Minimum Wage Validation in US Payroll

Introduction

Keka helps you stay compliant with U.S. federal and state wage laws by validating employee compensation against applicable minimum wage standards.

This feature:

• Alerts you when pay falls below minimum wage.

• Works for both hourly and annual salaries (annual pay is converted to hourly using 2080 hours/year).

• Applies the higher of the federal or state minimum wage.

• Shows all applicable state rates if multiple rules apply (e.g., company size, benefits).

• Defaults to the federal minimum wage of $7.25/hour if no state rate is defined.

Important: The validation is advisory only. Payroll admins can proceed even if the warning appears, but it provides a checkpoint for compliance and fair pay practices.

Admins with access to employee compensation and payroll settings can view these validations.

When Minimum Wage Validation Is Triggered

A warning appears if the defined compensation is less than the minimum wage for the employee’s work state.

When Warnings Appear

Updating Salary in Employee Profile

• When you add a new salary or revise pay in an employee’s profile, Keka automatically checks it against the applicable wage laws.

• If the amount is below the minimum wage, a warning message appears immediately under the pay field.
  
  

During Compensation Import 

• When importing salaries in bulk, validations run in Step 3: Preview.

• Each row is checked against the applicable minimum wage.

• Any pay entries below the threshold are flagged with a warning in the preview grid.

• You can review these before finalizing the import.

Options & Variants

• Federal vs. state law: The higher wage always applies.

• Multiple state rates: Keka displays all applicable options for clarity.

• Salary type: Works for both hourly and annual pay definitions.

Notes & Tips

Note: Minimum wage validation is non-blocking. You can continue with payroll setup or import even if warnings appear.

Tip: Use the warnings as a compliance checkpoint to avoid pay discrepancies and potential legal risks.

We hope this article helps you confidently navigate minimum wage compliance using Keka.