Why Is Minimum Wage Different in Other Places?
- The minimum wage differs in some states because certain state legislatures have passed laws that supersede federal standards. Federal law requires that when two minimum wage laws differ, the one that provides for the highest compensation for workers take precedence. For example, in the state of Colorado the minimum wage rate as of May 2011 is $7.36 per hour for workers in support service industries, retail positions and food and beverage industries, as well as for hourly workers in the medical field. Because Colorado's state minimum wage rate is higher than the federal standard of $7.25, the state rate prevails in the specified industries.
- Among the 50 states, 24 have the same minimum wage rate as the federal set standard. Seventeen states and the District of Columbia have higher minimum wage rates than the federal standard. In 2011, the state of Washington has the highest minimum wage rate, with Oregon ranking second. Conversely, as of January 1, 2011, four states -- Arkansas, Georgia, Minnesota and Wyoming -- as well as Puerto Rico, have minimum wage rates lower than the federal standard. The respective rates are Arkansas at $6.25 an hour, Minnesota at $6.15, Georgia and Wyoming at $5.15 and Puerto Rico at $4.10.
- Some states differentiate between what constitutes overtime pay. This higher rate of pay is based on the prevailing minimum wage rate within the state. For example, some states require employees to be compensated at a rate equaling one-and-a-half the basic rate for all hours worked above 40 in one workweek schedule. Some states require all hours worked beyond eight in one work day to be paid as overtime. Other states specify that overtime pay starts after more than 12 hours are worked in one day. California's Labor Code specifies that all hours worked over 12 in one day are to be paid at double time.
- Nevada has restrictive provisions in state laws pertaining to the minimum wage standard that specifies a different rate for workers based on whether or not the employee has access to health insurance. For employees that receive health insurance benefits provided by employers, the minimum wage rate is $7.25 per hour. For employees without employer-provided health insurance, the basic rate increases to $8.25 per hour.