What is an Employment Contract/Agreement?

An employment contract, used in the realm of labor law, serves as a type of agreement that establishes the rights and obligations of the parties involved in a work arrangement. This contract forms a legal bond between an "employee" and an "employer."

IRS Requirements

For US companies employing citizens and residents, the following documentation is mandated by the IRS:

• IRS Form W-4: Employees must fill this out when they begin their employment.

• IRS Form W-9: Independent contractors are required to complete this form at the start of their engagement, particularly if their service or labor compensation exceeds $600.

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By State

Alabama

Laws

Title 25, Chapter 4 (Unemployment Compensation)

Income Tax Rate (Individual)

Individual Income Tax – 2% to 5%

Minimum Wage ($/hr)

Minimum Wage – $7.25 (no State minimum, federal law applies)

Sources

1. § 25-4-7

2. § 40-18-5

3. 29 U.S. Code § 206

Alaska

Laws

Title 23, Chapter 20 (Alaska Employment Security Act)

Income Tax Rate (Individual)

Individual Income Tax – 0% (Statute Repealed)

Minimum Wage ($/hr)

Minimum Wage – $10.19

Sources

1. AS 23.10.699

2. AS 25.27.062

3. AS 09.20.037

4. AS 18.60.089

5. AS 23.10.135

6. Div. of Labor Standards – Minimum Wage Standards

Arizona

Laws

ARS Title 23 (Labor)

Income Tax Rate (Individual)

Individual Income Tax – 2.59% to 4.50%

Minimum Wage ($/hr)

Minimum Wage – $12.00

Sources

1. ARS § 23-211

2. ARS § 43-1011

3. ARS § 23-363

Arkansas

Laws

Title 11 (Labor and Industrial Relations)

Income Tax Rate (Individual)

Individual Income Tax Rate – 2% to 6.60%

Minimum Wage ($/hr)

Minimum Wage – $10.00

Sources

1. § 11-11-202

2. § 26-51-201

3. § 11-4-210

California

Laws

California Labor Code

Income Tax Rate (Individual)

Individual Income Tax Rate – 1% to 9.3%

Minimum Wage ($/hr)

Minimum Wage – $11.00 – $14.00

For any employer who employs 26 or more employees, the minimum wage shall be as follows:

(A) From January 1, 2017, to December 31, 2017, inclusive,—ten dollars and fifty cents ($10.50) per hour. (B) From January 1, 2018, to December 31, 2018, inclusive,—eleven dollars ($11) per hour.

(C) From January 1, 2019, to December 31, 2019, inclusive,—twelve dollars ($12) per hour. (D) From January 1, 2020, to December 31, 2020, inclusive,—thirteen dollars ($13) per hour.

(E) From January 1, 2021, to December 31, 2021, inclusive,—fourteen dollars ($14) per hour. (F) From January 1, 2022, and until adjusted by subdivision (c)—fifteen dollars ($15) per hour.

For any employer who employs 25 or fewer employees, the minimum wage shall be as follows:

(A) From January 1, 2018, to December 31, 2018, inclusive,—ten dollars and fifty cents ($10.50) per hour. (B) From January 1, 2019, to December 31, 2019, inclusive,—eleven dollars ($11) per hour.

(C) From January 1, 2020, to December 31, 2020, inclusive,—twelve dollars ($12) per hour. (D) From January 1, 2021, to December 31, 2021, inclusive,—thirteen dollars ($13) per hour.

(E) From January 1, 2022, to December 31, 2022, inclusive,—fourteen dollars ($14) per hour. (F) From January 1, 2023, and until adjusted by subdivision (c)—fifteen dollars ($15) per hour.

Sources

1. LAB § 3351

2. RTC § 17041

3. LAB § 1182.12

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Colorado

Laws

Title 8 (Labor and Industry)

Income Tax Rate (Individual)

Individual Income Tax Rate – 4.63%

Minimum Wage ($/hr)

Minimum Wage – $12.00

Sources

1. § 8-1-101(6)

2. § 39-22-104(1.7)

3. Colorado Dept. of Labor and Employment

Connecticut

Laws

Title 31 (Labor)

Income Tax Rate (Individual)

Individual Income Tax Rate – 3% – 6.99%

Minimum Wage ($/hr)

Minimum Wage – $11.00

Sources

1. § 31-48d(2)

2. § 12-700

3. Connecticut Dept. of Labor

Delaware

Laws

Title 19 (Labor)

Income Tax Rate (Individual)

Individual Income Tax Rate – 2.2% – 6.6%

Minimum Wage ($/hr)

Minimum Wage – $9.25

Sources

1. § 1101(3)

2. § 1102(a)(14)

3. § 902(a)

Florida

Laws

Title XXXI (Labor)

Income Tax Rate (Individual)

Individual Income Tax Rate – 0%

Minimum Wage ($/hr)

