Unpaid Wages and Overtime: The Federal Floor and What Your State Adds

The federal minimum wage is $7.25 per hour under 29 U.S.C. 206(a)(1)(C), and it has not changed since July 24, 2009, the longest stretch without an increase since the Fair Labor Standards Act was enacted in 1938. It is a floor, not the operative rate for most workers. Section 218(a) of the same title preserves any higher state or local standard, so where the rates differ your employer must pay the highest one that applies to you.

According to the Department of Labor's consolidated state minimum wage table, 30 states plus the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands set a rate above $7.25. Thirteen states match $7.25 exactly: Idaho, Indiana, Iowa, Kansas, Kentucky, New Hampshire, North Carolina, North Dakota, Oklahoma, Pennsylvania, Texas, Utah, and Wisconsin. Georgia and Wyoming still have $5.15 on the books, and five states (Alabama, Louisiana, Mississippi, South Carolina, and Tennessee) have no state minimum wage law at all. In all seven of those, an employer covered by the FLSA still owes $7.25.

Do not assume a rate you read in January is still current in July. Roughly 20 states index or step up on January 1, while the District of Columbia, Alaska, Oregon, and Nevada adjust on July 1. Florida steps to $15.00 on September 30, 2026, and Michigan to $15.00 on January 1, 2027. West Virginia at $8.75 is the lowest above-federal state rate, Washington at $17.13 is the highest state rate, and the District of Columbia is the highest jurisdiction overall. Cities and counties add a further layer, and many local rates run above their own state's figure.

Under 29 U.S.C. 207(a)(1), a non-exempt employee must be paid at least one and one-half times the regular rate for all hours over 40 in a workweek. That is the entire federal overtime trigger. There is no federal daily overtime requirement, so under federal law alone a 12-hour Monday means nothing unless the week crosses 40 hours.

Several states do add a daily rule, and in those states hours can generate overtime even in a week under 40. California pays 1.5 times the rate after 8 hours in a workday and 2 times after 12. Alaska uses an 8-hour daily trigger, Colorado 12, and Puerto Rico 8. Nevada uses 8 hours for employees earning under 1.5 times the state minimum wage. Kentucky adds seventh-day premium pay generally, and Connecticut does so for restaurant workers. Minnesota uses a 48-hour weekly trigger for workers not covered by the FLSA. The large majority of states have no daily rule at all, so confirm your own state before assuming either way.

California's seventh-day rule is narrower than it is usually described. It keys to the seventh day of a workweek, not to any rolling seven consecutive days: on that day the first 8 hours are paid at 1.5 times the rate and anything beyond 8 hours at 2 times (Cal. Lab. Code 510(a)).

Two federal rules shut down common workarounds. Each workweek stands alone, so an employer cannot average your hours across two or more weeks: 30 hours one week and 50 the next still produces 10 hours of overtime (29 C.F.R. 778.104). And compensatory time off in place of overtime pay is available only to state and local government employers, so a private-sector employer cannot lawfully give a non-exempt worker comp time instead of overtime wages, in any state, even with your consent (29 U.S.C. 207(o)).

Federal law lets an employer count part of your tips toward the minimum wage. Under 29 U.S.C. 203(m)(2)(A) and 29 C.F.R. 531.59, an employer taking the tip credit must pay a direct cash wage of at least $2.13 per hour, may credit tips for no more than $5.12, and must make up any shortfall whenever cash plus tips fails to reach $7.25 for the hours you worked.

That $2.13 floor is the operative rule in only about 18 jurisdictions. Seven states (Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington), plus Guam, allow no tip credit at all and require the full state minimum wage in cash before tips are counted. Roughly 30 other jurisdictions require a cash wage above $2.13 but below the full minimum. Michigan's tipped cash wage steps up annually toward 50 percent of the state minimum by 2031, and the District of Columbia's is a moving percentage of its standard minimum, so these figures should be re-checked each January and July.

Who counts as a tipped employee varies too. The FLSA definition at 29 U.S.C. 203(t) is a worker who customarily and regularly receives more than $30 a month in tips, and an employer cannot take the federal tip credit for anyone below that. States set their own thresholds and the stricter one controls: Massachusetts and North Carolina use more than $20 a month, South Dakota more than $35, Vermont more than $120, Pennsylvania $135 a month, and Maine more than $191. In the seven no-credit states, no tip level makes the credit available.

One rule does not vary. No employer may keep any portion of an employee's tips, and managers and supervisors may not share in employee tips, whether or not the employer takes a tip credit (29 U.S.C. 203(m)(2)(B)).

