Since July 2009, the federal minimum wage in the USA has been set at $7.25 per hour. However, the reality for international businesses looking to source talent from the United States is a bit more complex. Many individual states feature their own minimum wage laws that must be observed, requiring an extra level of attention to detail during the hiring process.

The following page outlines the minimum wage in the USA, and how it varies by state and type of work. It also discusses how an employer of record (EOR) platform like Skuad can help businesses like yours manage these variations.

Variances by State

Although the United States has a federally mandated minimum wage, one of the challenges of employing minimum wage employees in the United States is that many states choose to provide a higher minimum wage to accommodate a higher standard/cost of living.

The table below outlines each of the 50 states and their respective minimum wages, in alphabetical order:
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Special Cases

Washington, D.C.
Although not technically a state, residents of Washington, D.C., enjoy a minimum wage of $17.50.‍
Ohio
Minimum wage in Ohio is based on the annual gross income of the employer:

Annual Gross Income	>$394,000	<$394,000
Pay	$7.25	$10.70

Oregon
Minimum wage in Oregon is based on geographic region and is updated annually in July. The numbers below were set in 2024.

Standard	Portland Metro	Nonurban Counties
$14.70	$15.95	$13.70

Florida: Minimum wage is currently $13.00, but with scheduled increases in the next two years
- $14 as of 9/30/2025
- $15 as of 9/30/2026
Hawaii: Minimum wage is currently $14.00, but with scheduled increases in the next three years
- $16 as of 1/1/2026
- $18 as of 1/1/2028
Michigan: Minimum wage is currently $10.56, but with scheduled increases in the next three years
- $12.48 as of 2/21/2025
- $13.29 as of 2/21/2026
- $14.16 as of 2/21/2027
- $14.97 as of 2/21/2028
Nebraska: Minimum wage is currently $13.50, but with scheduled increases in the next two years
- $15 as of 1/1/2026

American Territories

In addition to the 50 states, the United States also holds domain over several territories around the world. The minimum wage can also vary here, as demonstrated below:

American Samoa: Minimum wages are industry-specific and set to increase every 3 years until they reach the federal minimum wage of $7.25.
Guam: $9.25
Northern Mariana Islands: $7.25
Puerto Rico: $10.50‍
Virgin Islands: $10.50

Laws Governing Minimum Wage in the USA

The United States protects workers with a litany of labor laws on both the federal and state levels. However, the central document determining minimum wage is the Fair Labor Standards Act. This act determines:

Basic wage standards
Who is covered
Sub-minimum wage provisions
Youth minimum wage

Youth Minimum Wage

During their first 90 days of employment, employers can choose to pay employees under the age of 20 $4.25 an hour. This is also sometimes referred to as a “federal training wage.” Employers are prohibited from displacing or removing employees to hire new ones for a cheaper wage.

Get the latest updates on miminum wages in USA. Talk to our experts.

Minimum Wage for Tipped Employees

Employees working in positions that regularly receive tips collect a lower minimum wage in the US. Employers often take advantage of this differential to cut costs and pad their bottom line.

The minimum federal wage for tipped employees is $2.13. However, several states have passed laws affecting these rates as well, as depicted in the chart to the right.

The minimum wage for tipped employees in the United States breaks down as follows:

Minimum Wage: Tipped Employees (US)

Alabama	$5.12	Maine	$7.33	Oregon	$14.70
Alaska	$11.91	Maryland	$3.36	Pennsylvania	$2.83
Arizona	$11.70	Massachusetts	$6.75	Rhode Island	$3.89
Arkansas	$2.63	Michigan	$4.01	South Carolina	$2.13
California	$16.50	Minnesota	$11.13	South Dakota	$5.75
Colorado	$11.79	Mississippi	$2.13	Tennessee	$2.13
Connecticut	$16.35	Missouri	$6.88	Texas	$2.13
Delaware	$2.23	Montana	$10.55	Utah	$2.13
Florida	$9.98	Nebraska	$2.13	Vermont	$7.01
Georgia	$2.13	Nevada	$12.00	Virginia	$2.13
Hawaii	$12.75	New Hampshire	$3.27	Washington	$16.66
Idaho	$3.35	New Jersey	$5.62	West Virginia	$2.62
Illinois	$9.00	New Mexico	$3.00	Wisconsin	$2.33
Indiana	$2.13	New York	$15.50	Wyoming	$2.13
Iowa	$4.35	North Carolina	$2.13
Kansas	$2.13	North Dakota	$4.86
Kentucky	$2.13	Ohio	$5.35
Louisiana	$2.13	Oklahoma	$2.13

Average Income in the USA

As per the most recent data on Forbes, the average annual income in USA is $59,428 and the average hourly income nationwide is $28.34.

