Do You Know These Loopholes About Earning Minimum Wage?

by Travis Pizel · 9 comments

My son turned 16 this past January and is now looking for his first part-time job. I’m constantly on the lookout for signs that employers are hiring, so I can relay that information to my son and encourage him to submit an application.

During one of our conversations about entering the workforce, my son asked how much he could expect to earn per hour. There are a lot of recent changes to the minimum wage laws in my state, so I decided to do a little investigation together.

Federal Minimum Wage Exceptions

According the Department Of Labor’s website, the federal minimum wage is $7.25 per hour. However, there are a few exceptions to this rule:

  • Youth Minimum Wage: A person under the age of 20 can be paid a reduced minimum wage of $4.25 per hour for the first 90 days of employment. After that 90 days the wage must be increased to the federal minimum wage and that employee cannot be fired to hire a different employee at the reduced minimum wage rate.
  • Tipped Workers: An employee that earns tips must be paid an minimum of $2.13 per hour with enough tips to equal $7.25 an hour.
  • State Minimum Wage Laws: If a state has a minimum wage higher than the federal minimum wage, the higher wage must be paid.

This was good information, however we needed to find out whether our great state of Minnesota had its own minimum wage laws. Doing some more research, I found a government article that lists their minimum wage laws state-by-state.

Minimum Wage Laws by State

The laws vary by each state, and some states don’t even have their own minimum wage law. For our state, the law is as follows:

  • Large Employer (annual receipts > $500,000): $8.00 per hour
  • Small Employer (annual receipts < $500,000): $6.50 per hour

The companies that my son has applied with are definitely large employers. I could see the wheels turning in his head as he used the numbers to calculate how much he would earn by working 10-15 hours a week.

If you’re looking for work, or have a teenager who is just getting started in the workforce, it’s important to understand that minimum wage laws vary by state.

With the current state of the economy, employers may or may not be offering starting wages higher than the minimum wage. But by looking into our state’s specific minimum wage law we were able to calculate how much my son would earn when he gets his first job.

In addition, we know what his rights for payment are and can be sure to make his first job experience a successful one.

How does your state’s minimum wage law compare? What loopholes qualify you to receive higher pay?

Money Saving Tip: An incredibly effective way to save more is to reduce your monthly Internet and TV costs. Click here for the current Verizon FiOS promotion codes and promos to see if you can save more money every month from now on.

{ read the comments below or add one }

  • Linda James says:

    Parents are advised to look at child’s first pay stub to be certain they are being paid wages, with Social Security and Medicare withheld–not being paid as a self-employed contractor.

    I would also advise parents to watch for Federal and State withholding. If the child needs to file an income tax return to have these amounts refunded, be sure the child doesn’t claim an exemption for themselves…..

  • Stefanie @ The Broke and Beautiful Life says:

    I wish they wrote that stat about minimum wage on tipped positions on restaurant menus- or did away with tipping altogether and put the onus on employers to pay their employees a living wage rather than on the customers.

    • Travis @enemyofdebt.com says:

      I’d vote for getting rid of tipping. It’s out of control, and completely random and impossible to know when and how much to tip. Hotels even seem to CREATE positions purely to get tips. It’s just dumb. Pay the employee for the job they do, and call it a day.

  • Kayla @ Everything Finance says:

    I didn’t know about some of these loopholes. Interesting information. Thanks for sharing!

    • Travis @enemyofdebt.com says:

      Sure thing, Kayla…..glad you got something positive from the post. Thanks for commenting!

  • Janeen says:

    These are good considerations. I honestly haven’t thought much about minimum wage since I worked outside our home several years ago. We’ll have some boys looking for employment in a few years, so we’ll need to revisit that. I’m a huge fan of young adults finding employment (particularly employment in a field that matches their talents). Kudos on raising a son who doesn’t expect to slide through his teenage years on his parents coat tails!

    • Travis @enemyofdebt.com says:

      Well, I don’t know if he expected it or not….but if he was he’s in for a rude awakening, Janeen. LOL. I think he’s excited about being able to make a bit more money…..as for enjoying a job, that’s something he’ll have to learn too!

  • Brian @DebtDiscipline says:

    Good information. We have soon to be 16 years olds and I’ll need to look into our states wage information.

    • Travis @enemyofdebt.com says:

      Thanks for reading, Brian….it’s quite an adventure having your kids enter the workforce. My son actually has an interview tomorrow!

Leave a Comment