Special Minimum Wage

Senator Elizabeth Warren (D-MA) together with six of her Senate colleagues wrote U.S. Department of Labor Secretary Acosta asking for information on the use of Section 14(c) subminimum wage exemption. The letter, which can be found here, calls for a phase-out of 14(c) and also demands the following:

1. The annual number of applications for 14( c) certificates that the Department has received; the number that the Department has accepted for each of the past 10 years, broken down by certificate type (Business Certificate, School Work Experience Program, Community Rehabilitation Program, and Employers of Patient Workers); and the number that the Department has rejected for each of the past 10 years and the reasons for the rejection;

2. The number of individuals working for 14(c) certificate holders on October 1, 2017 and, for each 14(c) holder, a. the average, median, standard deviation, and range of pay earned by workers paid the special minimum wage; and b. the average,  median, standard deviation, and range of the length of employment of workers paid the special minimum wage;

3. The number of individuals who received the subminimum wage under a 14( c) certificate, then, at some point in Fiscal Year 2017, moved to another, higher-paying job that was not covered by a 14( c) certificate;

4. The annual number of applications for renewal of 14( c) certificates, the number of applications accepted, the number rejected, and the reasons for rejecting renewal applications, for the past 10 years;

5. The procedures for evaluating a new application and renewal application for a 14(c) certificate, including any standards or criteria the Department uses to determine if a 14( c)  certificate is "necessary in order to prevent the curtailment of opportunities for employment" and any evidence the applicant is required to provide when the Department is making this determination;

6. The annual number of inspections of 14(c) certificate holders that the Wage and Hour  Division conducts, including as a percentage of total 14( c) certificate holders for the past 10 years, by year, and an annual summary of the results of those inspections;

7. A description of any notable trends that the Wage and Hour Division has observed in the use of 14( c) certificates and the number or nature of violations of the FLSA, terms of certificates among 14( c) certificate holders, and other labor laws in each of the past 10 years; 

8. A detailed description of the Wage and Hour Division's strategy for inspections of 14(c) certificate holders, particularly the process the Department uses to choose which employers to inspect and its allocation of budgetary and personnel resources for doing so, including how these allocations compare to those of the Division's other enforcement functions, and any changes in this strategy or in the allocation of funds or personnel since January 20, 2017;  

9. The annual number of 14(c) certificates that the Wage and Hour Division revoked pursuant to 29 CFR 525.1711 as a percentage of 14(c) holders that the Division has found in violation of the FLSA or the terms of the certificate, as well as the numbers of certificates that the Department has revoked (a) retroactively to the time of issuance, (b) retroactively to the time of violation, and ( c) as of the date of a notice of revocation, respectively, for each of the past 10 years;

l 0. A description of the Department's efforts to implement the recommendations detailed in Chapter Three of the final report of Advisory Committee Report that relate to the Wage and Hour Division's enforcement of 14(c) certificates and the standard that it uses for issuing and renewing such certificates; 12 and

11. A description of any steps the Department has taken to implement each of the recommendations assigned to the Department or any of its agencies in Appendix E of the Advisory Committee Report. 13