New Hampshire has followed the federal minimum wage since it was set by the Fair Labor Standards Act in 1938. Unlike many other states in the nation, the Granite State has chosen not to implement a separate New Hampshire minimum wage rate, keeping things aligned with the federal baseline. However, there are still important factors that employers need to take into account, such as specific rules for tipped employees and exemptions for certain job categories. Understanding these nuances is essential for maintaining fair pay practices and staying in compliance with the law.
Read on to learn everything you need to know about the New Hampshire minimum wage and how it impacts businesses in the state.
New Hampshire Minimum Wage: Current Rates
So, what is the minimum wage in New Hampshire?
In fact, New Hampshire is one of the few states that has not established its own state minimum wage law, which means it follows the federal minimum wage of $7.25 per hour, as outlined by the Fair Labor Standards Act (FLSA). This federal minimum wage has remained unchanged since 2009, when it was raised from $5.15 per hour.
What about tipped employees? What is the minimum wage in New Hampshire for these workers?
For tipped workers, New Hampshire adheres to the federal minimum wage of $3.27 per hour, which is 45% of the standard minimum wage of $7.25. Employers must ensure that tipped employees’ total earnings, including tips, meet or exceed the standard minimum wage of $7.25 per hour. If the total earnings fall short, employers must make up the difference.
What Is the Fair Labor Standards Act?
Ok, the New Hampshire minimum wage rate is set by the Fair Labor Standards Act, but what is the FLSA exactly, and who does it apply to?
The Fair Labor Standards Act (FLSA), is a federal law enacted in 1938 that establishes minimum wage, overtime pay, record-keeping, and child labor standards for workers in both the private and public sectors. The FLSA applies to most employees in the United States and it ensures that non-exempt employees are paid at least the federal minimum wage of $7.25 per hour and receive overtime pay at 1.5 times their regular rate for any hours worked over 40 in a workweek.
Specifically, the FLSA applies to employees of businesses that engage in interstate commerce or have gross annual revenues of at least $500,000. It also covers certain categories of workers, such as domestic service employees, hospital workers, and schools. However, while the FLSA provides wage protections for most workers, there are exemptions, including certain salaried employees in executive, administrative, and professional roles, as well as some agricultural and seasonal workers.
These standards are applied to all non-exempt employees.
What Is a Non-Exempt Employee?
One important thing to consider when talking about the New Hampshire minimum wage is the employment classification of your workers. In other words, whether your employees are classified as exempt or non-exempt from the requirements of the FLSA.
Let’s break it down.
According to the Fair Labor Standards Act, there are two types of employees:
- Exempt employees. An employee who you class as being exempt from the overtime provisions of the Fair Labor Standards Act (FLSA), such as executive, professional, and administrative roles.
- Non-exempt employees. An employee who you do not class as being exempt from the overtime provisions of the Fair Labor Standards Act (FLSA) and who you, therefore, must pay overtime when they work over their contracted hours.
To determine if your employees should be classified as exempt or non-exempt, you need to consider the following:
- Salary level. Are you paying the employee more than $35,568 per year?
- Salary basis. Do you offer them a guaranteed minimum compensation amount, regardless of the hours they actually work?
- Duties: Have you contracted them to perform an exempt job duty? (Professional duties that require specialized education; executive duties such as supervising a team; or administrative duties that require the use of discretion and judgment).
Once you determine an employee’s classification, you will know whether or not the New Hampshire minimum wage applies.
Exemptions to the New Hampshire Minimum Wage
Aside from the above, there are some additional exemptions to the New Hampshire minimum wage that you need to be aware of when you design your compensation strategy.
Here’s an overview of these exemptions
New Hampshire Minimum Wage for Tipped Workers
In New Hampshire, employers can pay tipped workers less than the standard minimum wage, as long as their tips make up the difference and bring their earnings up to at least the regular minimum wage. The tipped minimum wage in New Hampshire is $3.27 per hour, which is 45% of the federal minimum wage of $7.25. If a tipped employee’s total earnings (wages plus tips) don’t reach the full minimum wage, the employer must make up the difference.
It’s also important to note that New Hampshire has recently enacted legislation that “uncouples” the state’s tipped workers from changes to the federal minimum wage. This means that if the federal minimum wage increases, New Hampshire employers are not legally required to raise the tipped minimum wage accordingly.
