If keeping your payroll as lean as possible is your goal, you may be able to take advantage of a lower federal minimum wage. Employees under age 20 can be paid a "youth minimum wage," as low as $4.25 per hour, for the first 90 consecutive calendar days.

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Youth and Interns

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If keeping your payroll as lean as possible is your goal, you may be able to take
advantage of a lower federal minimum wage. Employees under age 20 can be
paid a "youth minimum wage," as low as $4.25 per hour, for the first 90
consecutive calendar days. Another lower federal minimum wage applies to full-
time students as well as high school students enrolled in vocational education
programs (see sidebar).
»
The 90-day clock keeps counting even when the employees are taking off
permissible days, such as weekends and holidays. Ninety days is more than long
enough to cover a summer job. It's also long enough to give you a chance to
assess whether a younger employee -- one who isn't just working for the
summer and wants a permanent position -- is worth the regular federal $7.25
minimum wage. (If your state has a higher minimum wage, which many do,
employers must pay the higher state minimum wage.)
Let's say a young employee quits after 30 days, then returns 30 days later. You
would still be able to pay him the "youth minimum" for 30 days, at which point
the 90 consecutive days will have been used up.
Note: This article describes federal laws and rules. Check to see if your state has
additional regulations and requirements.

3. A Ban on Improbable Abuse
If the young employee turns 20 during that 90-day period, you need to raise
his hourly wage to the standard minimum at that time. Also, the rules do not
allow employers to game the system by hiring employees under age 20 only
to fire them after 90 days and hire new ones. Needless to say, such a policy
would not make business sense under most circumstances anyway.
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Your ability to pay the federal youth minimum wage is not affected by
whether the employee is working at another job and also being paid the
lower minimum wage there.
»
No matter what the pay rate, child labor laws dictate the kinds of work young
people can do at particular ages. The Fair Labor Standards Act generally sets
14 as the minimum age for most non-farm work. However, there are no
minimum ages for delivering newspapers, performing in radio, television,
movie, or theatrical productions. There are also no age minimums for
children working in a businesses owned by their parents -- with the exception
of manufacturing, hazardous jobs or mining.

5. Limits on Hours, Job Categories
Rules for 14-15 year olds also limit the number of hours these employees can
work. For example, the federal daily limit is three hours on school days, and
18 hours a week when school is in session. When they move up to the 16-17
year old age bracket, restrictions on hours worked are lifted, but like the
younger employees, 16 and 17 year old employees are not permitted to work
hazardous jobs.
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How is a hazardous job defined? The U.S.
Department of Labor (DOL) maintains a list of 17
jobs it calls hazardous. They include
manufacturing, driving motor vehicles, roofing,
and work which involves the use of certain kinds
of power tools. The DOL's more complete run-
down on child labor is contained in a document
called Child Labor Bulletin 101 WH-1130.
To stay in compliance, take time to check the
applicable federal laws and regulations, as well as
those in your state.

6. Unpaid Internships
What about unpaid internships? The federal courts are littered with cases
involving interns trying to file class action suits against the organizations
where they are doing their internships, claiming they are de facto employees.
They seek the rights accorded to regular employees, including compensation
no lower than the applicable minimum wage.
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Last May, for example, interns at Hearst Corporation in New York, who had
sought certification as a class, were turned down by the U.S. District Court for
Southern New York. Now, however, the DOL has joined their cause and filed
an amicus brief with the U.S. Court of Appeals for the Second Circuit in
support of their case.
If those interns ultimately win, it would not mean the end of unpaid
internships. However, be aware that it is extremely difficult to comply with
the federal regulations involving unpaid internships. Until the issue is
resolved in the courts, you should have an attorney review any unpaid
program you may have or are considering, to ensure it complies with the
evolving labor law in this arena.

7. Additional Minimum Wage Exceptions
Retailers, "service stores," farmers, colleges and universities
can obtain a certificate from the DOL to get a slight break on
the minimum wage for full-time students. Specifically, they
are permitted to pay 85 percent of that amount. Based on
today's standard federal $7.25 minimum, students could be
paid $6.16 an hour. But the students can work no more than
eight hours a day, up to a maximum of 20 hours a week
when school is in session, and 40 hours when it isn't.
A similar program exists for high school students at least 16 years old enrolled in
vocational education programs. Their minimum is 75 percent of the standard rate.
Also, a fact well-known to restaurant owners is the minimum wage alternative
formula for tipped workers. In many states, the federal minimum hourly cash wage is
$2.13. However, in those states, tipped employees must earn the difference
between the federal $7.25 minimum wage and $2.13 ($5.12 per hour) in tips.
Otherwise, an employer would need to increase the base hourly wage to bring the
total to the federal minimum wage of $7.25.
Note: Some states, including California, Alaska, Oregon and Washington, require
employers to pay workers full state minimum wage before tips.

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