Fair Labor Standards Act FLSA Section 14c

1
U.S. Department of Labor Employment Standards
Administration Wage and Hour Division Section
14(c) Special Minimum Wage Program Material in
this presentation draws heavily on Regulations 29
CFR Part 525 and this regulation is referenced in
the presentation.
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Commensurate Wages

• Lower than the minimum wage
• Commensurate with wages paid non-disabled,
  experienced workers in vicinity, for essentially
  the same type, quality quantity of work
• Related to individuals workers productivity

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Commensurate WagesCompareWorker with
disabilityagainstJob Standard
4
Prevailing Wage

• Prevailing wage rate is wage paid to an
  experienced worker not disabled for the work,
  performing essentially the same type of work in
  the vicinity.

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Commensurate Pay

• Industry
• Standard

• Consumer
• Performance

100
50
1
2
4 Boxes/hour at 6/hour in the vicinity
2 boxes / hour Commensurate pay3.00
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Prevailing Wage

• Experienced worker is a worker who has learned
  the basic elements or requirements of the work to
  be performed
• ordinarily will have completed a probationary or
  training period
• typically will have received at least one pay
  raise after successful completion of the
  probationary or training period.

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Prevailing Wage

• Vicinity the geographic area from which the
  labor force of the community is drawn
• Employer will normally be required to survey a
  representative number of comparable firms in the
  vicinity that primarily employ workers who do not
  have disabilities for the work being performed.
• A comparable firm is one that is similar in size
  in terms of employees or competes for or bids on
  contracts of a similar size or nature.

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Prevailing Wage

• If comparable work cannot be found in the
  vicinity, the closest comparable community should
  be used.
• If data for the specific job to be performed
  cannot be found, it is acceptable to use the wage
  paid to experienced workers employed in similar
  jobs that require the same general skill levels.

9
Prevailing Wage

• Employer may contact other sources such as the
  Bureau of Labor Statistics, private or State
  employment services where surveys are not
  practical.
• The prevailing wage rate may never be LESS the
  applicable State or Federal Minimum Wage and will
  oftentimes be higher.

10
Prevailing Wage

• When computing prevailing wage, the employer may
  use either a simple average or weighted average
  method, provided a consistent methodology is used.

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Prevailing Wage

• Weighted Average
• Company of Employees Wage Rate Gross
  Wages
• ABC, Inc. 40 5.85 234.00
• KLM Co. 17 5.95 101.15
• XYZ Inc. 25 6.20
  155.00
• 82
  490.15
• Weighted Average 490.15 82 5.9775
  5.98

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Prevailing Wage

• Simple (straight) Average
• Company Wage Rate
• ABC, Inc. 5.85
• KLM Co. 5.95
• XYZ Inc. 6.20
• 18.00
• Simple average 18.00 3 6.00
  

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Prevailing Wage-Special situations

• The employers workforce consists primarily of
  workers who do not have disabilities
• The employer may use as the prevailing wage rate
  the rate paid to his or her experienced workers
  who do not have disabilities who perform similar
  work.

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Prevailing Wage-Special Situations

• Section 14(c) employer has a subcontract to
  perform a job in essentially the same way and
  with the same type of equipment as the prime
  contractor, the sec 14(c) employer may use the
  wage rate the prime contractor pays to his or her
  experienced workers.

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Prevailing Wage

• De-skilling of prevailing wage rates (arbitrary
  downward adjustments made in prevailing wage
  rates to account for differences in duties,
  methods, equipment and responsibilities between
  the work of the worker with disabilities and the
  work done by employees who do not have
  disabilities in competitive industry) is not
  permitted by the Wage Hour Division.

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Prevailing Wage Survey

• Although work center certificates and patient
  worker certificates are now normally issued for a
  2-year period, the employer is still required to
  do an annual review of prevailing wage rate(s)
  and make any necessary adjustments of
  commensurate wages.

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Prevailing Wage Survey

• Workers wages should be adjusted no later than
  the first complete pay period following each
  prevailing wage review.

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Records Required for Prevailing Wage Surveys

• Date of contact with firm or other sources
• Name, address, and phone number of firm or source
  contacted
• Individual contacted within firm or source
• Title of individual contacted
• Wage rate information provided
• Brief description of work for which information
  is provided
• Basis for the conclusion that wage rate is not
  based on an entry level position

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Prevailing Wage

• www.flcdatacenter.com

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Foreign Labor Certification Data Center

• The Foreign Labor Certification Data Center is
  the location of the Online Wage Library for
  prevailing wage determinations, and the
  disclosure databases for the temporary and
  permanent programs. To access our databases or
  downloadable files click one of the links below.

