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Fair Labor Standards Act (FLSA) - Special Minimum Wages

Certain establishments may have a certificate from the U.S. Department of Labor (DOL) authorizing the payment of Special Minimum Wages (SMW) to workers who are disabled for the work they are performing. Authority to pay special minimum wages to workers with disabilities for the jobs they are performing applies to work covered by the Fair Labor Standards Act (FLSA), McNamara-O'Hara Service Contract Act (SCA), and/or Walsh-Healey Public Contracts Act (PCA). This authority is found in Section 14(c) of the FSLA.

These special minimum wages are referred to as "commensurate wage rates" and are less than the basic hourly rates stated in an SCA wage determination and less than the FLSA minimum wage.

A "commensurate wage rate" is based on the worker’s individual productivity, no matter how limited, in proportion to the wage and productivity of experienced non-disabled workers performing essentially the same type, quality, and quantity of work in the geographic area from which the labor force of the community is drawn.

Workers With Disabilities

Section 14(c) of the FSLA does not apply unless the disability actually impairs the worker's earning or productive capacity for the work being performed. The fact that a worker may have a disability is not in and of itself sufficient to warrant the payment of a special minimum wage.

For purposes of payment of commensurate wage rates under a certificate, a worker with a disability is defined as:

·      An individual whose earnings or productivity capacity is impaired by a physical or mental disability, including those related to age or injury, for the work to be performed.

·      Disabilities that may affect productive capacity include blindness, mental illness, mental retardation, cerebral palsy, alcoholism, and drug addiction. The following do not ordinarily affect productive capacity for purposes of paying commensurate wage rates: educational disabilities; chronic unemployment; receipt of welfare benefits; nonattendance at school; juvenile delinquency; and correctional parole or probation.

Certification

Employers must obtain an authorizing certificate from the DOL Wage and Hour Division prior to paying special minimum wages to employees who have disabilities for the work being performed. Certificates covering employees of work centers and patient workers normally remain in effect for two years. Certificates covering workers with disabilities placed in competitive employment situations or School Work Exploration Programs (SWEPs) are issued annually.

See the Fair Labor Standards Act (FLSA) - Certification for Special Minimum Wage topic for comprehensive information about the certification process.

Key Elements of Commensurate Wage Rates

·      Non-disabled worker standard: The objective gauge (usually a time study of the production of workers who are not disabled for the job) against which the productivity of a worker with a disability is measured.

·      Prevailing wage rate: The wage paid to experienced workers who are not disabled for the same or similar work and who are performing such work in the area. Most SCA contracts include a wage determination specifying the prevailing wage rates to be paid for SCA covered work.

·      Evaluation of the productivity of the worker with a disability: Documented measurement of the production of the worker with a disability (quantity and quality).

The wages of all workers paid commensurate wages must be reviewed and adjusted, if appropriate, at periodic intervals. At a minimum, the productivity of hourly paid workers must be reevaluated every six months and a new prevailing wage survey must be conducted at least once every twelve months.

Overtime

Generally, if you are performing work subject to the FLSA, SCA, and/or PCA, you must be paid overtime at least 11/2 times your regular rate of pay for all hours worked over 40 in a workweek.

Child Labor

Minors younger than 18 years old must be employed in accordance with the child labor provisions of FLSA. No persons under 16 may be employed in manufacturing or on a PCA contract. See the Fair Labor Standards Act (FLSA) - Child Labor topic for more information.

Fringe Benefits

Neither the FLSA nor the PCA have provisions requiring vacation, holiday, or sick pay nor other fringe benefits such as health insurance or pension plans. SCA wage determinations may require such fringe benefit payments (or a cash equivalent). Workers paid under a certificate authorizing commensurate wage rates must receive the full fringe benefits listed on the wage determination.

Worker Notification

Each worker with a disability and, where appropriate, the parent or guardian of such worker, must be informed orally and in writing by the employer of the terms of the certificate under which the worker is employed.

Petition Process

Workers with disabilities paid at special minimum wages may petition the Administrator of the Wage and Hour Division of the Department of Labor for a review of their wage rates by an Administrative Law Judge. No particular form of petition is required, except that it must be signed by the worker with a disability or his or her parent or guardian and should contain the name and address of the employer. Petitions should be mailed to: Administrator, Wage and Hour Division, U.S. Department of Labor, Room S-3502, 200 Constitution Avenue, N.W., Washington, D.C. 20210.

Additional Information

For additional information, you may call the U.S. DOL Wage-Hour toll-free information and helpline, available 8am to 5pm in your time zone, at 1-866-4USWAGE (1-866-487-9243).

You may also visit the DOL Wage-Hour website at:
http://www.dol.gov/esa/whd/

For more information about the special minimum wage in specific situations, contact your local U.S. Department of Labor Wage and Hour District Office. It is listed in most telephone directories under United States Government, Labor Department. Contact information and service areas, listed by State, are available online at:
http://www.dol.gov/esa/contacts/whd/america2.htm

See the Regulations, 29 CFR Part 525, Employment Of Workers With Disabilities Under Special Certificates, for detailed information concerning Section 14(c) of the FLSA. These Regulations may be found online at
http://www.dol.gov/dol/allcfr/ESA/Title_29/Part_525/toc.htm

Also see:

Fair Labor Standards Act (FLSA) - Overview

Fair Labor Standards Act (FLSA) - Coverage

Fair Labor Standards Act (FLSA) - Exemptions

Fair Labor Standards Act (FLSA) - FAQ

Fair Labor Standards Act (FLSA) - Child Labor

Fair Labor Standards Act (FLSA) - Certification for Special Minimum Wages

Source

Information for this topic was drawn from the U.S. DOL web page (requires Adobe Acrobat) at:
http://www.dol.gov/esa/sec14c/index.htm
http://www.dol.gov/esa/regs/compliance/posters/pdf/disabc.pdf

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