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Summer Help

Summer Help - Hiring Dos and Don’ts


Almost every industry has peak periods when some extra help would be welcome.  Fortunately, if that time of year is during the summer months, you may be able to forge a mutually beneficial relationship with some temporary help through either summer interns or teenage employees. This can be a valuable opportunity for teens to not only get some hard-earned cash, but to learn important job skills.

Many employers do not know that when it comes to youth employment the Fair Labor Standards Act (FLSA), the federal wage and hour law, as well as state and local labor laws not only apply but also add additional restrictions on teen employment. Unpaid internships, in particular, can be a risky proposition for employers. An internship may seem like a good opportunity for the intern to learn and the employer to get a “free” employee for a few months. But the U.S. Department of Labor (DOL) frowns on unpaid work arrangements and can impose stiff penalties on businesses with unpaid internships that do not meet stringent requirements.

Whether teens, summer, or seasonal workers are paid or unpaid, failure to comply with wage and hour laws can prove disastrous with businesses subjected to fines, unpaid overtime claims, and expensive lawyers’ fees. So it is important to understand the risks and legal obligations when hiring summer help. 

Minimum Wage – A Review of the Basics

The FLSA includes minimum wage and overtime rules and covers virtually every employer in the United States. Most importantly, the FLSA mandates that employers pay covered nonexempt employees no less than the current federal minimum wage ($7.25 per hour), with several exceptions. Each exception has very specific criteria, some of which are applicable to teen workers and discussed more below. Nonexempt employees are also eligible for overtime compensation when they work more than 40 hours per week. 

Many states also have minimum wage laws that are set at a higher standard than federal law and limitations on the federal exceptions.  If state and federal laws provide for different minimum wage rates, the employee must be paid the higher of the wage rates.  For more information see DOL’s “My State” page.

Child Labor Requirements – A Must Read for Employers Hiring Teens

The FLSA includes provisions limiting the scope of employment for youth workers under 18 years of age. Keep in mind too, that many state and local laws increase restrictions for child labor. 

Youth ages 14 and 15 years old

Under the FLSA, a youth must be at least 14 years old in order to work in a nonfarm job, which must also be nonmining and nonhazardous.

Job duty restrictions on youth ages 14 and 15 include the following categories:

Hour limitations for youth ages 14 and 15 are as follows:

Youth ages 14 and 15 who are enrolled in an approved “Work Experience and Career Exploration Program” may work up to 23 hours during school weeks and up to 3 hours on school days, including during school hours.

Youth ages 16 and 17 years old

The FLSA allows for youth ages 16 or 17 to work in any non-hazardous job for an unlimited number of hours, provided all other requirements of the FLSA are met. 

Eighteen and older

Upon reaching the age of 18, a youth may perform any job, including hazardous jobs, for an unlimited number of hours.

DOL’s Child Labor Laws advisor provides more information on youth labor restrictions, and state and local laws might add further restrictions on youth employment.

Subminimum Wage – Exceptions to the Minimum Wage Requirement

The FLSA does provide exceptions to the federal minimum wage and overtime requirements, which may be applicable to summer help. But each exemption has stringent requirements that must be met, and state laws may add further prohibitions and limitations.

Employees under 20 years old may be paid $4.25 per hour during their first 90 consecutive calendar days of employment.  After the first 90 days or the employee reaches the age of 20, the employee must be paid at or above the standard minimum wage.  In order to be eligible for this exception, the employee must not displace other workers. 

“Tipped” employees may be paid by the employer a subminimum wage of $2.13 per hour.  If a tipped employee does not receive in tips and hourly wages an amount that equals at least the federal minimum wage, the employer must pay the difference to the employee.  In addition, in order for an employer to use this tip credit provision, the employee must retain all tips and customarily and regularly receive more than $30 per month in tips.  The employer must also inform the employee in advance and be able to show that the employee receives at least the minimum wage when combining the special $2.13 per hour minimum wage and tips. For more on the tip credit exception visit DOL’s webpage, which provides information on state tip credit rules.

Seasonal amusement and recreation workers are exempt from the minimum wage and overtime provisions if employed by amusement or recreational establishments, including organized camps, or religious or nonprofit educational conference centers, if either: (A) the establishment does not operate for more than seven months in any calendar year, or (B) during the preceding calendar year, the establishment’s average receipts for any six months of such year were not more than 1/3rd of its average receipts for the other six months of the year.

Full-time students who are employed in retail or service stores, agriculture, or colleges and universities may be paid 85 percent of the minimum wage but only if the employer first obtains a certificate from the DOL under the “Full-Time Student Program.”

Student learners who are high school students at least 16 years of age and enrolled in vocational education courses may be paid 75 percent of the minimum wage but only if the employer first obtains a student learner certificate from the appropriate Regional Office of DOL’s Wage and Hour Division. 

Workers with disabilities whose earning or productive capacity is impaired by physical or mental deficiency or injury may be paid less than the standard minimum wage, but only if the employer first obtains a certificate from the appropriate Regional Office of DOL’s Wage and Hour Division.

Unpaid Internships – Tread Carefully!

This category, or exception to the minimum wage rule, has received much scrutiny from DOL in recent years. In an effort to curb abuse of unpaid internships, the department has laid out specific criteria for what it considers a true “unpaid” intern. Workers who do not meet the criteria, regardless of title, must be paid the minimum wage and overtime. DOL has six criteria for determining who qualifies as an “intern”: position. Internships should be of fixed duration, and should not be considered “trial periods.”  

The strictness of federal law means that, when in doubt, it is usually better to pay a worker. Businesses that cannot afford paid interns should work with a university, high school, or trade school to establish a legitimate unpaid internship in exchange for educational credit.

Penalties for violations of wage and hour laws

Failing to comply with wage and hour rules exposes a business to significant liability, as litigation statistics paint a dismal picture for employers.  Some studies estimate that 70 percent of employers are out of compliance with wage and hour laws. 

Employees with wage and hour complaints may either contact DOL to report possible violations or bring suit on their own against the employer.  Employers can be liable either civilly or criminally for FLSA violations. Civilly, an employer may be fined up to $1,100 per minimum wage or overtime pay violation.  Child labor laws can result in fines of $10,000 for each child worker employed illegally.  There is also potential personal liability for employers with substantial authority over operations and terms and conditions of employment.  Criminally, FLSA violators are subject to fines and multiple offenses may result in prison time.

For More Information

Visit DOL’s website or call the Wage and Hour division at 866-4USWAGE. You may also download a copy of the National Federation of Independent Business’s Guide to Wage and Hour Laws at http://www.nfib.com/legal-center/legal-guide-series.

Contributed by Elizabeth Milito, Esq., National Federation of Independent Business

The National Federation of Independent Business is the nation’s leading small business association, representing 350,000 members across the United States. Elizabeth Milito serves as Senior Executive Counsel with NFIB’s Small Business Legal Center and frequently counsels businesses facing employment discrimination charges, wage and hour claims, wrongful termination lawsuits, and in most other areas of human resources law.

 

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