as well as private sectors as well as Federal and State governments is decided by the Fair Labor Standard Act or FLSA. As per the FLSA rules, non-exempt employees have to be paid at least the minimum wage rates for 2018 for the work they do.

Here are the details of Federal and State minimum wage rates for 2018. These details also mention the exceptions and scheduled increases in rates.


Minimum Wage – Federal Government

The minimum wage rates as per the Federal government is $7.25 an hour. This rate has not increased since July of 2009.

In September 2017, the Department of Labor issued a notice that from January 1, 2018, the minimum wage rate will be increased to $10.35 an hour. However, this new rate will be paid out only to employees who work on federally covered contracts. Employees who are tipped and not working on covered Federal contracts will get $7.25 an hour.

Exception to the Minimum Wage Law: As a rule, people who work in tipped jobs, meaning they also get tips from their customers (such as servers at restaurants), get paid less than the minimum wage. However, the condition is that the tipped employee should make a minimum of $30 dollars a month from tips. If the employee gets less than that amount, then his/her employer is by law bound to pay him/her more per hour


Minimum Wage rates for 2018 – State Government

The Economic Policy Institute’s minimum wage tracker shows that 29 States as well as the country’s capital city, Washington DC has a higher minimum wage rate than the Federal rate.

Since the Federal government hasn’t done anything to raise minimum wage rates in the last decade, many state governments have gone ahead and increased minimum wage levels for their states.   

According to the analysis done by National Employment Law Project, from January 1, 2018, minimum wage rates will increase in 18 States as well as 20 cities and counties. Another 3 states and 18 cities and counties are expected to increase their minimum wage rates later this year. This will take the count for 2018 minimum wage rate increases to 35 cities and counties and 21 states.

The Balance has listed out minimum wages rates for each state and also mentions whether there has been an increase in the hourly minimum wage. Of these states, 20 have increased the minimum wage

According to data from NELP, here are a few highlights about the minimum wage hikes this year:

  • There are already 13 cities in the US that are already paying $12 or more per hour
  • Multiple Silicon Valley cities, San Francisco, Emeryville and Berkeley will join Seattle and SeaTac by increasing their hourly minimum wages to $15. NYC is expected to follow suit by December 31 this year.
  • 17 counties and cities (as well as 6 states) will slowly increase their minimum wage rates until they reach the $12 – $15 mark in the next few years.


The fight for increasing the minimum wage rates continues in 17 more states and cities. For example, the Raise Up Massachusetts campaign activists submitted 139,000 signatures to the state government, asking for a vote to be taken regarding the minimum wage increase in 2018 elections. New Jersey’s Governor-Elect, Phil Murphy, is promising a minimum hourly wage to be increased as a part of his election campaign.


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