Minimum Wage – $8.56

Sources

1. § 440.02(15)(a)

2. § 440.02(15)(b)

3. Department of Labor State Minimum Wage Laws

Georgia

Laws

Title 34 (Labor and Industrial Relations)

Income Tax Rate (Individual)

Individual Income Tax Rate – 1% – 5.75%

Minimum Wage ($/hr)

Minimum Wage – $7.25

Sources

1. § 34-9-1(2)

2. § 48-7-20

3. § 34-4-3

Hawaii

Laws

Title 21, Chapter 383 (Hawaii Employment Security Law)

Income Tax Rate (Individual)

Individual Income Tax Rate – 1.4% – 11%

Minimum Wage ($/hr)

Minimum Wage – $10.10

Sources

1. § 388-1

2. § 235-51

3. § 387-2

Idaho

Laws

Title 72 (Worker’s Compensation Law)

Income Tax Rate (Individual)

Individual Income Tax Rate – 1.125% – 6.925%

Minimum Wage ($/hr)

Minimum Wage – $7.25

Sources

1. § 72-102(12)

2. § 63-3024

3. § 44-1502

Illinois

Laws

Chapter 820 (Employment)

Income Tax Rate (Individual)

Individual Income Tax Rate – 4.95%

Minimum Wage ($/hr)

Minimum Wage – $8.25

Sources

1. 820 ILCS 105/3

2. 35 ILCS 5/201(b)(5.4)

3. 820 ILCS 105/4

Indiana

Laws

Title 22, Article 2 (Wages, Hours, and Benefits)

Income Tax Rate (Individual)

Individual Income Tax Rate – 3.23% plus additional taxes per county).

Minimum Wage ($/hr)

Minimum Wage – $7.25 ( recognizes federal wage laws)

Sources

1. § 22-2-2-3

2. § 6-3-2-1

3. 22-2-2-4(c)

Iowa

Laws

Title III (Public Services and Regulation)

Income Tax Rate (Individual)

Individual Income Tax Rate – .33% to 8.53%

Minimum Wage ($/hr)

Minimum Wage – $7.25 ( – recognizes federal wage laws)

Sources

1. § 91A.2(3)

2. § 422.5A

3. § 91D.1(1)(b)

Kansas

Laws

Chapter 44 (Labor and Industries)

Income Tax Rate (Individual)

Individual Income Tax Rate – 3.1% to 5.7%

Minimum Wage ($/hr)

Minimum Wage – $7.25

Sources

1. Kan. Stat. § 44-508(b)

2. Kan. Stat. § 79-32,110(2)(F)

3. Kan. Stat. § 44-1203

Kentucky

Laws

Title XXVII (Labor and Human Rights)

Income Tax Rate (Individual)

Individual Income Tax – 5%

Minimum Wage ($/hr)

Minimum Wage – $7.25 (recognizes federal wage laws)

Sources

1. § 342.640

2. § 141.020

3. § 337.275

Louisiana

Laws

Title 23 (Labor and Worker’s Compensation)

Income Tax Rate (Individual)

Individual Income Tax – 2% to 6%

Minimum Wage ($/hr)

Minimum Wage – $7.25 (recognizes federal wage laws)

Sources

1. § 47:111(C)

2. § 47:32

3. § 23:642

Maine

Laws

Title 26, Chapter 7 (Employment Practices)

Income Tax Rate (Individual)

Individual Income Tax – 5.8% to 7.15%

Minimum Wage ($/hr)

Minimum Wage – $12.00

Sources

1. § 591(1)

2. § 5111(1-F)

3. 26 § 664

Maryland

Laws

Labor and Employment

Income Tax Rate (Individual)

Individual Income Tax – 2% to 5.75%

Minimum Wage ($/hr)

Minimum Wage – $11.00 State-Wide (wages vary in Montgomery County & Prince George’s County – Dept. of Labor)

Sources

1. § 3-1001(c)

2. § 10-105(a)

Massachusetts

Laws

Title XXI (Labor and Industries)

Income Tax Rate (Individual)

Individual Income Tax – 5%

Minimum Wage ($/hr)

Minimum Wage – $12.75

Sources

1. Ch. 152 § 1(4)

2. Ch. 62 § 4

3. Commonwealth of Massachusetts

Michigan

Laws

Chapter 408 (Labor)

Income Tax Rate (Individual)

Individual Income Tax – 4.25%

Minimum Wage ($/hr)

Minimum Wage – $9.45

Sources

1. § 206.51(b)

2. Dept. of Labor and Economic Opportunity

Minnesota

Laws

Chapters 175-186 (Labor, Industry)

Income Tax Rate (Individual)

Individual Income Tax – 5.35% to 9.85%

Minimum Wage ($/hr)

