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Summary

The Fair Labor Standards Act (FLSA), enacted in 1938, is the federal law that establishes the general minimum wage that must be paid to all covered workers. The FLSA covers all employees working at a site located in a state, the District of Columbia, or a territory of the United States. While the FLSA mandates broad minimum wage coverage, states and localities have the option of establishing minimum wage rates that are different from those set in the FLSA. Under the provisions of the FLSA, an individual is generally covered by the higher of the state, local, or federal minimum wage.
 
This report covers developments in minimum wage policies in the 50 states and the District of Columbia but does include information on local minimum wage policies. Based on current rates and scheduled increases occurring at some point in 2022, minimum wage rates are above the federal rate of $7.25 per hour in 30 states and the District of Columbia, ranging from $1.50 to $8.85 above the federal rate. Another 13 states have minimum wage rates equal to the federal rate. The remaining 7 states have minimum wage rates below the federal rate or do not have a state minimum wage requirement. In the states with no minimum wage requirements or wage rates lower than the federal minimum wage, only individuals who are not covered by the FLSA are subject to those lower rates.

In any given year, the exact number of states with a minimum wage rate above the federal rate may vary, depending on the interaction between the federal rate and the mechanisms in place to adjust the state minimum wage. Adjusting minimum wage rates is typically done in one of two ways: (1) legislatively scheduled rate increases that may include one or several increments; (2) a measure of inflation to index the value of the minimum wage to the general change in prices.

Of the 30 states and the District of Columbia with minimum wage rates above the federal rate, 3 currently have no scheduled increases beyond 2022, 7 states have legislatively scheduled rate increases only after 2022, and 18 states and the District of Columbia have scheduled increases through a combination of planned increases and current- or future-year indexation of state minimum wage rates to a measure of inflation. In addition, currently 12 states—California, Connecticut, Delaware, Florida, Hawaii, Illinois, Maryland, Massachusetts, New Jersey, New York, Rhode Island, Virginia—and the District of Columbia have scheduled rate increases to at least $15.00 per hour at some point between 2020 and 2026.
 
Because the federal and state minimum wage rates change at various times and in various increments, the share of the labor force for which the federal rate is the binding wage floor has changed over time. Since 1981, there have been three series of increases in the federal minimum wage rate—1990-1991, 1996-1997, and 2007-2009. During that same period, there have been numerous changes in state minimum wage policies. As a result of those interactions, the share of the U.S. civilian labor force living in states in which the federal minimum wage is the floor has fluctuated but generally declined, and is about 37% as of 2022.
 
https://crsreports.congress.gov/product/pdf/R/R43792

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