Minimum wage laws establish an hourly pay threshold that is meant to prevent employers in the United States from under compensating their workers. The federal minimum wage rate is $7.25 per hour, but some states have their own laws that allow for higher pay rates. Although adhering to a minimum wage is federally required by law, there are exceptions to those laws known as “subminimum wage” provisions. Employers who qualify for these exceptions are permitted to pay their workers less than minimum wage.
Which Employers Qualify for Subminimum Wage Exemptions?
Subminimum wage exemptions are permitted in cases of student employment, the employment of some people with disabilities, and workers who earn tips.
The student employment exemptions apply to university students who are employed by their school, as well as “student-learners,” such as people who are performing a trade as part of a vocational school program. Educational institutions, in many situations, are also legally permitted to limit the hours that students can work, often at amounts well under 40 hours per week.
According to the United States Department of Labor, “the Fair Labor Standards Act authorizes employers, after receiving a certificate from the Wage and Hour Division, to pay special minimum wages to workers who have disabilities for the work being performed.” Employers can receive a certificate permitting the payment of lower wages in part by proving an employee with disabilities is not as productive as employees without disabilities.
Tipped employees (for example, those in the foodservice industry) are often paid less than minimum wage per hour, with the expectation that their tips will account for the difference.
Why are Subminimum Wage Exemptions in Place?
The Department of Labor states that “Employment at less than the minimum wage is authorized to prevent curtailment of opportunities for employment.” Essentially, the program was created in hopes that it would give companies an incentive to hire students and people with disabilities. Rather than employers being discouraged because of economic limits, they may be able to hire more people if lower wage rates are an option.
Abuses of the System
In theory, subminimum wages allow more people to get jobs. However, the program lets companies pay people much less than they deserve. In the case of workers with disabilities, companies attempt to quantify the difference in productivity by, for example, “test[ing] the worker’s speed at completing a task compared to an able-bodied person,” explained an article from Vox. Sadly, many businesses manipulate the system and lie in their application for exemption, resulting in wages as low as under $1/hour.
Although federal law does allow subminimum wage exemptions for some businesses, being paid less than minimum wage could be a violation of your rights as a worker. If you are being paid less than minimum wage, contact Donati Law, PLLC. Our attorneys can evaluate your case to determine the legality of your pay rate, and begin pursuing a claim if necessary.To discuss your case during a no-cost consultation, get in touch with our team through our contact form or by calling (901) 209-5500.