Federal Law The federal Fair Labor Standards Act generally requires employers of covered employees who are not otherwise exempt to pay these employees a minimum wage of not less than $7.25 per hour.   Youths under 20 years of age may be paid a minimum wage of not less than $4.25 an hour during the first 90 consecutive calendar days of employment with an employer. Employers of tipped employees (i.e., those who customarily and regularly receive more than $30 a month in tips) may consider such tips as part of their wages, but employers must pay a direct wage of at least $2.13 per hour if they claim a tip credit. They must also meet certain other requirements. In cases where an employee is subject to both the state and federal minimum wage laws, the employee is entitled to the higher of the two minimum wages. Be sure to also comply with any city or other local wage requirements (which may be higher than the state or federal minimum wage) that may apply to your business.