The history of minimum wage laws in the United States runs from a 1912 Massachusetts statute, through a Supreme Court doctrine that treated wage floors as unconstitutional, to the Fair Labor Standards Act of 1938 and a federal rate that has sat at $7.25 per hour since July 2009. That $7.25 stretch is now the longest period without an increase since the federal wage was created.
The First State Laws
Massachusetts enacted the country’s first minimum wage law in 1912. The statute set up state-supervised wage boards charged with fixing rates that would cover the basic cost of living. Within about eight years, roughly a dozen other states and the District of Columbia had passed their own versions. Most of these early laws applied only to women and minors, groups the legislatures treated as having the least bargaining power against employers.
The laws ran straight into a constitutional problem. Courts of that era read the Due Process Clauses to protect a “freedom of contract” between employer and adult worker, and they treated the right to negotiate the terms of your own labor as nearly untouchable. A statute telling a private employer what it had to pay was the most direct challenge imaginable to that view.
In 1923, the Supreme Court decided Adkins v. Children’s Hospital, striking down a minimum wage law that covered women in the District of Columbia. The Court held that a mandatory wage floor infringed on the right to freely negotiate an employment contract. Adkins effectively froze new state legislation for more than a decade; any similar law was presumed dead on arrival, and a federal wage standard was off the table entirely.
The 1937 Reversal
The Great Depression changed the ground under the doctrine. With mass unemployment and collapsing pay, the notion that a worker could simply bargain for better terms lost its persuasive force. In 1937, the Supreme Court reversed itself in West Coast Hotel Co. v. Parrish, upholding a Washington State minimum wage law for women and explicitly overruling Adkins.
The Court’s reasoning was direct. Workers in unequal bargaining positions were, in its words, “relatively defenseless against the denial of a living wage,” and when employers paid below subsistence, the shortfall shifted onto taxpayers who funded public relief. The majority pointed to the “unparalleled demands for relief” during the Depression as evidence that unregulated wages produced a public burden. That decision opened the constitutional door for both state and federal wage legislation.
The Fair Labor Standards Act of 1938
Congress moved quickly. The Fair Labor Standards Act, passed in 1938, set the first federal minimum wage at 25 cents per hour, established a 44-hour maximum workweek with overtime pay beyond that limit, and restricted child labor. It was the first nationwide floor on what employers could pay.
The original reach was narrow. Coverage extended only to employees directly engaged in interstate commerce or producing goods for commerce, and the exemptions were long: agricultural workers, retail and service employees, seamen, air carrier employees, and fishing industry workers, among others, were excluded. In practice, the FLSA initially covered only about one-fifth of the labor force.
The Act’s own constitutionality was tested almost immediately. In United States v. Darby (1941), the Supreme Court unanimously upheld the FLSA, holding that the Commerce Clause gave Congress broad authority to regulate labor standards for goods shipped across state lines. Any lingering doubt about federal power over private employment conditions was settled.
Rate Increases and Expanding Coverage
Once the constitutional question was closed, Congress steadily raised the rate and pulled more workers under the law. The wage rose to 75 cents in 1950 and to $1.00 in 1956.
The 1961 amendments introduced “enterprise coverage,” a conceptual shift away from testing each employee’s individual connection to interstate commerce. Under the new standard, all employees of a business that met certain size thresholds and had some involvement in interstate commerce were covered. Large retail and service employers came under the FLSA for the first time.
The 1966 amendments added certain farmworkers and extended protections to state and local government employees in hospitals and schools. The 1974 amendments went further, covering domestic service workers and nearly all remaining state and local government employees. By the late 1970s, the FLSA reached the vast majority of American workers.
The Long Federal Freeze
The pattern of regular increases broke in the 1980s. After Congress raised the rate to $3.35 per hour in January 1981, it sat untouched for nine years. The wage climbed to $3.80 in 1990 and $4.25 in 1991, then froze again: from September 1997 through July 2007, it stayed at $5.15 for a full decade.
The most recent federal increase came through the Fair Minimum Wage Act of 2007, which stepped the rate up from $5.85 to $6.55 to $7.25 by July 2009. It has not moved since. Proposals to raise it have been introduced repeatedly, including the Raise the Wage Act reintroduced in 2025, but none have become law.
Purchasing Power
Because the federal minimum wage is a fixed dollar figure rather than an indexed rate, its real value falls every year it holds still. Its peak purchasing power came in 1968, when the $1.60 rate was worth considerably more in inflation-adjusted terms than $7.25 is today. By some estimates, the 1968 wage would equal roughly $12 or more in recent dollars. The current federal rate buys less than at nearly any point since the late 1950s.
Subminimum Wage Categories
The FLSA permits several categories of workers to be paid below $7.25, and each has its own history.
Tipped employees can be paid a cash wage as low as $2.13 per hour, provided tips bring total pay to at least $7.25. The $5.12 gap is known as the “tip credit,” and the employer must cover any shortfall in a workweek where tips fall short. The $2.13 cash wage has not changed since 1991.
Workers under 20 can be paid $4.25 per hour during their first 90 consecutive calendar days on the job. The 90 days run on the calendar, not on days actually worked, so time off counts. When either the 90-day window closes or the worker turns 20, the full minimum wage applies.
Section 14(c) of the FLSA lets employers holding special Department of Labor certificates pay workers with disabilities below the minimum wage. The program has drawn decades of criticism. In 2024, the Department of Labor proposed phasing out Section 14(c) certificates entirely, then withdrew the proposal in July 2025 after concluding it likely lacked the statutory authority to end the program on its own. As of 2026, the certificates continue under existing regulations and cover roughly 40,000 workers.
Where the States Stand Now
The federal freeze has pushed the action to the states. As of January 2026, more than 30 states and the District of Columbia set minimum wages above $7.25. Rates run from $8.75 at the low end to $17.95 per hour in Washington, D.C. Washington State, California, and Colorado are among those with rates above $15.00, and several states index their wages to inflation or a cost-of-living measure so they adjust automatically.
When a state or local rate is higher than the federal rate, the employer pays the higher amount. About 20 states either have no state minimum wage law or have set the state rate at or below the federal floor, leaving $7.25 as the effective wage for covered workers there. A worker earning the minimum in Washington State takes home more than double what a minimum wage worker earns in a state that follows the federal rate.
What Enforcement Looks Like
An employer that fails to pay the minimum wage owes the affected workers their unpaid wages plus an equal amount in liquidated damages, effectively doubling the liability. A court may reduce the liquidated damages if the employer proves the violation was made in good faith with a reasonable belief that it was lawful, which is a hard showing to make. A worker has two years from the date of the violation to file a claim, and three years if the violation was willful. The Department of Labor can also impose civil money penalties of up to $2,515 per violation for repeated or willful infractions, and willful violations can carry criminal fines up to $10,000, with up to six months in prison on a second conviction.