Minimum Wage Definition

Term Definition
The lowest hourly rate that can legally be paid to an employee under Federal law. Many states also have wage laws. If an employee is subject to both the state and Federal minimum wage laws, the employee is entitled to the greater of the two wages.

Extended Definition
Minimum wage is the lowest possible hourly wage that an employer may pay an employee for his labor as per federal or state law. Minimum wage figures are periodically adjusted based on factors like inflation. This figure is set with the aim of ensuring that employees can afford the fundamental necessities, and for protecting them from exploitation. Some states set their own minimum wage that may be higher than the federal wage limits.

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