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

A Word about De-Skilling - Arbitrary Adjustments to the Prevailing Wage

Employers may be tempted to make arbitrary adjustments in the prevailing wage to account for differences in duties, methods, equipment and responsibilities between the work done by employees receiving special minimum wages and work done by employees who do not have disabilities in competitive industry. This practice, known as "de-skilling," is not permitted. If the employer is unable to find comparable jobs to survey, prevailing wage data should be collected on similar jobs requiring the same general skill levels. The following is an example of de-skilling:

Assume that the properly determined prevailing wage for packaging-by-hand is $8.00 and that the hand packing job performed in competitive industry normally includes the following steps: counting bolts, placing a label on the bag the bolts go in, putting 10 bolts into the labeled bag, putting 24 filled bags into a box for packing and then sealing the box.

De-skilling occurs when the employer lowers the prevailing wage because the workers with disabilities do not perform all components of the job that was surveyed. The workers with disabilities may not perform all components of the job because of the manner in which the work was assigned, because they are unable to or refuse to perform certain of the work components, or the particular contract being performed does not require all of the components.

An example of de-skilling would be when the employer, for whatever reason, decided that labeling the bags is not as difficult as counting 10 bolts and therefore the SMW of an employee who only performed labeling should be based on a prevailing wage of $7.25 an hour rather than $8.00. The same would be true if the employer decided that the SMW of an employee who only sealed the boxes should be based on a prevailing wage of $7.50 an hour.

De-skilling is an inappropriate adjustment to the prevailing wage that adversely impacts the commensurate wage. Some employers may also attempt to reduce commensurate rates when evaluating the performance of workers with disabilities by penalizing them for not performing all components of a job. This process, known as factoring, is also not permitted.

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