Minimum wage legislation may be passed under federal law. In the United States and Canada, specific states, provinces and territories can also determine the lowest amount that an employee can be paid for his or her work. European countries set their minimum wage amounts at a national level for adults employed on a full-time basis.
Labor laws for workers determine much more than the minimum amount that the labor force in a specific jurisdiction will be paid. Minimum wage legislation may outline different pay rates for people who work in industries where tips make up a regular part of their earnings. A person working in these types of service jobs would receive a lower hourly wage than the standard minimum rate of pay on the understanding that the difference will be made up in tips. Minimum wages statutes may also address the maximum number of hours that an employee can work before being paid overtime rates.
The Fair Labor Standards Act is the federal minimum wage legislation which applies to employees in the United States. Along with setting a minimum wage for workers nationwide, this law also requires employers to display a poster explaining the employees' rights under the legislation in the workplace. The provisions of the law also require employers to maintain records of employee hours worked and the amount each person was paid.
Most states in the U.S. also have their own minimum wage legislation in place. In cases where the state minimum wage rates are lower than the amount prescribed by law at the federal level, workers are entitled to be compensated at the federal minimum wage amount. If the state minimum wage is higher than the one set under federal law, the level set by the state applies.
In Canada, the provinces and territories are all responsible for passing their own minimum wage legislation. This amount varies, depending on the jurisdiction. Federal government employees are subject to the minimum wage laws in the province where they work.
Minimum wage legislation in Europe is determined by each country. The rate of pay for adult workers is determined independently, and it applies to workers aged 23 years and older. In some European nations, the minimum rate of pay is based on a standard number of hours worked per week. In other countries, minimum wages are determined by the provisions of a collective agreement which is in effect nationally.