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Exemptions from Minimum Wage and the FLSA

Unknown to many American workers, the Department of Labor has specified dozens of exemptions to minimum wage law. While many of these exemptions are designed to protect employers, they have still been the center of hot debate for decades. Who can get paid less then minimum wage, and why?

Farm workers, seasonal workers, other exempt jobs

The Federal Fair Labor Standards Act (FLSA) has declared certain jobs, including farm workers, seasonal workers, newspaper deliverers, "informal" workers (babysitters, etc) and a variety of others exempt from both state and federal minimum wage law. You can find more exempt jobs at the full list of minimum wage exemptions. These exemptions are intended to allow certain types of business to hire workers for temporary or high-volume positions that they otherwise could not afford to fill, thus helping the economy by creating more jobs.

Tipped employees

Any worker who earns regular tips (specified as earning at least $30 in tips a month by the FLSA) is eligible for a special minimum wage rate. Employers are permitted to pay tipped employees an hourly cash wage of as little as $2.13/hr- however, if this wage and the tips earned during that hour do not add up to at least the applicable minimum wage, the employer must make up the difference in cash. Thus, tipped employees are guaranteed to earn at least minimum wage, and can earn more then minimum wage in tips.

Minors and young workers

The "Youth Minimum Wage Program" allows young workers under the age of 20 to be paid a special minimum wage of $4.25 per hour for the first 90 days of employment with any employer. After the first 90 days have passed (or when the employee turns 20, whichever comes first) the employee must be given a raise to the full minimum wage. This exemption is designed to serve as a "training program" for young workers, although many workers and organizations see it as unnecessary and unfair.

Full time and vocational students

Many exemptions apply to student workers, both from high school and college. Certain employers, including retail or service stores, agriculture, or colleges and universities, are permitted to pay full time students as little as 85% of the minimum wage as long as they are registered students (the business must get a certificate allowing them to do so from the Department of Labor under the "Full-Time Student Program"). Furthermore, the "Student-Learner Program" allows any student age 16 or older and enrolled in a vocational school to be hired for as little as 75% of the regular minimum wage (employers must also have a certificate from the DOL). These exceptions are designed to allow businesses to hire inexperienced workers at a reduced rate, and are meant to be an "educational program" for the student workers.

Employees with disabilities

Under the FLSA, any employer can pay sub-minimum wage to any worker with a physical or mental disability that affects the amount and/or quality of their work. Employers must apply for a certificate from the Department of Labor allowing them to hire disabled workers at sub-minimum wage rates. This program is designed to help disabled workers get jobs by making hiring them more attractive to potential employers.

Minimum wage exempt organizations

Certain nonprofit and educational organizations can apply for a certificate from the Department of Labor allowing them to hire workers for as little as 85% of the applicable minimum wage. This is commonly used by colleges and universities, as well as nonprofit organizations.

Sources:

http://www.dol.gov/elaws/esa/flsa/screen75.asp

http://www.dol.gov/compliance/guide/minwage.htm




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