Federal minimum wage (US)

A floor that mostly is not the floor

The $7.25 federal rate still governs in a shrinking set of states, while the operative minimum for most employers is state or local: Washington leads the states at $17.13 for 2026, with DC at $17.95, and city rates run higher again (Seattle above $21, and Tukwila, Washington, the national high mark). Tipped work adds its own federal sub-minimum ($2.13 plus tips to reach the floor), which many states have narrowed or abolished. The rule for employers is mechanical: the highest applicable rate wins, checked per work location, every year.

The annual-motion problem

Most state and city minimums now index or step annually (January being the common date), so a compliant pay scale is a dated document. The practical exposures are the quiet ones: a multi-state pay band that dips below one state's new January rate, remote hires in cities nobody checked, and salaried-exempt staff in states whose exempt salary floors move with the minimum wage.

Contractor rates, corrected

Federal contractor minimums deserve care because the position changed twice recently: the 2021 executive order that had pushed covered contractor pay toward $17.75 was revoked in March 2025, while the older 2014 order survives at lower rates. Contractors pricing multi-year federal work should verify the currently operative order rather than citing either headline figure from memory.