COVERAGE AND EXEMPTIONS
Who Is Covered by the Minimum Wage (US and UK)?
"Covered" (FLSA applies to this employer) is distinct from "exempt" (FLSA applies but this specific worker is not entitled to minimum wage or overtime). This page covers both.
UNITED STATES
US FLSA Coverage: Who Must Pay Minimum Wage?
ENTERPRISE COVERAGE (THE EMPLOYER TEST)
An employer (the "enterprise") is covered by the FLSA if its annual gross volume of sales made or business done is $500,000 or more, OR if it is engaged in interstate commerce. In practice, the interstate commerce catch-all is interpreted extremely broadly -- almost any business that uses supplies or services that crossed state lines, accepts payment cards processed out of state, or communicates across state lines is covered.
Certain enterprises are automatically covered regardless of sales volume: hospitals, schools, universities, government agencies, and residential care facilities. A corner restaurant or local dry cleaner with less than $500,000 in sales would potentially be the rare uncovered employer -- though the $500,000 threshold has not been indexed since 1990 (it was $362,500 in 1990 dollars) and covers a tiny fraction of employers today.
INDIVIDUAL COVERAGE (THE WORKER TEST)
Even if an employer is not an "enterprise" covered by the FLSA, an individual worker is personally covered if they are "engaged in commerce" or in the "production of goods for commerce." This covers workers who directly use the mail or telephone in interstate communication, handle goods moving in interstate commerce, or perform work in the flow of interstate commerce. In practice, individual coverage reaches most workers even at very small non-covered employers.
FLSA Exemptions from Minimum Wage
These workers are covered by the FLSA but specifically exempted from minimum wage requirements.
Executive, Administrative, and Professional Employees
The white-collar exemption. Must meet salary basis, salary level ($684/week), and duties test. See /exempt-minimum-wage for details.
Outside Sales Employees
Workers whose primary duty is making sales away from the employer's premises and who are customarily and regularly engaged away from the employer's place of business.
Farm Workers on Small Farms
Workers on farms that used fewer than 500 man-days of agricultural labor in any quarter of the preceding year are exempt from minimum wage. The small farm exemption has been controversial since 1938.
Seasonal Amusement or Recreational Establishments
Workers at amusement parks, summer camps, ski resorts and similar establishments that operate for seven months or less per year are exempt.
Newspaper Delivery Workers
Workers who deliver newspapers to consumers (not the publishing company's distribution workers, but the final-mile delivery).
Casual Babysitters
Individuals who provide babysitting as a casual, incidental activity (not as a regular business). This does not include nannies or regular childcare providers.
Note: overtime exemptions are much broader than minimum wage exemptions. Many more workers are exempt from overtime than from minimum wage. This page covers minimum wage exemptions only.
UNITED KINGDOM
UK Minimum Wage: Worker vs Employee vs Self-Employed
The UK National Minimum Wage applies to "workers" -- a legal category in UK employment law that is broader than "employees." Understanding the difference is critical because it determines whether you are entitled to minimum wage at all.
Employee
Works under a contract of employment. Maximum protections. Entitled to minimum wage, sick pay, holiday pay, unfair dismissal rights, redundancy pay. All employees are workers.
Worker (non-employee)
Works under a contract (written or verbal) where the employer is not a client or customer. Entitled to minimum wage and holiday pay. Not entitled to redundancy pay or unfair dismissal protection. Gig economy workers frequently fall here.
Self-Employed
Runs their own business, contracts with clients. Not entitled to minimum wage. The boundary between "worker" and "self-employed" is determined by three factors: control, integration, and mutual obligation. Courts look at the reality of the relationship, not just the contract.
UK National Minimum Wage Exemptions
The National Minimum Wage does not apply to:
- Genuinely self-employed contractors (who work for their own clients)
- Company directors who are not also workers under a separate contract
- Volunteers and voluntary workers
- Workers living as part of a family in the employer's home and sharing in family life (family workers exemption)
- Members of the armed forces
- Prisoners working in prison under prison work schemes
- Share fishermen
- People living and working in religious communities
Gig Economy: Where Do Platform Workers Stand in 2026?
The gig economy has generated extensive litigation on both sides of the Atlantic over whether platform workers are employees, workers, or self-employed.
UK position (April 2026): The Supreme Court ruled in February 2021 (Uber BV v Aslam) that Uber drivers in the UK were "workers" and therefore entitled to minimum wage, holiday pay, and pension enrolment. This landmark ruling has cascaded through UK gig economy employment; Deliveroo's 2021 Court of Appeal ruling went the other way (Deliveroo riders are self-employed), but subsequent cases have generally moved toward worker status for platform workers with significant platform control over working conditions.
US position (April 2026): Uber, Lyft, and DoorDash drivers remain classified as independent contractors under federal FLSA in all states except California, where AB5 (2019) reclassified many gig workers as employees, but Proposition 22 (2020) created a carve-out for app-based drivers. As of April 2026, California gig drivers are in a legal grey zone with ongoing litigation on Prop 22's constitutionality. The Biden DOL's January 2024 independent contractor rule sought to expand worker protections but has faced legal challenges under the Trump administration.
FOR EMPLOYERS
Running Payroll Across Multiple States?
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