Side work is a special case. The Department of Labor's 2021 "80/20/30" rule is gone as a matter of federal law: the Fifth Circuit vacated it in Restaurant Law Center v. U.S. Department of Labor, 115 F.4th 396 (5th Cir. 2024), and DOL removed it from the regulations effective December 17, 2024, restoring the 1967 dual jobs rule at 29 C.F.R. 531.56(e), which asks whether the work is part of the tipped occupation rather than counting minutes. Do not read that as the end of percentage-of-time side-work rules everywhere, because state analogues survive independently: New York still denies the tip credit for any day a hospitality worker spends more than two hours, or more than 20 percent of the shift, on non-tipped work (12 NYCRR 146-2.9).

Being paid a salary does not by itself make you exempt from overtime, and your job title is irrelevant. Under 29 C.F.R. 541.100 your employer must establish both halves of the test: that you are paid on a salary basis at or above the applicable threshold, and that your actual day-to-day duties satisfy a specific exemption.

As of July 24, 2026, the operative federal white-collar salary level is $684 per week, which is $35,568 a year, and the highly compensated employee threshold is $107,432 a year. The 2024 rule that would have raised the salary level to $844 and then $1,128 per week, with the highly compensated employee level going to $132,964 and then $151,164 a year, was vacated nationwide by the Eastern District of Texas on November 15, 2024 in Texas v. U.S. Department of Labor, 756 F. Supp. 3d 361, and by the Northern District of Texas on December 30, 2024 in Flint Avenue, LLC v. U.S. Department of Labor. The Fifth Circuit dismissed the appeals on May 5 and May 7, 2026, and DOL published a technical amendment effective May 15, 2026 that removed the vacated text and restored the 2019 figures (91 Fed. Reg. 27833). If you see $844, $1,128, $43,888, $58,656, $132,964, or $151,164 quoted as the current threshold, the source is out of date. The same amendment also eliminated the automatic-update mechanism the 2024 rule would have used to raise the threshold on a schedule, so the federal number will not move again without a new rulemaking.

The highly compensated employee shortcut is a federal rule only. Under 29 C.F.R. 541.601(a)(1) and (b)(1) it reaches workers with total annual compensation of at least $107,432, of which at least $684 per week is paid on a salary or fee basis, and it asks only that the worker customarily and regularly perform at least one exempt executive, administrative, or professional duty. Several states, including California and New York, do not recognize a highly compensated employee exemption at all, so employers there must satisfy the full state duties and salary tests no matter how much you earn.

Several states also set a salary floor above the federal $684 per week, and the higher figure controls there. California pegs its floor to twice the state minimum wage for full-time employment (Cal. Lab. Code 515(a)), New York's varies by region, and Washington uses a multiple of the state minimum wage that rises annually. Colorado, Maine, and Alaska use their own higher thresholds. Most states simply follow the federal $684. These state figures reset every January, and Alaska adjusts mid-year, so verify the current amount for your state rather than trusting a number you saw last year.

A contract calling you an independent contractor, or a 1099 instead of a W-2, does not decide whether wage law protects you. Under the FLSA, status turns on the multifactor economic reality test, which looks at the substance of the working relationship rather than the paperwork.

Treat any confident statement about the governing federal regulation with caution right now, because it is mid-rescission and could change without warning. The 2024 rule codifying six economic-reality factors is still in the Code of Federal Regulations at 29 C.F.R. 795.110 and still governs private FLSA litigation. But DOL stopped applying it in its own investigations in Field Assistance Bulletin No. 2025-1 (May 1, 2025) and published a proposed rescission on February 27, 2026 (RIN 1235-AA46) that would readopt a modified 2021 five-factor framework treating control and opportunity for profit or loss as core factors. The comment period closed April 28, 2026, and no final rule had issued as of July 24, 2026. Courts also apply their own circuit's economic-reality precedent regardless of what the regulation says, so your circuit's case law usually matters more than the regulation does.

State law can reach further than the FLSA. California (Lab. Code 2775), Massachusetts (G.L. c. 149, s. 148B), and New Jersey apply an ABC test to state wage claims, under which you are an employee unless the hiring entity proves all three prongs, including that your work sits outside its usual course of business. The same worker can lose under the federal economic reality test and win under an ABC state's law.

Unpaid time at the edges of a shift is its own fight. The federal Portal-to-Portal Act, 29 U.S.C. 254(a) and (b), leaves preliminary and postliminary activities unpaid unless they are integral and indispensable to a principal activity. Putting on and taking off specialized protective gear the job requires is generally compensable and starts the continuous workday, but the Supreme Court held in Integrity Staffing Solutions, Inc. v. Busk, 574 U.S. 27 (2014), that a generic end-of-shift security screening is not compensable under the FLSA. Many states never adopted the Portal-to-Portal Act and answer differently: California holds exit bag-check time compensable (Frlekin v. Apple Inc., 8 Cal.5th 1038 (2020)) and Pennsylvania holds security-screening time compensable and rejects the de minimis doctrine (In re Amazon.com, Inc., 255 A.3d 191 (Pa. 2021)).