Online Wage Library
FLC Wage Search Wizard
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FLC Data Center

• You have requested data for Michigan
• Select a Data Source
• 7/2009 6/2007 All Industries Database
• Select an area based on County/TownshipBLS
  Areas  
• INGHAM EAST LANSING, MI
• Select an occupation from the list
• 37-2012 Maids and Housekeeping Cleaners

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FLC Wage Results

• Area Code29620
• Area TitleLANSING-EAST LANSING, MI
• OES/SOC Code37-2012
• OES/SOC TitleMaids and Housekeeping Cleaners
• Level 1 Wage7.09 hour - 14,747 year
• Level 2 Wage 8.16 hour - 16,973 year
• Level 3 Wage 9.23 hour - 19,198 year
• Level 4 Wage 10.30 hour - 21,424 year
• GeoLevel 1

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• Level 2 Wage 8.16 hour

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Setting Production Standards

• Write job description
• Write task analysis
• Set the standard
• Work measurement must be verifiable

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Hourly production standards

• Develop job description and task analysis
• Define quality
• Set standard using workers without disability for
  the work
• 3 time measurements recommended
• Length of time study should be one that results
  in rate of production the worker can maintain
  over the course of a full work day

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Work Measurement

• When properly computed, Work Measurement
  accurately reflect the quality and quantity of
  the productivity of the individual worker as
  compared to a worker without disabilities.
• Employers must perform some type of work
  measurement to establish standard production
  rates of workers without disabilities.

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Work Measurement

• Detailed job description and task analysis should
  be developed for the job, including set-up
  activities, packaging, counting, boxing, cleaning
  up activities at the end of day and other
  irregular operations.
• The time studies should utilize the same work
  methods, equipment, and materials used by the
  majority of the workers.

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Work Measurement

• Jigs/fixtures modifications made and used to
  accommodate the special needs of individual
  workers with disabilities or to help them be more
  productive
• A separate time study does not have to be made
  utilizing these special modifications.

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Work Measurement

• Wage Hour encourages the use of three testing
  periods.
• The length of time study should be one that
  measures a rate of production or pace the worker
  can maintain over the course of a full work day.
• The person(s) time studied should represent
  normal or near normal performance.
• The results of any work measurement must be
  verifiable.

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Hourly Evaluations

• Must be based on the workers productivity as it
  compares to the standard of a worker without a
  disability for the quantity and quality of work
  performed.
• An initial evaluation of a workers productivity
  must be made within 1 month after employment
  begins.

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Hourly Evaluations

• Review at least every 6 months thereafter and
  after a worker changes jobs.
• Workers wages should be adjusted no later than
  first complete pay period following the review.

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Hourly Evaluations

• Behavioral factors or general work habits cannot
  be considered when setting hourly commensurate
  wages.
• Personal time, fatigue, and unavoidable delay
  (PFD) allowance is not required in setting hourly
  standard.

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Hourly Evaluations

• FLSA section 14(c)(1)(B) and Regulations 29 CFR
  Part 525 require that the wages paid workers with
  disabilities be commensurate with those paid
  experienced workers who do not have disabilities
  employed in the vicinity for essentially the same
  type, quality, and quantity of work.
• One common method used by employers to ensure
  both quantity and quality are properly considered
  is use of the 90/10 form.

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RATING FORM FOR ESTABLISHING WAGE RATES (Worker
is to be rated at least once every six months)
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Hourly Evaluations

• Another common method employers use to ensure
  that both quantity and quality are properly
  considered is rework.

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9/2/04
Vacuum hall
10 min
10 min
20 min
10 min
50
50
8.00
8.00
4.00
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Calculating the Hourly Wage using ReworkFilling
out the Rework Hourly Wage Determination Form

• Employee name of the employee being evaluated.
• Date/Time
• Name and Title of Evaluator person who did the
  actual timing and recording.
• Location where the time study took place.
• Date date that the tasks were performed and
  timed. Can record up to five different tasks or
  five different timings of the same tasks or a
  combination of both.
• Tasks Performed brief description of the work
  being timed.
• Elapsed Time (A) total time taken by the
  employee to complete the entire task.
• Rework Time (B) should include time needed to
  finish the task so that it is 100 complete (I.e.
  quality is 100.)

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Rework continued

• Total Time (C) add the elapsed time and the
  rework time to get the total time.
• Standard Time (D) time that has been established
  as the production standard to complete the task
  as described.
• Productivity (D/C) divide the standard time by
  the elapsed time to get the productivity rating
  for task being performed. Shown as a percent.
• (a) divide the total of the standard times by
  the total of the elapsed times to get the total
  productivity rating for quantity.
• (b) record the current, ,prevailing industry
  hourly wage or the current SCA Wage Determination
  Rate (for Federal Service Contracts)
• Hourly Wage Rate multiply the final productivity
  rating (a) by the prevailing industry or SCA wage
  (b). Always round up on this number.

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Hourly Evaluations

• Factoring
• -An employer may rate a worker only on the job
  components actually performed by the worker.
• -An employer may not penalize a worker because
  he/she fails to perform, or is incapable of
  performing certain component(s) of the job.

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Piece Rate vs. Hourly Rate

• Similarities
• Accurate description of the work
• Workers without disability should be familiar
  with the work and be able to maintain consistent
  pace
• Worker with disability paid hourly should also be
  given sufficient time to become familiar with
  work
• Time measurement of workers without disabilities
  for work to set standard or norm
• Require consideration of quantity and quality of
  production
• Quality standard is clearly defined and explained
  prior to time measurement of worker without
  disability and evaluation of worker with
  disability

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Piece Rate vs. Hourly Rate

• Differences
• Worker without disability for work is time
  studied on piece rate
• Worker without disability is time studied to set
  standard and worker with disability to be paid
  hourly is evaluated against standard
• PFD required for establishing piece rate
• PFD not required for establishing hourly rates

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Contact Information

• Tom Sechrist
• Sechrist Associates, LLC
• ctsechrist_at_aol.com
• 440-543-5646