I attended an interesting seminar today, given by a United States DOL official.  The program focused on the application of the Fair Labor Standards Act to entities and organizations that work with disabled individuals, to mainstream them if possible and, also, to provide some income for them for the tasks that are assigned to them.  These employers are able to pay what is referred to as a “sub-minimum wage” for this work, not the $7.25 per hour otherwise mandated.

Section 14, 29 USC 214, of the FLSA covers these workers.  Part 525, 29 CFR 525,  of the Code of Federal Regulations spells out in greater detail the rights and obligations of employers in this industry and what they may do/not do.  As these are (probably universally) non-profit employers, operating on razor-thin budgets, any assessed/alleged deficiency could be devastating, because if the employer is not properly paying the sub-minimum wage,. the measure of damages would be the difference between the wage paid and the current $7.25, for every hour worked.

Some of the more “traditional” FLSA issues, i.e. what constitutes working time, travel time issues, exemption issues are also subsumed in these audits, so it is imperative that these employers scrutinize all of their compensation practices when facing an audit, not just those issues (of which there are many) that pertain to the sub-minimum audit.

Unlike most DOL activity these days, which is primarily complaint driven, these audits are done usually in the form of an entire industry survey, or of all such employers in a given geographic area, without a complaint instigating the audit.  I have good reason to believe that such an audit wave is in effect at this time, so an internal audit, assessing any issues/problems, is a very good idea.

An ounce of prevention….