Utah Minimum Wage 2025

Utah is one of the few states that has not implemented laws to raise the minimum wage gradually. As a small business owner, staying informed about Utah minimum wage regulations is essential to ensure your business complies. It is also crucial to stay updated on the national wage trend of increasing minimum wages to prepare for any strategic changes. Here are the essential points you should be aware of regarding the minimum wage in Utah.

What Is the Minimum Wage in Utah?

In Utah, the minimum wage is set at the federal rate of $7.25 per hour, unchanged since 2010, when it was raised from $6.55 the previous year. Although there has been discussion and some proposed bills to increase this rate, no legislative changes have successfully raised the state’s minimum wage beyond the federal standard, as Utah does not have a separate state-specific minimum wage law.

The state allows a reduced base wage for tipped employees if the combination of their tips and wages meets or exceeds the $7.25 per hour threshold.

Will the Minimum Wage Rate Change in Utah?

As of 2025, Utah’s minimum wage remains unchanged at $7.25 per hour, the rate it has been since 2009. Utah does not have a state-specific minimum wage law, so it follows the federal minimum wage. Despite ongoing discussions and proposals, there has been no legislative action to increase the minimum wage in the state. Utah’s minimum wage applies to most employees, though certain exemptions exist, such as lower wages for tipped workers and temporary training wages for younger employees.

Although there is no current plan to raise the minimum wage at the state level, private employers in Utah, such as Steward Health Care, have taken steps to offer higher wages voluntarily. For instance, in 2021, they decided to pay their employees $15 per hour, significantly above the state and federal minimum wage. These initiatives show some movement in the private sector, but legislative change at the state level remains uncertain.

Some minimum wage exemptions exist, such as for student workers (who may earn 85% of the standard wage), tipped employees, and those under 20 during the first 90 days of employment. However, any meaningful change to the state’s minimum wage laws has not yet been planned for the near future.

Evolution of the Federal Minimum Wage in the US

The federal minimum wage in the United States has seen significant changes since its inception in 1938 through the Fair Labor Standards Act (FLSA). Originally set at $0.25 per hour, it was intended to establish a basic income floor and initiate worker protection laws. Over time, it has undergone numerous adjustments.

In 1950, the minimum wage was raised to $0.75 per hour, coinciding with expanded coverage to sectors such as air transport, reflecting a post-war economic transition. By 1966, it increased to $1.40 per hour, with its scope extending to public schools and nursing homes, marking it as a measure to align wages with productivity and living standards and to help alleviate poverty.

From 1981 to 1989, the minimum wage remained fixed at $3.35 per hour, marked by rising income inequality. Subsequent legislation in 1989 increased it to $3.80 per hour, requiring compliance from businesses with annual revenues exceeding $500,000.

In 1997, during the Clinton administration, the minimum wage was adjusted to $5.15 per hour. Despite this increase, it struggled to keep pace with inflation. The most recent adjustment in 2009 set the federal minimum at $7.25 per hour, which remains unchanged. This marks the longest duration without an increase amidst escalating living costs and inflation. While some states like Washington and California have adopted higher minimum wages reflecting local cost differences, there are no imminent plans to enhance the federal minimum wage.

Variation in Minimum Wage Across Utah

Across Utah, including major areas such as Salt Lake County, Utah County, Weber County, Washington County, and cities like Salt Lake City, Provo, West Valley City, West Jordan, and Orem, the minimum wage is uniformly set at $7.25 per hour, matching the Federal Minimum Wage.

Starting January 1, 2025, Utah County will implement a new minimum wage structure that varies by age. Employees under 18 will be paid $10.00 per hour. Those between 18 and 20 will receive $13.00 per hour. Individuals aged 21 to 22 will get $15.00 per hour, and workers 23 years and older will earn $19.00 per hour.

Tipped Employee Wage Regulations in Utah

In Utah, the base wage for employees who earn regular tips is $2.13 per hour. A “tipped employee” is defined as one who frequently and customarily receives tips. Employees must consistently receive at least $30 in tips monthly for employers to pay this reduced wage. Additionally, tipped employees’ total income, including salaries and tips, must meet the minimum wage. The employer must compensate for the shortfall if the combined total falls short.