New Hampshire Minimum Wage for Minors
New Hampshire law allows employers to pay employees under 18 years of age a lower minimum wage of $6.00 per hour. This rate applies until the employee reaches 18 years of age, at which point they must be paid at least the standard New Hampshire minimum wage of $7.25 per hour.
Students and Trainees
New Hampshire does not have any restrictions on subminimum wages for student workers, learners, or apprentices. However, the FLSA does allow employers to pay subminimum wages to students and trainees, as long as they obtain an authorizing certificate from the U.S. Department of Labor. The federal subminimum wage for students must be at least 75% of the New Hampshire minimum wage.
Agricultural workers
When it comes to agricultural workers in New Hampshire, the rules around minimum wage can be a bit tricky. While most businesses have to pay at least the minimum wage, both federal and state laws provide an exemption for farm labor, but the specifics depend on the size of the farm.
Specifically, under both New Hampshire and federal law, farms are exempt from minimum wage requirements if they use fewer than 500 “man-days” of agricultural labor in a calendar quarter. A “man day” is defined as one worker performing at least one hour of labor in a single day. However, if a farm exceeds 500 man-days of labor in any calendar quarter, it must pay employees at least the minimum wage for all hours worked.
The threshold of 500 man-days is key, here. Farmers should therefore carefully track working hours to determine whether they need to pay the New Hampshire minimum wage based on this threshold.
Independent Contractors
Finally, independent contractors are not covered by federal or state minimum wage laws, as they are not considered employees under the FLSA. Employers must be careful to classify workers correctly to avoid penalties.
Will the New Hampshire Minimum Wage Increase in 2025?
Because the New Hampshire minimum wage is tied to the federal standard, it remains at $7.25 per hour and is not expected to increase in 2025 unless the federal rate changes. While there have been occasional discussions about raising the wage in the state, no new legislation has been passed to do so. Therefore, as of now, unless there’s a federal update or a change in state law, the New Hampshire minimum wage will continue to align with the federal rate, with no immediate plans for an increase.
This is in stark contrast to other states like California and Delaware, which have committed to raising their minimum wages significantly in the coming years. For instance, California’s minimum wage is set to increase to $16.50 per hour in 2025, while Delaware is already on track to reach $15.00 per hour by next month. These states have taken proactive steps to address the growing cost of living, while New Hampshire remains at the federal baseline with no plans for change in the near future.
Additional New Hampshire Wage Laws
Aside from the New Hampshire minimum wage, the state has a number of additional wage laws that employers need to understand as these can have an impact on an employee’s wages.
Let’s explore these additional New Hampshire wage laws in a bit more detail so you can make sure your employee handbook meets all requirements.
Overtime Pay
New Hampshire follows the federal standard for overtime, which requires employers to pay 1.5 times the regular hourly rate (time and a half) for hours worked beyond 40 in a week. For example, if an employee receives the New Hampshire minimum wage rate of $7.25 per hour, you must pay them $10.88 per hour for every hour of overtime. This applies to all non-exempt employees under the FSLA. Exempt employees, who typically hold executive, administrative, or professional positions, are not entitled to overtime pay.
Meal and Rest Breaks
In New Hampshire, employers must give employees a 30-minute meal break if they work more than five hours in a row. This break is usually unpaid unless the employee has to stay on-site during the break. The state doesn’t require rest breaks, but if employers choose to offer them, they must pay for any rest breaks that last 20 minutes or less. This aligns with federal break laws.
Wage Payment and Deductions
In New Hampshire, employers must pay employees on a regular payday, and they must pay wages in full at the end of each pay period.
Employers can only make deductions from an employee’s wages if the law permits or if the employee agrees in writing. Common deductions include taxes, benefits, and union dues, all of which are allowed. However, employers cannot deduct for things like broken equipment or cash shortages without the employee’s written consent.
Specifically, employers can make deductions for the following:
- State and federal taxes
- Social Security contributions
- Health insurance premiums (if authorized by the employee)
- Retirement or pension contributions
- Union dues (if applicable)
Employers must inform employees about any deductions and ensure these deductions are legal and authorized. If an employer fails to pay wages on time or deducts incorrectly, the employee has the right to file a claim with the New Hampshire Department of Labor.
