The Federal Reserve Bank of Cleveland published research finding that a record 5% of non-exempt workers in the 10 most populous U.S. states experienced minimum wage violations in 2025, nearly double the share in 2004. The analysis is based on U.S. Census Bureau Current Population Survey data. Average underpayment exceeded a record USD 110 per week, or USD 5,720 annually, in 2023 before declining to about USD 95 per week in 2025, which remained elevated. The increase was concentrated in California, Florida, New York and Illinois, where state minimum wages are well above the federal level. The researchers cited prior evidence suggesting that limited enforcement staffing, burdensome claims processes and insufficient awareness of current wage requirements may contribute to noncompliance.
2026-08-24Federal Reserve Bank of Cleveland
Federal Reserve Bank of Cleveland research finds minimum wage violations reached a record 5% in 2025
Federal Reserve Bank of Cleveland research found that minimum wage violations affected a record 5% of non-exempt workers across the 10 most populous U.S. states in 2025. Average underpayment remained elevated at about USD 95 per week, with the trend concentrated in states whose minimum wages substantially exceed the federal level.