General Question

guywithanaccountnow's avatar

It's illegal for an employer to pay less than minimum wage, but what if it's what the employee wants them to do?

Asked by guywithanaccountnow (313points) August 14th, 2012

I can see why it’d be illegal for an employer to withold the minimum amount from an employee who wanted/needed it, but what if it was the employee’s idea to be paid less than minimum wage? What if it caused no hardship for the employee? Does the law allow an exemption for cases like that, or would it still be considered a crime?

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20 Answers

WestRiverrat's avatar

Paying less than minimum wage, except in some service industries where it is assumed tips will make up the difference, is a violation of federal regulations.

I lived in an area where the crew at the saw mill went on strike because they got a raise. It cut into their entitlement benefits. It was finally resolved when the workers were put on part time and the mill was open only 30 hours a week.

lillycoyote's avatar

Yes, it is illegal, as @WestRiverrat points out. Neither the employer nor the employee can simply choose to violate federal and state wage and hour laws; they cannot just agree, between themselves, to violate federal and state wage, hour and labor laws. They’re like any other laws; it’s not o.k., even if two people mutually agree to violate the law.

Nullo's avatar

You could possibly circumvent the minimum wage law by moving from hourly pay to annual.

WestRiverrat's avatar

@Nullo that is not as easy as it sounds either. Depending on how the job is classified you may be required by law to pay hourly wages whether you want to or not.

bkcunningham's avatar

Your question is intriguing, @guywithanaccountnow. What would be the circumstances that would make someone be willing to take less than minimum wage?

WestRiverrat's avatar

@bkcunningham they would lose their EBT card or medicaid.

bkcunningham's avatar

Someone receiving Medicaid funds can earn a small amount of money during a trial work period, @WestRiverrat. I don’t know all of the details and I’m too lazy right now to research it but I’m sure it isn’t a substantial amount of money. Maybe that is the reason for the question.

To be honest, I was thinking along the lines of wanting a job and training and being willing to accept less than Minimum Wage.

lillycoyote's avatar

@bkcunningham Perhaps an argument could be made, that upon mutual agreement, an employer and an employee could decide that the employee would take a lower wage in exchange for job training. Unpaid internships are certainly legal but the wage and hour laws are pretty clear. I’m not absolutely, 100% sure, but unless your job allows your employer to pay you less than minimum wage, the way it is with waiters and waitresses, for example, and internships and other special categories, no one can “opt out” of following federal labor laws.

And these things can get kind of complicated, but they are pretty well regulated. For example, when I was in graduate school, at U.T. Austin, I was a teaching assistant. The compensation for T.A.s was the stipend and the ability to pay in-state tuition rates if you were an out of state student. I was already paying my tuition at in-state rates and the University was under no obligation to compensate me, in cash, the difference between what I would have saved if I were an out of state student able to pay in-state rates. I just didn’t and couldn’t benefit from that part of a T.A.s “compensation package.”

WestRiverrat's avatar

@bkcunningham you would be surprised at what some people will do to keep their entitlement checks coming in.

Pied_Pfeffer's avatar

Hmm, interesting question. Dad started his own business, and Mom ran the office while he was out making sales calls. She didn’t earn a cent from it. I highly doubt that it was illegal for her not to be paid.

Would it depend upon the size and or type of the company?

gorillapaws's avatar

I could see how such an exemption could be taken advantage of to force desperate people into “volunteering” to sign forms that state they “want” to be paid less than minimum wage. Furthermore it would give an unfair competive advantage to companies willing to exploit such practices, creating a race to the bottom in wages for the most desperate and vulnerable populations.

WestRiverrat's avatar

@Pied_Pfeffer business owners are not subject to the same labor laws as employees. The way marital property works in most states, if one spouse starts a business the other spouse is considered a co owner and thus not subject to normal labor laws.

Pied_Pfeffer's avatar

@WestRiverrat Thank you. This might be the case for the OP. More context would be helpful in answering the question, including the country.

hug_of_war's avatar

I know my boyfriend’s father made less when he got a small promotion because it bumped him into the next tax bracket but the extra pay wasn’t enough to “cover” the cost. Not the same as less than minimum wage of course but you can see some reasoning for why it isn’t always so straightforward.

WestRiverrat's avatar

@hug_of_war your boyfriend’s dad didn’t make less, the government took more from him. It is not the same thing.

seekingwolf's avatar

Nope. Even with an employee WANTING less than min wage, it’s still illegal for the employer to pay less than that.

I can understand why some would want less, if their govt benefits were at stake because they could be dropped for “making too much”. I guess they could take on fewer hours overall, but I’m not sure if that would help matters.

gorillapaws's avatar

@hug_of_war I’m 95% sure that your boyfriend’s father is wrong. When you get a raise you always take home more money. If he took home less money because of taxes it has to be for a different reason like deductions changing for him or something. For someone filing single, you pay 10% on the first $8,700, then you pay 15% on the dollars you earn between $8,700 and $35,350, and then 25% on the money between $35,350 and $85,650. So if he was making $35,000 and got a $2000/year raise, he would only be paying the 25% tax rate on $1650, the rest would be taxed as before, it’s not like the entire salary now gets taxed at 25%. It works similarly for married couples filing jointly, but the brackets are more generous (the principles remain the same). Unless I’m misunderstanding your post.

WestRiverrat's avatar

@gorillapaws not true if the raise was enough to trigger the AMT rates.

LostInParadise's avatar

One reason for agreeing on a wage less than the minimum is that the employer might not be able to afford any wage above it, so it would be a case of either a job at below minimum or no job. I don’t know if this actually happens, but I throw it out as a theoretical possiblility.

The ecomomy has gotten so bad that some people arer willing not to receive income for what is essentially on the job training. Some might consider that a violation of the minimum wage law.

harple's avatar

The point is, if this employer and employee are allowed to do this, then it sets a precedent. And as soon as employers learn that it can be done by mutual agreement, the pressure could then be applied to other employees to agree to similar, or lose their jobs. Then the whole system of a minimum wage collapses.

So, even if one pair of people agree to it because it suits them, it could bring the whole system down. That’s dangerous.

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