Can You Pay Less Than Minimum Wage

If your business could use extra help and you are interested in providing teenagers with valuable work experience, you might be able to hire them at less then minimum wage while they train. Getting that first job is tough for teenagers since they have no work history to prove themselves and employers hesitate to take a chance on inexperienced employees. That double-edged sword can be hard to overcome. That’s why the federal government allows employers to hire teenagers at a lower initial wage. 

Here’s how it works:

An amendment to the Fair Labor Standards Act (FLSA) allows employers to pay youth a minimum wage (for individuals under the age of 20) of not less than $4.25 per hour for the first 90 consecutive calendar days after employment begins. After 90 days, or when the worker reaches age 20, the employer must start paying the minimum wage.

Which Employers Can Use the Youth Minimum Wage?

Any employer that is covered by the FLSA

can hire eligible employees at the youth minimum wage, provided state or local law does not conflict. In states which have enacted a minimum wage higher than the federal minimum wage (currently $7.25) and which make no exception for the employment of teenagers, the youth minimum wage is not available. (The right-hand box provides links to your state’s labor department.)

The 90-Day Period Defined

The 90-day period of eligibility during which the sub-minimum wage can be paid begins on the first day of work for a given employer, and continues for 90 consecutive calendar days, not work days. The date of hire and the date of the job offer are irrelevant. The number of days the teenager actually works is also irrelevant.

Other Important Points:

• Employers are not required to provide specific training during the 90-day period.
• If the 90-day period is interrupted, it will still expire at the end of 90 consecutive calendar days. For example, if a teenager working for you on the youth minimum wage begins work and continues for 60 calendar days and then leaves to attend college, his or her eligibility period will still end 30 days after quitting. That teenager cannot return and work under the youth minimum wage after that the expiration of that time.
• Occupations such as babysitting are not subject to the minimum wage law.

Employee Protections

Employers cannot terminate existing staff or reduce their hours in order to hire teenagers under the youth minimum wage. If a staff member is displaced in this way, the employer may be required to compensate the displaced employee for lost wages and benefits that result. 

In addition, businesses are prohibited from hiring employees who qualify for the youth minimum wage and then terminating them after 90 days in order to hire another such person at the youth minimum wage. 

For more information from the U.S. Labor Department, click here.