Would it be legal to pay someone an annual salary that would be less then what they would make with minimum wage? For instance:
$10K/year job
40Hrs/wk * 50 Weeks/year = 2000 Hrs/year
$10k / 2000 Hrs = $5/hr
Would this be legal in michigan, seeing how minimum wage is $5.25 (I think)?
Nope. Minimum wage doesn’t just apply to hourly workers, even though the law seems to be stated that way. It requires you to pay an employee for a workweek in an amount at least equal to the minimum wage, multipled by the number of hours worked.
So, then, how does Mayor Bloomberg legally work for $1 a year as Mayor of New York City?
It’s not like the checks are being issued and he’s refusing to cash them. The city is actually only paying him $1 a year.
Zev Steinhardt
Certainly. Workers who are employed for technical or decision-making expertise are exempt from the hourly wage laws, although such people seldom settle for a salary that low. People whose compensation is expected to depend largely on tips or commission are also paid salaries that amount to less than minimum wage.
Now, if you’re talking about a straight-ahead wages-only job, where the boss is trying to circumvent the labor laws by paying a salary, then no, he can’t do that.
The federal wage and hour law (The Fair Labor Standards Act of 1930-something) does not apply to “exempt” employees. For other, “non-exempt” employees, there is a federal minimum wage which must be paid, and overtime of 1.5 times the hourly wage must be paid for every hour worked in a week past the 40th. There is no change in the laws if the non-exempt employee is on salary; his hourly wage must still be the federal minimum wage or higher, and if he works more than 40 hours a week, he must get paid overtime (although, IIRC, the calculation of his overtime rate can be very tricky because, if he really is on salary, his average hourly rate fluctuates depending on whether he worked 40 or 32 hours in the previous weeks).
Exactly what an employee are exempt is a tricky question. It includes typical executive and managerial work, among other things, but simply calling someone an executive or a manager doesn’t work. If you read the labor law trade press (such as the Daily Labor Report, a publication that used to have the most intelligent, sophisticated and, let’s face it, ruggedly handsome reporting staff around, until I stopped writing for it), you won’t have to go very long until you find a report of some retail chain or other getting into trouble for not paying its “assistant managers” overtime; just because you call someone a manger – even if he has supervisory responsibilities over others – that doesn’t make him an exempt employee.
Therefore, I agree with Nametag; you can pay a salaried worker a salary which ends up being less than the minimum wage per hour. This is perfectly legal if and only if the employee qualifies as an exempt employee under the FLSA. (And, as Nametag noted, there are damn few persons who’ll take a legitimately exempt job, such as one for an executive or manager, for that low of a salary.) If you merely call someone exempt and pay them a salary without basing your decision on one of the handful of statutory exemptions, and that salary works out to less than the minimum wage, then you’re breaking the law.
Bloomberg, as mayor, is clearly in an executive capacity such that he’d be an exempt employee. Although I don’t recall whether the FLSA even applies at all to state government employees; I think it probably doesn’t.
This analysis is complicated by state law, which does typically apply to state employees, may have a different minimum wage and different work hour rules, and could even have a different scheme for determining which employees qualify for benefits protection.
–Cliffy
Does anyone know how often NYC workers are paid? In L.A. the workers are paid every other week.
Since you can’t divide $1 evenly by 26, I believe Richard Riordan actually $1.04 per year, getting a $0.04 deposited into an account every two weeks.
If NYC workers are paid every month, the question is whether or not Bloomberg wants to make $0.96/year or $1.08 year.
Can anyone tell a Montanan why the mayor of the Big Apple is working for chickenshit?
Is NYC in such dire straits that it can’t afford to pay a mayor a living wage?
Is Michael Bloomberg trying to out-martyr Guiliani by looking like he’s doing it all for the Good of the People?
Michael Bloomberg is a freakin’ gazillionaire and doesn’t need the money. He does, on the other hand, need the good will.
Bloomberg is freakin’ rich (he founded Bloomberg Financial). So rich, in fact, that his co-op is ritzier than Gracie Mansion, at least in his view – he doesn’t live in the official mayoral residence. His taking the $1 salary was one of his campaign gimmicks, and it isn’t exactly hurting him to honor that promise.
Under CA labor code There is a section stating that people working in managerial capacities of certain types (something like if they have supervisors as subordinates) Thay can be paid no less than double minimum wage. Don’t know where to find a cite but it was on the labor law poster at the amusement park I worked at. Based on that it makes it pretty hard to legally pay a salaried employee less than what a minimum wage employee makes even if they do work 50-60 hours a week.
I’m ambivalent on this. If a public figure takes an important job and can afford to refuse the salary, or to accept $1/year, it only serves to throw the vast gulf between us and our leaders into even sharper relief. I think he should have just taken the salary and quietly donated it to some charity, or perhaps something that would benefit the municipal workers.
Man, I never heard of that. As a matter of fact, full-time carnival ride operators used to be exempt from the California minimum wage law. I’ve never heard of any true managers having a “minimum salary.”
There’s something wrong with that?
I was in the restaraunt business (lower and mid level management) in TEXAS for years and we (the managers and assistants) joked about not dividing our salaries by the hours that we actually worked because our minimum wage workers made more per hour, we were paid salary “based on a 54 hour week” but it was not possible to do the job in 54 hours (I worked an average of 80), this scared me away from salaried positions for a long time.
unclviny
Amusement parks don’t get away with alot of the stuff that carnivals do their staff is far less transient. Carnival type operations like farm labor (also OT exempt IIRC) are OT exempt due to their heavily seasonal/crunch time nature. This allows them to work their people heavily and rack up hours so they can save money for the “off season” I dunno if carnivals and such would “bank” hours for workers but it might work well if they did. This was discussed at my park for a while but nobody would agree to it. (just getting to get interest on banked payroll funds would seem to be immensely worth it).
I will check on a cite for the code section
I don’t remember exact numbers, so please forgive me, but I seem to recall from once actually reading the minimum wage poster employers have to hang up that if a company has less than a certain number of employees, the company is exempt from federal minimum wage laws and is subject to state minimum wage laws (in Ohio, I believe the state minimum is still $3.35). So a small business in Ohio with just a few employees could legally get away what you’re trying to do, assuming it could find employees willing to work that cheap, and assuming Ohio hasn’t raised its minimum wage.
“Dollar-a-year” men came to prominence in World War II when corporate executives would leave their companies to work for war related government agencies.
Initially, this was looked upon as a selfless act of patriotism, although investigations by then Senator Harry Truman discovered that many of these men were just using the jobs to funnel defense work back to their old companies.
Such investigations about defense spending made the hitherto unknown Missouri senator a prominent figure and got him a gig as FDR’s VP and then …
Weird. Well, I should have been more precise; under federal law it’s perfectly legal to pay an exempt employee a salary that’s less than he’d make at the hourly minimum wage, as long as the job in question really is something which qualifies for the exemption (and as long as you could find a chump to do it). Under state or local law, YMMV.
unclviny, it sounds to me like your employer may have been in violation of the FLSA, unless the managers and assistants were really doing work that qualified under the Act. (Very frequently, if your title is “Assistant Manager,” you’re not.) However, there are several other factors (such as the size of the company, state law, and other stuff as well which would affect the issue. If you know people who still work there, you might suggest they look in to hiring an employment law attorney; it’s possible that they’re significant back wages. (Of course, it’s also possible that they ain’t.)
–Cliffy