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When the average American works 40 hours a week on the federal minimum wage and their family unit is still under the poverty line, there is something inherently wrong. In America, one has to work 93 hours a week just to accommodate a basic level of living on minimum wage. Working the standard 40 hours a week should grant the worker the right to live above the poverty line.

Section I of this Comment will discuss the need for minimum wage reform by looking at the living wage gap and the benefits of raised minimum wages. This section will also explore the growing social interest in minimum wage reform and the federal gridlock on new minimum wage legislation. Because of this federal gridlock, states and cities across America are taking the lead on raising minimum wages and are reviewed in section II. All of this reform comes at a cost though. Specifically, a cost to businesses in order to comply with new minimum wage laws. These consequences must be considered when enacting minimum wage legislation. Section III will discuss the cost of compliance for businesses and will take a particular look at the unique burden on businesses that hire tipped employees. This section will also look at how businesses have experimented with different approaches in order to survive in today’s market. Finally, in section IV, this Comment will conclude with proposed solutions that will enable minimum wage reform while easing the cost of compliance for businesses.

In finding a fair federal minimum wage, there must be a balance between a living wage and the cost of compliance to businesses.