United States — Wage & Hour

The Fair Labor Standards Act of 1938 (FLSA) establishes federal minimum wage, overtime pay, recordkeeping, and child labor standards affecting employees in the private sector and in federal, state, and local governments. The Act is codified at 29 U.S.C. § 201 et seq. and is administered and enforced by the U.S. Department of Labor, Wage and Hour Division (WHD). The FLSA provides a federal baseline for worker protections—states may enact more protective standards but may not reduce or waive FLSA minimums.

Material regulatory developments as of June 2026:

• On May 15, 2026, the U.S. Department of Labor issued a technical amendment reinstating the 2019 salary thresholds for the executive, administrative, and professional (EAP) exemptions after the 2024 rule was vacated. The minimum salary is now $684 per week ($35,568 per year) for EAP-exempt employees, and $107,432 per year for highly compensated employees. These thresholds are in effect as of the amendment date and remain subject to further litigation or regulatory action.
• On January 5, 2026, the Wage and Hour Division released six new opinion letters (FLSA-2026-1 through FLSA-2026-4 and others) clarifying regulatory questions including the learned professional exemption, regular rate and bonus calculations, roll-call time compensation, and overtime computations involving state minimum wage preemption. These letters may impact the practical application of FLSA coverage and exemption interpretations.
• On April 22, 2026, DOL published a Notice of Proposed Rulemaking for a unified standard of joint employer status under the FLSA, FMLA, and MSPA. The proposal delineates vertical versus horizontal joint employment and introduces a four-factor test for vertical joint employment scenarios, explicitly excluding certain routine business practices from consideration. The comment period closed June 22, 2026; practitioners should monitor for final rules, as changes may significantly impact employer coverage and liability.
• The DOL continues to issue opinion letters and regulatory guidance that may inform employer obligations; practitioners should monitor the DOL site for the latest material updates, especially where recent court decisions have vacated or altered rulemakings.

For compliance, practitioners should reference the current FLSA statute and latest DOL Wage and Hour Division publications, including opinion letters and regulatory changes from 2026. The statutory text at Title 29, Chapter 8 of the United States Code and the official DOL Wage and Hour Division FLSA webpage remain the controlling sources.

Source: 29 U.S.C. § 201; DOL Wage and Hour Division — FLSA; DOL NPRM Joint Employer Status Under FLSA, FMLA, MSPA; DOL Newsroom — WHD Opinion Letters January 2026

The Fair Labor Standards Act establishes a federal minimum wage of $7.25 per hour for covered nonexempt employees. This rate took effect on July 24, 2009, under the Fair Minimum Wage Act of 2007 (enacted as part of the U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007). The increase to $7.25 was the final step in a three-stage phase-in: $5.85 per hour beginning on the 60th day after May 25, 2007; $6.55 per hour beginning 12 months later; and $7.25 per hour beginning 24 months after that initial effective date.

Congress has not raised the federal minimum wage since July 24, 2009. The FLSA does not index the minimum wage to inflation or provide for automatic annual adjustments; any change requires an act of Congress amending 29 U.S.C. § 206(a)(1).

State-law overlay. When an employee is subject to both federal and state minimum wage laws, the employee is entitled to the higher of the two rates. As of 2026, more than 30 states and the District of Columbia have enacted minimum wages above $7.25 per hour, with many indexing annually for inflation. Employers operating in those jurisdictions must pay at least the state rate for hours worked in that state. The federal $7.25 floor applies only when state law is silent, sets a lower rate, or exempts the employee from state minimum-wage protection.

Coverage. The FLSA minimum wage applies to employees who are (1) engaged in interstate commerce or in the production of goods for interstate commerce (individual coverage under 29 U.S.C. § 206(a)), or (2) employed by an enterprise engaged in commerce or in the production of goods for commerce with annual gross volume of sales or business done of at least $500,000 (enterprise coverage under 29 U.S.C. § 203(s)(1)(A)(ii)). Federal, state, and local government employees are also covered. The Act exempts certain categories of employees from the minimum wage, including bona fide executive, administrative, and professional employees who meet both the salary-basis test and the duties test under 29 C.F.R. Part 541.

Sub-minimum wages. The FLSA authorizes several sub-minimum wage rates in narrow circumstances. Employers may pay newly hired employees under age 20 a youth minimum wage of $4.25 per hour during the first 90 consecutive calendar days of employment (29 U.S.C. § 206(g)(1)). Tipped employees may be paid a cash wage as low as $2.13 per hour if the employee's tips make up the difference to reach the full $7.25 minimum (the "tip credit" under 29 U.S.C. § 203(m)). Employers holding special certificates from the Department of Labor may pay sub-minimum wages to workers with disabilities whose earning or productive capacity is impaired by a physical or mental disability (29 U.S.C. § 214(c)). Full-time students employed by retail or service establishments, agriculture, or institutions of higher education may be paid 85 percent of the minimum wage under certificates issued by the Wage and Hour Division (29 U.S.C. § 214(b)).

Source: 29 U.S.C. § 206; DOL — Wages and the Fair Labor Standards Act