Federal law does not require your employer to give you any rest or meal break at all. What it requires is that a short break of roughly 5 to 20 minutes, if given, be counted and paid as hours worked (29 C.F.R. 785.18), and that a meal period be unpaid only if you are completely relieved of duty (29 C.F.R. 785.19). Automatic deductions for short breaks, and working through an unpaid meal period, are ordinary off-the-clock claims. Whether you are entitled to a break in the first place is state law: about ten states, including California, Colorado, Nevada, Oregon, and Washington, require a paid rest break, commonly 10 minutes per 4 hours, while most states require none for adult employees. California's 30-minute meal period, plus one hour of premium pay for a missed break (Cal. Lab. Code 226.7, 512), has no federal counterpart.

Under 29 U.S.C. 255(a) an FLSA claim must be filed within two years of accrual, extended to three years for a willful violation. Willful means the employer knew its conduct was prohibited or showed reckless disregard for whether it was (McLaughlin v. Richland Shoe Co., 486 U.S. 128 (1988)). In a collective action, the clock keeps running for each opt-in plaintiff until that person's written consent is filed with the court (29 U.S.C. 256), so a delay in joining costs recovery at the back end.

The federal window is not the outer horizon for how far back your pay records matter. State wage-claim periods run from about one year to six, and some are far more generous than the FLSA: New York allows six years and 100 percent liquidated damages (N.Y. Lab. Law 198(1-a), (3)), and California allows three years for statutory wage claims and four with an unfair-competition claim. Which clock helps you depends on where you worked, so do not throw away records that predate the federal two-year mark.

On damages, 29 U.S.C. 216(b) presumptively entitles a successful FLSA plaintiff to the unpaid wages plus an equal amount as liquidated damages, effectively doubling the recovery, and a court that awards judgment to an FLSA plaintiff must also award reasonable attorney's fees and costs. The doubling is not automatic: under 29 U.S.C. 260 a court may reduce or deny liquidated damages if the employer proves it acted in good faith and had reasonable grounds to believe it was complying. State liquidated-damages rules run on their own track and are sometimes more generous.

When the employer's records are bad, the law shifts the weight off you. Under Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946), if the employer failed to keep accurate wage and hour records, you need only prove the work was performed and show its amount and extent as a matter of just and reasonable inference; the burden then moves to the employer to produce precise evidence or negate the inference. That is why your own contemporaneous notes, calendars, and shift logs carry real evidentiary weight. The FLSA separately requires employers to keep payroll records for three years and underlying wage-computation records such as time cards and work schedules for two years (29 C.F.R. 516.2(a), 516.5, 516.6).

Enforcement is not only private. The Department of Labor's Wage and Hour Division recovered more than $259 million in back wages for 176,957 workers in fiscal year 2025, an average of about $1,465 per worker.

There is no federal law requiring your employer to pay a departing employee's final paycheck by any particular date. The FLSA requires that all wages owed be paid, and the Department of Labor's guidance is that the default is your next regular payday. Any earlier deadline comes from state law only, and the spread is wide. California requires payment immediately on discharge, and within 72 hours when an employee quits without notice, backed by a waiting-time penalty of up to 30 days of wages (Cal. Lab. Code 201(a), 202(a), 203). Louisiana requires payment by the next regular payday or within 15 days of discharge, whichever comes first (La. R.S. 23:631(A)(1)(a)). Several states, including Alabama, Florida, Georgia, and Mississippi, have no final-pay statute at all, so the next-payday default is what applies. At the slow end sit states that have no separation-specific deadline and fold final wages into a fixed semimonthly payday schedule, which can push payment roughly 30 days out. Verify the rule for the state where you actually worked, and verify it again each legislative session, because these statutes move.

Unused vacation and PTO are a separate question with a similar answer. The FLSA does not require payment for time not worked, so there is no federal right to vacation pay, sick pay, holiday pay, or severance, and no federal right to have accrued PTO cashed out at separation. State law and your employer's own written policy are where those rights come from, if they exist for you at all. Payout of accrued vacation is required in California, Colorado, Illinois, Massachusetts, and several other states, and in many states it is not required unless your employer's own policy or your contract says so. Severance follows the same pattern: most states leave it to contract, but a few require it in covered plant closings or mass layoffs, including Maine at one week's pay per year of service (26 M.R.S. 625-B) and New Jersey at one week per year of service in a covered mass layoff even when full 90-day notice is given (N.J.S.A. 34:21-2). Get the written policy before you assume either way.

Pay stubs work the same way. No federal law requires an employer to hand you one. The FLSA requires the employer to keep accurate records; it does not require the employer to give them to you. Any right to receive an itemized wage statement comes from state law, and the required content and timing differ sharply among the states that have such a law. California requires a detailed itemized statement at each payment of wages, a number of states impose no pay-statement duty at all, and new state pay-statement laws are being added frequently. Because pay stubs are the core evidence in nearly every wage claim, request them and keep them regardless of what your state requires.