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Fair Labor Standards Act FLSA Section 14c

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... workforce consists primarily of workers who do not have disabilities ... Time measurement of workers without disabilities for work to set standard or norm ... – PowerPoint PPT presentation

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Title: 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.
2
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

3
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.

5
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
6
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.

7
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.

8
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.

11
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

12
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

13
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.

14
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.

15
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.

16
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.

17
Prevailing Wage Survey
  • Workers wages should be adjusted no later than
    the first complete pay period following each
    prevailing wage review.

18
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

19
Prevailing Wage
  • www.flcdatacenter.com

20
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
21
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

22
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

23
  • Level 2 Wage 8.16 hour

24
Setting Production Standards
  • Write job description
  • Write task analysis
  • Set the standard
  • Work measurement must be verifiable

25
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

26
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.

27
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.

28
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.

29
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.

30
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.

31
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.

32
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.

33
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.

34
RATING FORM FOR ESTABLISHING WAGE RATES (Worker
is to be rated at least once every six months)
35
Hourly Evaluations
  • Another common method employers use to ensure
    that both quantity and quality are properly
    considered is rework.

36
9/2/04
Vacuum hall
10 min
10 min
20 min
10 min
50
50
8.00
8.00
4.00
37
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.)

38
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.

39
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.

40
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

41
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

42
Contact Information
  • Tom Sechrist
  • Sechrist Associates, LLC
  • ctsechrist_at_aol.com
  • 440-543-5646
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