A new bill pending in the Georgia Legislature would end a decades-old practice of employers legally paying some workers a wage well below the federal minimum. The legislation currently pending in the state senate is a reminder that, like all aspects of the law, wage and hour law is constantly evolving. To ensure compliance with the latest changes, you should speak to a knowledgeable Atlanta wage and hour lawyer with a fully up-to-date understanding of the law.
Georgia is one of 23 states that have banned subminimum wages or are considering legislation to end them. The legislation, Senate Bill 55, is called the “Dignity in Pay Act” and is a bipartisan initiative with three Democratic and four Republican sponsors.
The Georgia Council of Developmental Disabilities estimated that roughly 250 Georgians worked at jobs paying a subminimum wage. If the bill becomes law, employers currently paying subminimum wages would have to pay all workers an hourly rate at or above the minimum wage by 2027.
The practice of legally permissible subminimum wages goes back to the Great Depression and the original Fair Labor Standards Act. At that time, more than a half-century before President George H.W. Bush signed the Americans With Disabilities Act into law, employers could legally discriminate against workers with disabilities, including refusing to hire them. As a “carrot” to encourage employers to hire workers with disabilities — specifically military veterans with disabilities — Congress included in the FLSA Section 14(c). Section 14(c) allows employers who have applied for (and received) a special certificate from the U.S. Department of Labor’s Wage and Hour Division to pay subminimum wages.
Pay Based on Production, not Hours
Under federal law, these “community programs” can pay certain workers with disabilities based on their production. (In other words, paying a “piece rate” instead of an hourly rate.) Under a “piece rate” mode of payment, an employer bases a worker’s compensation on the employee’s production, not time. To set this rate in a manner that complies with the FLSA, the employer must determine “the standard for workers who do not have disabilities.” That standard represents the “objective gauge against which the productivity of the worker with a disability is measured.” The law also calls upon the employer to determine the “prevailing wage,” which is the pay experienced workers who do not have disabilities receive for the same or similar work.
For example, say an employer determines that the production of its workers without disabilities typically ranges from 8 to 12 pieces per hour. Based on that data, it sets its rate for workers with disabilities at $1.10 per piece. If a worker with disabilities produces four pieces in 20 hours, the employee would receive $4.40, or the equivalent of $0.22 per hour, as was the case with at least one Georgia place of employment, according to the GCDD.
If Senate Bill 55 became law, all of this, including employers’ need to calculate commensurate rates and prevailing wages, would go away, as workers with disabilities would be entitled to compensation at or above the minimum wage floor.
The FLSA is a lengthy and complex federal statute that is frequently challenging to understand and, therefore, to comply with. Noncompliance leaves workers receiving less than they should and leaves employers vulnerable to civil lawsuits. Whether you are an employer or employee, the Atlanta wage and hour attorneys at the law firm of Parks, Chesin & Walbert can help. Our experienced team can help employers ensure FLSA compliance and avoid unnecessary liability exposure for paying illegal wages. We can also aid employees who are paid less than the law says they should have received. Contact us through this website or at 404-873-8048 to schedule a consultation today for the advice and guidance you need.