A living wage is the minimum income deemed necessary for a worker to meet their basic needs. The U.S. poverty level for a family of four was an income of $30,000 in 2023 which works out to $14.42 per hour, well above the minimum wage at the federal level. Critics argue that the federal minimum wage has failed to keep up with the cost of living since the late 1960s.

• If any payment or remuneration is made for work done, the intern is likely to be regarded as a worker for minimum wage purposes.
• As this amount is ‘sacrificed’ by the worker, it reduces their pay and so cannot be used as part of their pay for minimum wage purposes.
• The government said the increase means it has reached its long-term goal to make the National Living Wage equal to two-thirds of median hourly pay for those aged 21 and over.
• California restaurant chain owners and franchisees say that higher labor costs will force them to raise prices, add automation, cut workers’ hours or even close shop.
• This is provided the payment is not made in order to comply with a contractual requirement.
• Katerina is studying at teacher training college to become a primary school teacher.

She is working as a result of arrangements made between a charity and a voluntary organisation and in such circumstances voluntary workers may receive monetary payment for subsistence provided it is reasonable in the circumstances. You cannot reimburse accommodation costs, such as rent, to voluntary workers. However, you can provide voluntary workers directly with reasonable accommodation in the circumstances of their role. The term ‘intern’ is not defined in minimum wage legislation so it is important to establish the nature of the relationship between the individual and the employer when deciding whether the intern is a worker or not for minimum wage purposes. This sets out that employers must sign a contract of employment and an apprenticeship agreement with the apprentice, as well as a commitment statement with the apprentice and training provider.

Laws on this Topic

Office holders may be appointed to a position by a company or organisation but do not have a contract or receive regular payment. You should also consider the other expenses and benefits in kind that the voluntary worker is receiving. For example, if breakfast is being provided to a voluntary worker then subsistence payments should not include money for breakfast. He agrees orally with the editor that he will work personally for 4 days a week from 9am to 5pm for 6 weeks during the summer. He will undertake research activities to provide background information on news stories and provide some written content for publication, often to tight deadlines. In return, he is assigned to an editor who will ensure he receives daily on the job journalism training.

Almost half a million workers in the UK whose employers are signed up to real living wage are receiving an increase in pay to £12 an hour across the UK and £13.15 in London. The difference could pay for 18 weeks of food for a household, or 12 weeks of housing and energy costs. The federal minimum wage provisions are contained in the Fair Labor Standards Act (FLSA). Some state laws provide greater employee protections; employers must comply with both. A small change in the price for low-wage labor could have a large effect on employer demand, they say, leading to increasing unemployment among low-wage workers. Critics note that minimum wage laws may also lead to job outsourcing in which companies may decide to move their facilities to countries where labor costs are lower.

Which State Has the Lowest Minimum Wage?

The separate apprentice rate, which applies to eligible people under 19 – or those over 19 in the first year of an apprenticeship – will be £6.40 an hour, up from £5.28. The UK’s Gini coefficient, which measures wage inequality, tallies at 35, near its 2007 peak, higher than any EU country except Latvia and Lithuania. We’re calling for a minimum wage of 15 pounds ($18.93) as soon as possible,” he said, stressing that average pay packets have flatlined in real terms over the past 15 years by failing to keep up with consumer prices.

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. The Fair Labor Standards Act (FLSA) established the minimum wage which is $7.25 per hour as of January 2024. The government periodically assesses the federal minimum wage level but the rate has not increased since July 2009. Individual states, cities, and localities can pass minimum wage requirements that are different from the federal rate as long as their rate is higher than the federal minimum wage.

Calculating the minimum wage

Often this will be a legitimate practice, but some employers may use unpaid trial work periods to obtain work or services for which at least the minimum wage should be paid. Current law does not define a “trial work period” or state precisely when at least the minimum wage must be paid. See National Minimum Wage and National Living Wage rates for information on rates. You must pay people who do work for you at least the minimum wage if they are a ‘worker’ for minimum wage purposes and a specific exemption does not apply.

Any deduction or payment to the employer in respect of this amount will reduce the worker’s pay for minimum wage purposes. Employers are entitled to make certain deductions which will not reduce a worker’s pay for minimum wage purposes, for example, sums owed to a third party by the worker under an Attachment of Earnings Order. However, any administration charges or fees applied by the employer for handling these transactions will reduce the worker’s pay for minimum wage purposes. These fees or charges are deemed to be for the use and benefit of the employer. This continues to be the case even where you are legally ordered to make the deduction which is to be paid to the third party (such as where there is an attachment of earnings order made by a court). Certain deductions made by you from a worker’s pay, or payments made by the worker to you, reduce pay for minimum wage purposes.