The A-Z Guide to Federal Employment Laws For the Small Business Owner by Berit Everhart

Author:Berit Everhart
Language: eng
Format: epub
Tags: federal employment laws, small business, united states, employees, law, business practices, government requirements
Publisher: Atlantic Publishing Group
Published: 2012-06-21T00:00:00+00:00

Exceptions to Minimum Wage Requirements

Tipped employees

Employees who are tipped by customers may not qualify for minimum wage. This can include a wide range of occupations such as food servers and certain hotel positions. Employees who receive tips must receive a minimum wage of at least $2.13 an hour from the employer and receive at least $30 in tips a month. Additionally, the base pay plus the tips must equal or exceed the minimum wage rate. To qualify for this exemption, an employer must inform employees of the tip credit allowance and be able to show that employees are being paid at least minimum wage when their tips are added to the base pay. Employers also must permit employees to keep all the tips earned.

EVERYDAY ILLUSTRATION

Greg works as a waiter at BB’Q House. As required by the FLSA, BB’Q house pays Greg $2.13 an hour. During Week 1, Greg works 20 hours and makes $200 in tips. During Week 2, Greg works 20 hours and makes $100 in tips. For Week 1, BB’Q House can legally pay Greg $2.13 under the FLSA because he made at least $30 in tips during the month and his overall compensation rate is greater than the federal minimum wage rate. He made a total of $242.60 — ($2.13 x 20 hours) + $200 — over a 20-hour period for a compensation rate of $12.13 an hour ($242.60/20). However, BB’Q House will have to pay Greg more than $2.13 an hour during Week 2 because his total compensation rate was lower than the federal minimum wage rate. He made a total of $142.60 over a 20-hour period for a compensation rate of $7.13 an hour. BB’Q House will have to pay Greg an additional 12 cents an hour, for a total compensation rate of $2.25 an hour, so that he will make at least $7.25 an hour.

Special certificates

Certain employees may be paid less than minimum wage if certain requirements are first met. Employers must obtain special certificates before qualifying to pay the following employees less than the federal minimum wage:

Full-time students

If an employer is a college or university, or is in the retail, service or agricultural industries and hires a full-time student, there are certain exceptions to the minimum wage requirement. Full-time students can be paid 85 percent of minimum wage.

However, full-time students who are paid less than minimum wage can work no more than eight hours a day and 20 hours a week while school is in session. When school is not in session, full-time students can work up to 40 hours a week. Employers must obtain a certificate from the Department of Labor to be able to qualify for this exception.

Vocational students

Employers who hire high school students who are at least 16 years old and are enrolled in vocational education courses can obtain a certificate from the Department of Labor. The certificate will allow the employer to pay the student at least 75 percent of minimum wage for the period of time that the student is enrolled in the vocational education program.

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