The rate
29 U.S.C. 206(a)(1)(C) sets the federal minimum wage at $7.25 per hour. This is the floor under the Fair Labor Standards Act for covered employees.
Watch for $10.875 on the exam. That is 1.5 × $7.25, the overtime rate for a minimum-wage worker, not the minimum wage itself.
When it took effect
The $7.25 rate took effect on July 24, 2009. Under 29 U.S.C. 206, it began 24 months after the 60th day after May 25, 2007, and the DOL confirms that date as July 24, 2009.
The statute phased the increase in over three steps, and the earlier steps are the traps:
- $5.85 took effect July 24, 2007.
- $6.55 took effect July 24, 2008.
- $7.25 took effect July 24, 2009, and replaced both earlier steps.
May 25, 2007 is the enactment reference date the 60 days were counted from. It is not an effective date for any rate. If an answer pairs $7.25 with 2007 or 2008, it has mixed up the steps.
Minimum wage plus overtime
A minimum-wage worker who goes over 40 hours in a workweek still earns the 1.5 times premium under 29 U.S.C. 207, and here the regular rate is the minimum wage itself.
Example: a laborer at the federal minimum works 44 hours.
- Straight time: 40 × $7.25 = $290.00
- Overtime rate: 1.5 × $7.25 = $10.875
- Overtime pay: 4 × $10.875 = $43.50
- Total: $290.00 + $43.50 = $333.50
The wrong totals and why
- $319.00 pays all 44 hours at straight time (44 × $7.25) and leaves out the overtime premium.
- $290.00 pays only the first 40 hours and ignores the 4 extra hours entirely.
- $478.50 pays all 44 hours at $10.875, but only hours over 40 earn overtime.
The pattern is the same for every pay calculation: straight time on the first 40 hours, 1.5 times the regular rate on each hour over 40, then add the two.