Minimum wage violations hit record in 2025

Minimum wage violations appear to be on the rise, according to new Cleveland Fed research based on data from the 10 most populous states.

A record 5 percent of non-exempt workers in those states experienced a minimum wage violation in 2025, according to the research, which relies on data from the US Census Bureau's Current Population Survey.

That percentage has nearly doubled since 2004.

The amount of underpayment has also been on the rise, especially since 2017. The average weekly underpayment hit a record in 2023, exceeding $110 per week, or $5,720 per year. Weekly underpayment fell to roughly $95 per week in 2025 but was still elevated.

The upward trend in those 10 states is driven primarily by states that have raised their minimum wage requirements well above the federal minimum - California, Florida, New York, and Illinois.

Prior research suggests that enforcement may be one reason why, as many states have limited staff to ensure compliance beyond federal requirements, according to Cleveland Fed researchers Youha Kim and Bruce Fallick.

"As a result, workers experiencing violations often must navigate the time-intensive process of filing a lawsuit or an administrative wage claim. This situation is likely compounded by limited awareness among both workers and employers of up-to-date minimum-wage regulations, a circumstance which can contribute to unintentional noncompliance," they write.

Read the Economic Commentary: A Fracturing Wage Floor? Below-Minimum Wages in the Twenty-First Century