Final Paychecks
In New Hampshire, employers must pay all earned wages, including unused PTO, when employees separate from the company. The timing of the final paycheck depends on the circumstances surrounding the seperation:
- Terminated employees. Employers must pay the final paycheck within 72 hours of firing an employee.
- Laid-off employees. Employers should pay the final paycheck on the next scheduled payday for layoffs.
- Resigning employees. Employers generally pay on the next scheduled payday. However, if the employee provides at least one pay period’s notice, the employer must pay within 72 hours of separation.
Employers can issue final paychecks through regular payment methods or by mail if the employee requests it.
Equal Pay for Equal Work
In New Hampshire, both state and federal laws prohibit paying employees different wages for the same work based solely on sex. This means employers must ensure equal pay for equal work, regardless of gender. This law, which aligns with the federal Equal Pay Act, helps prevent gender-based wage gaps and promotes pay parity in the workplace.
To comply with this law, employers should regularly review their compensation practices to identify and address any wage gaps. Implementing transparent pay structures and conducting periodic audits can help maintain compliance and promote fairness in the workplace.
Timekeeping and Record-Keeping
Finally, employers in New Hampshire must maintain accurate records of all hours worked and wages paid to each employee. This responsibility helps ensure compliance with state labor laws. Accurate records also protect your business in the event of an employee dispute. Employers must keep these records for at least three years.
Specifically, employers must document:
- Hours worked. Keep detailed records of the start and end times of each workday, including any breaks taken.
- Wages paid. Track all payments made to employees, including regular wages, overtime, bonuses, and any deductions.
Best Practices for Wage Law Compliance
To stay on top of New Hampshire’s wage laws, it’s important to follow clear practices and review them regularly.
Here are some best practices to help you stay compliant:
- Stay updated on wage laws. Keep track of any changes to federal and state wage laws so your business remains compliant. This includes any updates to the New Hampshire minimum wage.
- Track hours accurately. Use reliable systems to record all hours worked, including overtime, breaks, and meals.
- Maintain proper records. Keep detailed records of wages, hours, and deductions for at least three years.
- Ensure equal pay for equal work. Regularly check that your pay practices are fair and that you’re paying equally for equal work, regardless of gender.
- Pay wages on time. Make sure employees receive their paychecks on time. The same goes for final paychecks, including any unused vacation time.
- Train management. Educate your managers and supervisors on wage laws and company policies to avoid mistakes.
- Review contracts and policies. Make sure your employee contracts and company policies match state and federal wage laws, especially around vacation, overtime, and deductions.
By following these steps, you can reduce risks, avoid legal issues, and create a fair workplace for your employees.
How Factorial Can Help
Ensuring compliance with New Hampshire wage laws is crucial for employers to avoid potential penalties and legal disputes. Factorial can help you navigate the complexities of New Hampshire’s employment guidelines and streamline your entire payroll process.
Features of Factorial’s payroll solution that can help ensure New Hampshire wage law compliance:
- Automated payroll calculations. Accurately calculate wages, including overtime and tipped wages, based on New Hampshire and federal laws.
- Time and attendance tracking. Ensure accurate record-keeping for hours worked, breaks, and overtime to meet legal requirements.
- Integration with timekeeping systems. Link payroll to your timekeeping tools to automatically sync employee hours and prevent discrepancies.
- Customizable wage settings. Adjust settings for various worker classifications, such as exempt, non-exempt, and tipped employees, to maintain compliance.
- Comprehensive reporting tools. Generate detailed reports on employee hours, wages, and compliance metrics to stay audit-ready.
- Employee classification. Properly classify workers and manage different wage rates for exempt, non-exempt, and seasonal employees.
- Automated final pay processing. Ensure timely and accurate payment of final wages when an employee leaves.
- Integrated recordkeeping. Automatically store and manage employee hours, wages, and deductions. This males it easy to access the information you need for audits or legal inquiries.
- Real-time updates on New Hampshire wage laws. Stay up to date with any changes in federal and state wage regulations to ensure ongoing compliance.
Ultimately, with all these tools at your disposal, you can automate the entire payroll process, keep updated on any updates to the New Hampshire minimum wage, and foster a positive and compliant work environment for all.