Minimum Wage – $10.00 (employers earning $500,000+/year) / $8.15 (employers earning less than $500,000/year)

Sources

1. § 290.06

2. Dept. of Labor

Mississippi

Laws

Title 71 (Labor and Industry)

Income Tax Rate (Individual)

Individual Income Tax – 3% to 5%

Minimum Wage ($/hr)

Minimum Wage – $7.25 (no State minimum, federal law applies)

Sources

1. § 27-7-5

Missouri

Laws

Title XVIII (Labor and Industrial Relations)

Income Tax Rate (Individual)

Individual Income Tax – 1.5% to 5.4%

Minimum Wage ($/hr)

Minimum Wage – $9.45

Sources

1. § 143.011

2. Dept. of Labor

Montana

Laws

Title 39 (Labor)

Income Tax Rate (Individual)

Individual Income Tax – 1% to 6.9%

Minimum Wage ($/hr)

Minimum Wage – $8.65

Sources

1. § 15-30-2103

2. Dept. of Labor

Nebraska

Laws

Chapter 48 (Labor)

Income Tax Rate (Individual)

Individual Income Tax – 2.46% to 6.84%

Minimum Wage ($/hr)

Minimum Wage – $9.00

Sources

1. § 77-2715.03

2. § 48-1203

Nevada

Laws

Title 53 (Labor and Industrial Relations)

Income Tax Rate (Individual)

Individual Income Tax – 0%

Minimum Wage ($/hr)

Minimum Wage – $8.25/$7.25 for employees with qualifying health benefits (see Annual Minimum Wage Bulletin).

New Hampshire

Laws

Title XXIII (Labor)

Income Tax Rate (Individual)

Individual Income Tax Rate – 5% on interest and dividends only

Minimum Wage ($/hr)

Minimum Wage – $7.25

Sources

1. § 77:1

2. § 77:4

3. § 279:21

New Jersey

Laws

Title 34 (Labor and Workmen’s Compensation)

Income Tax Rate (Individual)

Individual Income Tax Rate – 1.4% to 10.75%

Minimum Wage ($/hr)

Minimum Wage – $11.00

Sources

1. § 54A:2-1(b)(5)

2. Dept. of Labor and Workforce Development

New Mexico

Laws

Chapter 50 (Employment Law)

Income Tax Rate (Individual)

Individual Income Tax Rate – 1.7% to 4.9%

Minimum Wage ($/hr)

Minimum Wage – $9.00

Minimum Wage in Local Municipalities:

• Albuquerque – $8.95

• Bernalillo County – $9.35

• Santa Fe – $14.03

• Santa Fe County – $12.95

• Las Cruces – $12.00

Sources

1. § 7-2-7(C)

2. § 50-4-22

New York

Laws

LAB (Labor)

Income Tax Rate (Individual)

Individual Income Tax Rate – 4% to 8.82%

Minimum Wage ($/hr)

Minimum Wage – $11.80

Local Wages:

• New York City – $15

• Long Island & Westchester – $13

Sources

1. TAX § 601

2. LAB § 652

3. Dept. of Labor

North Carolina

Laws

Chapter 95 (Department of Labor and Labor Regulations)

Income Tax Rate (Individual)

Individual Income Tax Rate – 5.25%

Minimum Wage ($/hr)

Minimum Wage – $7.25 (federal law applies)

Sources

1. § 105-153.7

2. § 95-25.3

North Dakota

Laws

Title 34 (Labor and Employment)

Income Tax Rate (Individual)

Individual Income Tax Rate – 1.10% to 2.90%

Minimum Wage ($/hr)

Minimum Wage – $7.25

Sources

1. § 34-06-01(2)

2. § 57-38-30.3

3. § 34-06-22

Ohio

Laws

Title 41 (Labor and Industry)

Income Tax Rate (Individual)

Individual Income Tax Rate – 2.850% to 4.797%

Minimum Wage ($/hr)

Minimum Wage – $8.70 (employers earning $319,000+/year) / $7.25 (employers earning less than $319,000/year)

Sources

1. § 5747.02

2. Dept. of Commerce

Oklahoma

Laws

Title 40 (Labor)

Income Tax Rate (Individual)

Individual Income Tax Rate – .5% to 5%

Minimum Wage ($/hr)

Minimum Wage – $7.25

Sources

1. § 40-52(a)

2. § 68-2355(C)

3. § 40-197.2

Oregon

Laws

Volume 14, Title 51 (Labor and Employment)

Income Tax Rate (Individual)

Individual Income Tax Rate – 5% to 9.90%

Minimum Wage ($/hr)

Minimum Wage – Standard wage – $11.25 | Metro. Service Districts – $12.50 | Non-urban Counties – $11.00

Sources

1. § 652.310(2)

2. § 316.037

3. § 653.025

Pennsylvania

Laws

Title 34 (Labor and Industry)