Employers must notify employees before applying the tipped minimum wage rate. Tips belong solely to the employees receiving them. It is important to note that mandatory service charges are not considered tips and form part of the employer’s overall revenue, which they can distribute as they see fit.

When tips are charged on a credit card, employers can deduct a proportionate share of the credit card fees from the tipped amount given to the employee.

Overtime Minimum Wage Regulations

In Utah, overtime rules follow the guidelines established by the Fair Labor Standards Act (FLSA). According to the FLSA, employees are entitled to overtime pay when they work more than 40 hours within a workweek. Overtime compensation must be at least one-and-a-half times their regular hourly rate.

The FLSA’s overtime provisions apply to multiple sectors and do not limit the weekly working hours for individuals aged 16 and older. Overtime is computed weekly over 168 hours, constituting seven consecutive 24-hour days. This period can commence any day and any time, independent of the standard calendar week.

The majority of Utah employees, whether part-time or full-time and regardless of industry, qualify for overtime pay if they exceed 40 hours of work in a week unless they are exempt under specific FLSA criteria. It’s also crucial to understand that overtime pay is only required for hours worked beyond the 40-hour threshold within a week, not for work done on weekends, holidays, or regular rest days unless they coincide with hours worked beyond this threshold.

Under federal guidelines, the minimum salary for exemptions applying to administrative, professional, and executive roles is $684 weekly, equating to an annual salary of $35,568.

Minimum Wage Exemptions in Utah

In Utah, certain groups of employees may receive less than the state minimum wage under specific conditions.

• Student Workers: High school or college students working part-time or in work-study programs can be paid 85% of the standard Utah minimum wage, provided they work 20 hours per week or less. This policy acknowledges the students’ primary focus on education while allowing them to earn supplemental income.
• Young Workers: Employees under 20 can be paid a training wage of $4.25 per hour during their first 90 days. After this introductory period, they must be compensated at least the full minimum wage applicable in Utah. This lower initial wage will encourage employers to hire younger, less experienced workers by offsetting initial training costs.
• Employees with Disabilities: Workers with disabilities may also receive a wage below the standard minimum if their productivity is affected by their disability. Employers must obtain specific authorization from the U.S. Department of Labor to implement this wage reduction, and it must be based on an evaluation of the worker’s productivity relative to the standard rate for the job.​

Best Practices for Utah Employers to Ensure Wage Law Compliance and Avoid Penalties

To comply with wage laws and avoid fines, employers in Utah should adopt the following best practices:

• Monitor Working Hours and Overtime: Employers must accurately track employee hours, including overtime. In Utah, overtime is paid at 1.5 times the regular rate for hours worked beyond 40 per week, in alignment with federal guidelines. Implementing robust time-tracking systems that log work breaks can help ensure compliance and prevent disputes over unpaid overtime.
• Maintain Detailed Records: Employers must retain payroll and timekeeping records for at least three years. These records should include employee names, hours worked, and wages paid. Effective record-keeping is vital for complying with state and federal regulations and efficiently resolving wage-related disputes.
• Schedule Breaks Appropriately: Although Utah does not mandate breaks for workers aged 18 and over, offering well-timed breaks can enhance employee satisfaction and productivity. For employees under 18, Utah requires a 10-minute break for every 3 hours worked.
• Implement an Effective Payroll System: Payroll systems should be updated regularly to reflect current wage laws. Employers need to ensure they consider any exemptions, such as those for tipped employees or minors, who may have different wage standards.

By following these guidelines, businesses can avoid penalties for non-compliance and create a just working environment. Utilizing modern payroll and time-tracking software can simplify compliance management.

Conclusion

Utah’s minimum wage laws, which align with the federal standard of $7.25 per hour, remain unchanged for 2025. While there is no immediate plan to increase the rate, small business owners should stay informed about ongoing national trends and any future legislative developments that could impact wages.

Employers should also be mindful of specific exemptions for tipped workers, student employees, and younger workers, as well as the importance of maintaining accurate records and compliance with overtime regulations. Proactively preparing for potential changes and adhering to best practices will help businesses maintain compliance and foster a fair work environment.

Frequently Asked Questions