Subminimum wage

Scope

Various exceptions to the prevailing minimum wage (a subminimum wage) apply under specific circumstances to tipped workers, workers with disabilities, full-time students, youth under age 20 in their first 90 consecutive calendar days of employment, and student-learners. The following summarizes the FLSA provisions, but state laws may differ.

Regulatory citations

• None

Key definitions

• None

Summary of requirements

Tipped workers. Under the FLSA, an employer of a tipped employee is only required to pay $2.13 an hour in direct wages if:

• That amount plus the tips received equals at least the federal minimum wage,
• The employee retains all tips, and
• The employee customarily and regularly receives more than $30 a month in tips.

If an employee’s tips combined with the employer’s direct wages of at least $2.13 an hour do not equal the federal minimum hourly wage, the employer must make up the difference.

Some states have minimum wage laws specific to tipped employees. When an employee is subject to both the federal and state wage laws, the employee is entitled to the provisions of each law which provide the greater benefits. State laws commonly require a higher base wage, or limit the amount of tip credit that may be taken.

Disabled workers. Any individual whose earning or productive capacity is impaired by a physical or mental disability, including those related to age or injury, may be paid sub-minimum wages when the impairment is certified by the Labor Department (DOL). The sub-minimum wages must be comparable to wages paid to non-disabled workers. The DOL authorizes employment at less than the minimum wage to increase opportunities for disabled workers to be employed.

Employers interested in applying for a sub-minimum wage certificate for disabled workers should contact the Department of Labor Wage and Hour in their region. State laws may be applicable as well, and some states may not recognize this provision.

Young workers. A minimum wage of $4.25 per hour applies to young workers under the age of 20 during their first 90 consecutive calendar days of employment with an employer, as long as their work does not displace other workers. After 90 consecutive days of employment or the employee reaches 20 years of age, whichever comes first, the employee must receive the statutory minimum wage. Again, state laws may not recognize this provision.

Full-time students. The Full-time Student Program is for full-time students employed in retail or service stores, agriculture, or colleges and universities. The employer that hires students can obtain a certificate from the DOL which allows the student to be paid not less than 85 percent of the minimum wage.

The certificate also limits the hours that the student may work to eight hours in a day and no more than 20 hours a week when school is in session and 40 hours when school is out. It also requires the employer to follow all child labor laws. Once students graduate or leave school for good, they must be paid the statutory minimum wage.

There are some limitations on the use of the full-time student program. For information on the limitations or to obtain a certificate, contact the Department of Labor Wage and Hour Region Office for a specific region.

Student learners. This program is for high school students at least 16 years old who are enrolled in vocational education (shop courses). The employer that hires the student can obtain a certificate from the DOL which allows the student to be paid not less than 75 percent of the minimum wage, for as long as the student is enrolled in the vocational education program.

Employers interested in applying for a student learner certificate should contact the Department of Labor Wage and Hour Regional Office with jurisdiction over their state.