The federal Fair Labor Standards Act requires, among other things, that a minimum wage be established, and that all nonexempt employees be paid that minimum wage. As of July 24, 2009, the minimum wage is $7.25 per hour. This rate must be paid to all nonexempt employees for each hour worked up to and including 40 hours in a calendar workweek. Any time beyond 40 hours must be paid as time-and-a half overtime, which works out to a current minimum of $10.88 per hour.

The Fair Minimum Wage Act of 2007 raises the federal minimum wage rate to $7.25 per hour effective July 24, 2009, ($6.55 per hour effective July 24, 2008 and before July 24, 2009; $5.85 per hour effective July 24, 2007 and before July 24, 2008).

The minimum doesn't just apply to hourly workers. The law doesn't require you to pay an employee on an hourly basis just because the law is stated that way; it merely requires you to pay a covered employee for a workweek an amount that's at least equal to the minimum wage, multiplied by the hours worked. The employee may be paid on an hourly, a salary, a monthly, a piecework, or any other basis as long as the statutory minimum requirement of $7.25 per hour is satisfied. For example, an employee who works 40 hours a week must be paid a weekly salary of at least $290.00.

Also, the minimum wage doesn't have to be paid in cash. For example, you can pay some or all of it in room and board. But there are two exceptions to that rule: (1) you cannot make a profit on the noncash payments and (2) you cannot use the cost of facilities to pay your employees, if the employee's use of the facility is primarily for your benefit.

In considering your obligations to pay minimum wage:

• Figure out if your employees are covered by federal wages and hours laws.
• Determine who must be paid the minimum wage.
• See if tips can count as part of the minimum wage.
• Consult your state's law to ensure that you are complying both federally and in your state.