Mason-Draffen, a business reporter, writes a column about workplace issues.
DEAR CARRIE: I was wondering if you can clarify the law on minimum wages for minors. My son was offered a camp job that will pay him just $300 for an entire summer. And there is no tipping for this position. I find the labor laws confusing because they talk about minors having to earn at least the minimum wage. One exception is seasonal employment. If my son works only during the summer but the camp is open for other activities during the year, is this employer seasonal? This just seems like slave labor for a minor, but most of all I don’t know if it’s legal. — Mom in Disbelief
DEAR MOM: I frequently receive this question from parents of young people about to make their debut as summer camp employees. You asked a key question, “Is this employer seasonal?” That’s important because seasonal businesses are exempt from minimum wage and overtime requirements. So if the camp is indeed seasonal, your son could legally be paid the scant wage you mentioned. What’s more, he doesn’t have to be paid overtime if he works more than 40 hours a week.
That said, a business can’t just declare itself seasonal. Instead, it has to meet one of two tests, under the Fair Labor Standards Act.
The first says that the business cannot operate for more than seven months in any calendar year. That doesn’t include offseason maintenance, however.
“If an establishment engages only in such activities as maintenance operations or ordering supplies during the off season, it is not considered to be operating,” the U.S. Labor Department says.
You note that the camp is open for other activities. If that’s not just maintenance, then the second test would be considered.
It says that if the business’ monthly sales average for its six slowest months doesn’t exceed 33 1⁄3 percent of the average for its six busiest months, then the enterprise would be considered seasonal.
It may be difficult for you to determine if the camp meets the criteria or not. So I would suggest you call the U.S. Labor Department at 516-338-1890 for more information.
DEAR CARRIE: My son works for a small company and pays $45 a week for his medical insurance. His employer takes the money out of his salary after taxes. Is this legal? My husband’s employer takes medical insurance payments out before taxes. My son makes just $30,000 a year; so money is tight, and he could use any extra he is owed. — TAXING QUESTION
DEAR TAXING: It’s legal, the IRS said.
“Employers can generally exclude the value of health benefits they provide to an employee from the employee’s wages,” a New York district spokeswoman said.
But she said companies could also offer their employees a pretax option if the businesses participated in a cafeteria plan. Those plans allow employees to deposit pretax dollars into an account, such as a flexible spending account, which they can tap throughout a benefit year to be reimbursed for health care expenses.
“There are various types of cafeteria plans, but they benefit both the employee and the employer,” the spokeswoman said.
The benefit is that both your son and his company could save on taxes. That means your son would have more take-home pay.
Maybe his employer is unfamiliar with cafeteria plans and the ill effect for employees when a company doesn’t offer them.
“The employer may not be aware of the effect on employees of them not participating in one of these plans, or they may not understand the taxation process on this issue,” the spokeswoman said.
So your son should make the next move and talk to a company executive about the possibility of offering a cafeteria plan.