# Can I lower my restaurant workers’ pay because the federal minimum wage is lower?

- Jurisdiction: United States
- Practice area: Employment Law
- Published: 2026-10-22
- Last updated: 2026-10-22
- Canonical: https://lawasked.com/us/employment-law/can-i-lower-my-restaurant-workers-pay-because

## Question

I own a small restaurant in San Diego, California, and I pay my full-time employees $18.00 an hour. Until December 31, 2024, I understood that California’s minimum wage was $16.00 per hour, and I had kept my hourly rate above that amount for several years. My payroll manager recently suggested reducing the two workers’ wages to $16.50 per hour, the California minimum beginning in 2025, because the federal minimum wage is only $7.25 per hour. I have not changed their pay yet and gave my manager instructions to leave the current rates alone until I checked the rules. One employee asked whether reducing her rate would affect the additional $2.00 she receives for working more than 40 hours in a week, and she also asked whether the restaurant would treat the decrease as a midyear pay reduction. I paid her $2,190 before taxes during the four weeks ending November 30, 2024, based on an $18.00 hourly rate and approximately 38 scheduled hours each week. I want to know whether I may legally reduce her wage to $16.50 on January 1, 2025, or whether her existing $18.00 rate must be maintained because it exceeds the applicable minimum wage.

## Summary

Assuming the restaurant is in California as stated, the lower federal minimum does not authorize reducing the workers from $18.00 to $16.50. The FLSA preserves higher state minimums and does not justify reductions merely because wages exceed the federal floor; California-specific restrictions must also be checked [cite:us-title29-flsa-sec218].

## Analysis

For covered employees, the federal minimum wage is $7.25 per hour [cite:us-title29-flsa-sec206]. That federal rate does not authorize the restaurant to disregard a higher applicable state or local minimum. Section 218(a) provides that no federal provision or order “shall excuse noncompliance with any Federal or State law or municipal ordinance establishing a minimum wage higher than the minimum wage established under this chapter” [cite:us-title29-flsa-sec218]. Thus, assuming California law applies and $16.50 was the applicable minimum on January 1, 2025, paying $16.50 would satisfy that wage floor without necessarily making the reduction lawful.

The primary provision also states that no federal provision “shall justify any employer in reducing a wage paid by him which is in excess of the applicable minimum wage under this chapter” [cite:us-title29-flsa-sec218]. This language means that the federal minimum alone is not a justification for reducing the $18.00 rate. It does not, however, establish that every wage above a state minimum must remain unchanged, nor does it resolve California rules governing promised wages, employment contracts, midyear reductions, and required notice.

The most directly relevant California authorities—California Labor Code section 221 and the applicable California wage orders—are not included in the supplied statutory sections, so their precise application cannot be established from the materials provided. Before reducing the rate, the restaurant should determine whether those authorities, an offer letter, an employment agreement, a collective-bargaining agreement, or a handbook promise restricts the reduction and whether advance notice is required. A prospective reduction should not be implemented merely because $16.50 is the applicable minimum.

The supplied sections also do not establish the regular-rate method, the premium required for hours over 40, or how a base-wage change affects overtime. Therefore, they do not support a conclusion that the employee's additional $2.00 per overtime hour would remain unchanged or automatically decline with the base rate. California wage orders and the governing overtime law should be checked before changing either the base rate or the overtime calculation. Because the employee is described as full-time and the question describes an additional amount for working more than 40 hours, the overtime issue remains material, but the supplied statutes do not resolve it.

The payroll figures also warrant reconciliation. Four weeks at approximately 38 scheduled hours per week would ordinarily total approximately 152 hours, which at $18.00 per hour would be $2,736 before taxes, not $2,190. The $2,190 payment represents approximately 121.67 hours at $18.00. Actual hours worked, any overtime, deductions, and other compensation should be checked, and the change should not create a mid-pay-period reduction without legal review [cite:us-title29-flsa-sec206].

## Statutory citations

- Fair Labor Standards Act of 1938, 29 U.S.C. § 218 - Relation to other laws [in force] (https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section218)
  > No provision of this chapter or of any order thereunder shall excuse noncompliance with any Federal or State law or municipal ordinance establishing a minimum wage higher than the minimum wage established under this chapter.
- Fair Labor Standards Act of 1938, 29 U.S.C. § 218 - Relation to other laws [in force] (https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section218)
  > No provision of this chapter shall justify any employer in reducing a wage paid by him which is in excess of the applicable minimum wage under this chapter.
- Fair Labor Standards Act of 1938, 29 U.S.C. § 206 - Minimum wage [in force] (https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section206)
  > Every employer shall pay to each of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, wages at the following rates: ... not less than ... $7.25 an hour

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