However, the average monthly income in USA differs based on the region, industry and roles.

Now, let’s look at the state-wise breakdown of average income.

Average Income in USA - State-wise Breakdown

State	Annual Average Income	Average Hourly Income
Alabama	$50,620	$24.32
Alaska	$66,130	$31.79
Arizona	$58,620	$28.18
Arkansas	$48,570	$23.35
California	$73,220	$35.20
Colorado	$67,870	$32.63
Connecticut	$69,310	$33.32
Delaware	$62,260	$29.93
Florida	$55,980	$26.91
Georgia	$58,000	$27.88
Hawaii	$61,420	$23.35
Idaho	$51,350	$24.69
Illinois	$63,930	$30.73
Indiana	$53,500	$20.24
Iowa	$53,520	$25.73
Kansas	$52,850	$25.41
Kentucky	$51,490	$24.76
Louisiana	$50,940	$24.49
Maine	$55,960	$26.90
Maryland	$69,750	$33.53
Massachusetts	$76,600	$36.83
Michigan	$58,000	$27.88
Minnesota	$63,640	$30.60
Mississippi	$45,180	$21.72
Missouri	$54,520	$26.21
Montana	$52,200	$25.11
Nebraska	$55,070	$26.48
Nevada	$55,490	$26.68
New Hampshire	$62,550	$30.07
New Jersey	$70,890	$34.08
New Mexico	$54,400	$26.15
New York	$74,870	$36.00
North Carolina	$56,220	$27.03
North Dakota	$55,800	$26.83
Ohio	$56,530	$27.18
Oklahoma	$50,940	$24.49
Oregon	$62,680	$30.14
Pennsylvania	$58,470	$28.11
Rhode Island	$64,530	$31.03
South Carolina	$50,650	$24.35
South Dakota	$49,890	$23.99
Tennessee	$52,820	$25.39
Texas	$57,300	$27.55
Utah	$57,360	$27.58
Vermont	$59,190	$28.46
Virginia	$65,590	$31.54
Washington	$72,350	$34.79
West Virginia	$49,170	$23.64
Wisconsin	$56,120	$26.98
Wyoming	$54,440	$26.17

Hiring With the Minimum Wage in the USA

As you can see, the greatest challenge of hiring minimum-wage workers in the USA is the country's vast size. Due to the high number of state and local governments that have enacted their own laws around labor laws including the minimum wage, maintaining compliance can prove challenging.

Employers hiring talent in the USA essentially have two options:

Hire Directly		Use an Employer of Record (EOR)
Pros	Greater control over employee management	EOR handles compliance for you
Pros	Greater control over employee management	Less expensive over time than hiring new employees
Cons	More costly due to hiring multiple accountants and HR reps	Less control over employee management
Cons	Greater liability for the employer	Less control over employee management

Working through an EOR like Skuad provides business owners with the tools to manage every step of adding new employees to their company, whether minimum wage or salaried professionals. Use our Employee Cost Calculator for an immediate estimate.

Hire

Working through an EOR platform like Skuad provides employers with the ability to create country-specific employment contracts, as well as facilitate the transfer of any necessary equipment for onboarding.
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Hiring Minimum Wage Roles in the USA? Talk to Our Experts

The complexity of labor laws can make hiring for minimum wage in the USA difficult, especially with the addition of local and state regulations. That’s why we’ve taken great pains to create an easy-to-use, all-in-one solution designed for business owners to grow their operations across borders. Talk to one of our experts today to see how Skuad can integrate with your existing operations.

Minimum Wage in the USA

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