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Recordkeeping Requirements and the Payment of Special Minimum Wages Under FLSA Section 14(c)

All employers covered by the provisions of the FLSA must maintain certain records. Fact Sheet No. 21, Recordkeeping Requirements Under the Fair Labor Standards Act (FLSA), provides a summary of these requirements.

The Immigration Reform and Control Act made all U.S. employers responsible to verify the employment eligibility and identity of all employees hired to work in the U.S. after November 6, 1986. To implement the law, employers are required to complete Employment Eligibility Verification forms (Form I-9) for all employees, including U.S. citizens. Community Rehabilitation Programs (CRPs) and other employers often forget that they must verify the employment eligibility of workers with disabilities who receive special minimum wages (SMWs). For more information about this requirement and the proper completion of the Form I-9, you may wish to visit the U.S. Citizenship and Immigration Services Web site.

In addition, all employers who employ workers with disabilities at SMWs must also maintain and make available to investigators of the Wage and Hour Division (WHD) the following records:

  • Records that document that the workers who are paid SMWs have disabilities that impair their productive capabilities as required by FLSA Section 14(c). Such records could include medical, psychiatric and/or psychological tests (conducted by an individual with a Masters Degree or higher in an appropriate field) that support the nature of the disability(ies). In addition, staff notes detailing how the disability affects productivity are useful tools to support how the disability impacts the worker’s productivity.

  • Records that document the accuracy and timeliness of the employer's establishment of prevailing wages. These must include the following:

  • Date of contact between the employer and the businesses surveyed
  • Name, address and phone number of each firm contacted
  • Names and titles of the individuals contacted within each firm
  • The wage rate information provided by the comparable employers and the basis for concluding that each rate submitted was not based upon an entry-level position
  • A description of work for which wage information was collected
  • Records of the time measurements the employer conducted to establish the standard for each job for which workers with disabilities are paid special minimum wages.

  • Records of the productivity ratings of the workers with disabilities that document that the ratings were conducted properly and in a timely manner and that employee wages were adjusted accordingly by the end of the next pay period.
  • Records identifying time spent by employees with disabilities at the employer’s establishment or in transit that are not considered hours worked and not compensable, such as receiving vocational or life skills training, receiving medical treatment, home-to-work travel and performing simulated work.

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