Income Tax Rate (Individual)

Individual Income Tax Rate – 3.07%

Minimum Wage ($/hr)

Minimum Wage – $7.25

Sources

1. Dept. of Revenue

2. Dept. of Labor and Industry

Rhode Island

Laws

Title 28 (Labor and Relations)

Income Tax Rate (Individual)

Individual Income Tax Rate – 3.75% to 5.99%

Minimum Wage ($/hr)

Minimum Wage – $10.50

Sources

1. § 44-30-2.6

2. § 28-12-3

South Carolina

Laws

Title 41 (Labor and Employment)

Income Tax Rate (Individual)

Individual Income Tax Rate – 0% to 7%

Minimum Wage ($/hr)

Minimum Wage – $7.25 (no State minimum, federal law applies)

Sources

1. § 12-6-510

South Dakota

Laws

Title 60 (Labor and Employment)

Income Tax Rate (Individual)

Individual Income Tax Rate – 0%

Minimum Wage ($/hr)

Minimum Wage – $9.30

Sources

1. § 60-1-1

2. Dept. of Labor

Tennessee

Laws

Title 50 (Employer and Employee)

Income Tax Rate (Individual)

Individual Income Tax Rate – 1% on interest and dividends only([2])

Minimum Wage ($/hr)

Minimum Wage – $7.25 (no State minimum, federal law applies)

Sources

1. § 50-1-702

2. § 67-2-102

Texas

Laws

Labor Code

Income Tax Rate (Individual)

Individual Income Tax Rate – 0%

Minimum Wage ($/hr)

Minimum Wage – $7.25

Sources

1. § 21.002(7)

2. § 62.051

Utah

Laws

Title 34A (Utah Labor Code)

Income Tax Rate (Individual)

Individual Income Tax Rate – 4.95%

Minimum Wage ($/hr)

Minimum Wage – $7.25

Sources

1. § 59-10-104

2. R610-1-3

Vermont

Laws

Title 21 (Labor)

Income Tax Rate (Individual)

Individual Income Tax Rate – 3.35% to 8.75%

Minimum Wage ($/hr)

Minimum Wage – $10.96

Sources

1. § 5822(a)(3)

2. § 384

Virginia

Laws

Title 40.1 (Labor and Employment)

Income Tax Rate (Individual)

Individual Income Tax Rate – 2% to 5.75%

Minimum Wage ($/hr)

Minimum Wage – $7.25

Sources

1. § 58.1-320

2. § 40.1-28.10

Washington

Laws

Title 49 (Labor Regulations)

Income Tax Rate (Individual)

Individual Income Tax Rate – 0%

Minimum Wage ($/hr)

Minimum Wage – $13.50

Wage Rate Exceptions:

• Seattle – $15.75

• SeaTac – $16.34

Sources

1. § 49.46.010(3)

2. § 49.46.020

Washington D.C.

Laws

D.C. Code Title 32 (Labor)

Income Tax Rate (Individual)

Individual Income Tax – For taxes payable starting Jan. 1, 2022, individual income tax rates will be:

Not over $10,0004% of the taxable incomeOver $10,000 but not over $40,000$400, plus 6% of the excess over $10,000Over $40,000 but not over $60,000$2,200, plus 6.5% of the excess over $40,000Over $60,000 but not over $250,000$3,500, plus 8.5% of the excess over $60,000Over $250,000 but not over $500,000$19,650, plus 9.25% of the excess over $250,000Over $500,000 but not over $1,000,000$42,775, plus 9.75% of the excess over $500,000Over $1,000,000$91,525, plus 10.75% of the excess over $1,000,000

Minimum Wage ($/hr)

Minimum Wage – As of July 1, 2021, the minimum wage is $15.20. The wage was set at $15/hr on July 2020, and will increase each year by an amount linked to the Department of Labor’s Consumer Price Index for the region.

Sources

1. § 32–531.01(2)

2. § 32–1003(a)(5)(A)(v)

West Virginia

Laws

Chapter 21 (Labor)

Income Tax Rate (Individual)

Individual Income Tax Rate – 3% to 6.5%

Minimum Wage ($/hr)

Minimum Wage – $8.75

Sources

1. § 11-21-4e

2. § 21-5C-2

Wisconsin

Laws

Chapter 103 (Employment Regulations)

Income Tax Rate (Individual)

Individual Income Tax – 3.86% – 7.65%

Minimum Wage ($/hr)

Minimum Wage – $7.25

Sources

1. § 103.001(5)

2. § 71.06

3. § 104.035

Wyoming

Laws

Title 27 (Labor and Employment)

Income Tax Rate (Individual)

Individual Income Tax Rate – 0%

Minimum Wage ($/hr)

Minimum Wage – $5.15 (however, employers must pay the federal minimum)

Sources

1. § 27-4-201

2. § 27-4-202