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elaws - employment laws assistance for workers and small businesses - FLSA Section 14(c) Advisor

A Reminder About “Rounding” Under Section 14(c)

FLSA Section 14(c) requires that workers with disabilities for the work performed who receive special minimum wages (SMWs) must receive at least the commensurate wage for all hours worked.

An employer who follows the normal business rules of rounding - rounding “up” only when the last decimal point is a five or higher - may actually be underpaying workers with disabilities.

Although the underpayment per unit produced or per hour worked would be very small, the eventual back wage liability could be quite large considering the number of units that could be produced or hours worked over an extended period of time by a number of different workers. This can be avoided by carrying computations out to the fifth decimal and then always rounding up to the fourth place.

The U.S. Department of Labor Wage and Hour Division will accept as compliance the practice of carrying out computations to the fifth decimal point and then rounding up to the fourth decimal place when computing SMWs due workers with disabilities under FLSA Section 14(c). Of course, an employer may choose to round “up” sooner than the fifth decimal point.

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FLSA Section 14(c) Advisor | Wage and Hour Division