Federal and state minimum wage laws guarantee workers a floor below which hourly compensation cannot fall. When employers pay less than required minimums through direct underpayment, illegal deductions, or other schemes, workers can recover unpaid wages plus additional damages through wage claims and lawsuits.
Understanding Minimum Wage Requirements
The federal minimum wage sets a baseline that all covered employers must meet, though many states and localities have enacted higher minimums. When federal, state, and local minimums differ, employers must pay the highest applicable rate. Understanding which rates apply to your situation helps identify whether your pay meets legal requirements.
Some workers receive subminimum wages legally under specific circumstances. Tipped employees may be paid below standard minimums if tips bring their total to at least the regular minimum. Youth workers may receive training wages for limited periods. These exceptions have specific requirements, and employers violate the law when they apply exceptions incorrectly or to ineligible workers.
How Minimum Wage Violations Occur
Direct payment below minimum wage happens but is relatively rare because it's obviously illegal. More commonly, violations occur through schemes that reduce effective hourly rates below minimums. Required purchases of uniforms, tools, or equipment that bring wages below minimum violate the law. Illegal deductions for cash shortages, breakage, or walkouts similarly create violations.
Piece rate and commission systems can produce minimum wage violations when total compensation divided by hours worked falls below minimum wage. Employers must ensure that however pay is calculated, total earnings per hour meet minimum requirements. When piece rates or commissions produce subminimum pay, employers must make up the difference.
Tipped Employee Minimum Wage
Tipped employees may receive a lower direct wage from employers if tips bring their total hourly compensation to at least the regular minimum. However, employers must ensure that the combination of wages and tips meets minimum wage for each workweek. When tips are insufficient, employers must make up the shortfall.
Tip credit violations are common. Employers cannot claim tip credits for time spent on non-tipped duties exceeding certain thresholds. Requiring tip pooling with non-tipped employees like managers or back-of-house staff can invalidate tip credits. Improper tip credit claims convert apparent compliance into minimum wage violations.
Recovering Minimum Wage
Workers can recover the difference between what they were paid and what minimum wage required for the applicable period. The FLSA provides for liquidated damages equaling the unpaid amount, effectively doubling recovery unless employers prove good faith. State laws may provide additional penalties and longer recovery periods.
Attorney fees go to prevailing plaintiffs in minimum wage cases, making it practical to pursue claims that might otherwise be too small to justify litigation costs. Class actions combining multiple workers' claims efficiently address widespread violations while making legal representation economically viable.
Retaliation Is Prohibited
Employers cannot fire, demote, or otherwise retaliate against workers who complain about minimum wage violations or file claims. These protections apply whether complaints are internal to the employer or filed with government agencies. Workers who suffer retaliation have additional claims for damages caused by the retaliatory conduct.