The federal minimum wage of $7.25 per hour still applies in 20 states and territories that have either set their own minimum wage at $7.25 or have no state minimum wage law at all. The rate has been unchanged since July 2009, making it the longest stretch without a federal increase in the history of the minimum wage.
States With No Minimum Wage Law
Five states have never enacted their own minimum wage law. Workers in these states are covered by the federal floor of $7.25, but only if their employer is subject to the Fair Labor Standards Act (FLSA), the federal law that sets wage and hour rules. In practice, most employers with at least $500,000 in annual revenue are covered, along with hospitals, schools, and government agencies.
The five states with no state minimum wage law are Alabama, Louisiana, Mississippi, South Carolina, and Tennessee.
States With a $7.25 State Minimum Wage
Thirteen states and one territory have a state minimum wage on the books, but it matches the federal rate exactly at $7.25 per hour. Workers here earn the same as they would under federal law alone. These are Idaho, Indiana, Iowa, Kansas, Kentucky, New Hampshire, North Carolina, North Dakota, Pennsylvania, Texas, Utah, Wisconsin, and the Commonwealth of the Northern Mariana Islands.
States That Default to $7.25 in Certain Cases
A handful of states have minimum wage laws that technically set a different rate but still result in $7.25 for many workers. Georgia and Wyoming each have a state minimum wage of just $5.15 per hour, but employers covered by the FLSA must pay the higher federal rate of $7.25. In practical terms, most workers in those states earn at least $7.25.
Oklahoma and Ohio also have situations where $7.25 applies. In Oklahoma, employers that don’t meet the threshold for the state’s higher rate default to the federal minimum. In Ohio, employers with annual gross receipts under $405,000 pay $7.25 rather than the state’s standard rate.
What $7.25 Means for Tipped Workers
In states that follow the federal tipped wage rules, the picture is even starker. Employers can pay tipped employees, such as restaurant servers, a cash wage of just $2.13 per hour as long as tips bring total earnings up to at least $7.25. The difference of $5.12 is called a “tip credit.” If an employee’s tips don’t bridge the gap in any given pay period, the employer is required to make up the difference.
States that follow this $2.13 tipped minimum include Alabama, Georgia, Indiana, Kansas, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, Texas, Utah, and Wyoming. Some other states at the $7.25 level set their tipped cash wage slightly higher, and a growing number of states outside the $7.25 group have eliminated the tip credit entirely, requiring full minimum wage before tips.
Workers Who Can Legally Earn Less Than $7.25
Even in states where $7.25 is the floor, federal law allows a lower rate for certain workers. Employees under 20 years old can be paid a youth minimum wage of $4.25 per hour during their first 90 consecutive calendar days of employment with any employer. Once those 90 days pass, or the worker turns 20, the employer must raise their pay to at least $7.25.
Employers cannot fire or cut the hours of existing workers to replace them with youth-wage employees. Doing so violates the FLSA’s anti-displacement rules, and affected workers are entitled to reinstatement and back pay. Separate subminimum wage provisions also exist for full-time students and certain learner or apprentice positions, though these require special certificates from the Department of Labor.
Why These States Stay at $7.25
Every state with a higher minimum wage got there by passing its own legislation or ballot initiative. The states still at $7.25 have not taken that step, so the federal rate serves as their wage floor by default. Some of these states, like Texas and Pennsylvania, have seen repeated legislative proposals to raise the rate, but none have passed into law. Without either a state-level increase or a change to the federal minimum wage, the $7.25 rate remains in effect indefinitely.
For context, a full-time worker earning $7.25 per hour and working 40 hours a week grosses about $15,080 a year before taxes. That figure falls below the federal poverty line for a household of two.