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Paying less than minimum wage Indiana

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  • Paying less than minimum wage Indiana

    I found the following posted on the Department of Labor's web site under minimum wage coverage.

    We're not a health-care or related company nor do we have sales over $500,000. We also do not participate in interstate commerce.

    Giving this information - would it be possible for me to hire a worker for less-than minimum wage?

    I have the student learner certificate which allows me to pay student learners 85% of minimum wage (minimum wage $7.25 currently and 85% being $6.16). And I already have two student workers at that rate.

    I'm wanting to hire another worker but he's no longer in school and it wouldn't be fare to pay him minimum wage when the other two are making $6.16/hour.

    Wage and Hour Division (WHD)

    (Revised July 2009) (PDF)

    Fact Sheet #14: Coverage Under the Fair Labor Standards Act (FLSA)

    This fact sheet provides general information concerning coverage under the FLSA.

    The FLSA is the Federal law which sets minimum wage, overtime, recordkeeping, and youth employment standards.

    The minimum wage for covered nonexempt workers is not less than $7.25 per hour effective July 24, 2009. With only some exceptions, overtime ("time and one-half") must be paid for work over forty hours a week. Child labor regulations prohibit persons younger than eighteen years old from working in certain jobs and additionally sets rules concerning the hours and times employees under sixteen years of age may work.

    More than 130 million American workers are protected (or "covered") by the FLSA, which is enforced by the Wage and Hour Division of the U.S. Department of Labor.

    There are two ways in which an employee can be covered by the law: "enterprise coverage" and "individual coverage."

    Enterprise Coverage

    Employees who work for certain businesses or organizations (or "enterprises") are covered by the FLSA. These enterprises, which must have at least two employees, are:

    (1) those that have an annual dollar volume of sales or business done of at least $500,000

    (2) hospitals, businesses providing medical or nursing care for residents, schools and preschools, and government agencies

    Individual Coverage

    Even when there is no enterprise coverage, employees are protected by the FLSA if their work regularly involves them in commerce between States ("interstate commerce"). The FLSA covers individual workers who are "engaged in commerce or in the production of goods for commerce."

    Examples of employees who are involved in interstate commerce include those who: produce goods (such as a worker assembling components in a factory or a secretary typing letters in an office) that will be sent out of state, regularly make telephone calls to persons located in other States, handle records of interstate transactions, travel to other States on their jobs, and do janitorial work in buildings where goods are produced for shipment outside the State.

    Also, domestic service workers (such as housekeepers, full-time babysitters,
    and cooks) are normally covered by the law.

  • #2
    The definition of "participating in interstate commerce" has been defined so broadly for FLSA purposes that virtually all employers fall under it. If you make so much as a phone call or buy (or sell) so much as a pencil out of state, that's considered interstate commerce for FLSA purposes. I would be very, very careful about assuming that I was exempt from the FLSA without a very long talk with a US DOL duty officer and/or an attorney who was very well versed in employment law. The law does not care if it would be "fair" to pay your new employee minimum wage when you are paying your student employees less. It would cost you considerably more to make a mistake and end up paying back wages and penalties when your employee filed a wage complaint.
    The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.


    • #3
      And even if you aren't subject to the FLSA, which is unlikely, you might still be subject to state minimum wage laws.
      I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.


      • #4
        I definitely agree with above. However, just out of curiosity what type of business is this?
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