Wage and Hour Division (WHD)

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FOH Field Operations Handbook
Chapter 64 Employment of Workers with Disabilities at Special Minimum Wages under Section 14(c)
Section 64g Issues Requiring Special Attention

Section 64g05: Commensurate Wages

• Section 14(c) permits employers to pay workers who are disabled for the work being performed a commensurate wage - a SMW based on the worker's individual productivity in proportion to the wage and productivity of experienced workers who do not have disabilities performing essentially the same type, quality and quantity of work in the vicinity in which the worker with the disability is employed.
• In order to determine the commensurate wage, the employer must first examine the work to be performed by the employee with a disability, and through the use of an accepted work measurement technique, develop a "standard" that accurately measures the quality and quantity of that same work when performed by workers who do not have disabilities. The commensurate rate is determined by comparing the performance of the worker with a disability against that "standard" for a worker who does not have a disability. Work measurement methods, such as time studies, are used by employers to determine the length of time it should take to perform an operation (or element of an operation).
• "Pooling" of piece rate earnings. Each worker with a disability employed on a piece rate basis should be paid the full earnings resulting from his or her own productivity. Wage Hour discourages the pooling of earnings since an employer may not be fulfilling commensurate wage responsibilities to each individual worker. Employers may "pool" earnings only when piece rates cannot be established for each individual worker and should make ever effort to objectively divide the earnings according to the productivity level of each individual workers (see Regulations 29 CFR Part 525.12(i)).
• Behavior or general work habits, such as cleanliness, attitude or attendance, must not be considered when establishing commensurate wage rates because they are not objective measures of production. Comments like "accepts criticism," "responds appropriately to visitors," "interacts well with others," and "follows general safety habits" indicate that such behaviors or related factors may have been used when rating the worker with a disability.
• General guidelines for evaluating accuracy of commensurate wage rates.
  1. If the FLSA MW increased during the standard two-year investigative period, verify that the employer reexamined prevailing wage rate data and recalculated commensurate wage rates. An increase in the MW usually affects the prevailing wage rate because of its "ripple effect" on wages paid experienced workers, or because the new MW is greater than the old prevailing wage. The employer's reexamination of the prevailing wage data shall take place no more than 60 days after the date of the increase in the minimum wage.
     • If the prevailing wage used by the employer is less than the new MW, the employer should adjust the wage upward. This adjustment and subsequent recalculation of the initial commensurate wage rate should be completed and effective on the date of the MW increase. After this adjustment has been made, if the prevailing wage is more than the new MW, the employer must still reexamine his or her prevailing wage rate data by contacting the sources of wage information to determine if the information provided earlier has changed.
     • The employer also has the option of making a simple blanket adjustment by increasing the prevailing wage by the same percentage as the increase in the MW.
  2. If the workers are all paid the same wage or if the range of wages is quite narrow, the accuracy of the commensurate wage rate becomes questionable and requires a closer look. Because individuals demonstrate a wide variety of skill levels, if the employer's commensurate wages are actually based on the employees' quantity and quality of work, wages should also reflect this range of skills.
  3. Be sure to check the employer's rounding practices. Piece rates are always rounded up, even though the digit to be rounded is less than the numeral five. Because this practice differs from usual rounding procedures, employers frequently make an error when computing commensurate wages based on piece rates (see also FOH 64i01(b)(2)).