1996 minimum wage rules for JTPA participants

U.S. DEPARTMENT OF LABOR
Employment and Training Administration
Washington, D.C. 20210
CLASSIFICATION: JTPA
CORRESPONDENCE SYMBOL: TDC
ISSUE DATE: February 3, 1997
RESCISSIONS:
EXPIRATION DATE: Continuing

TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 04-96

TO: ALL STATE WORKFORCE LIAISONS; ALL STATE WORKER ADJUSTMENT LIAISONS; ALL STATE EMPLOYMENT SECURITY ADMINISTRATORS; ALL ONE-STOP CAREER CENTER SYSTEM LEADS

FROM: BARBARA ANN FARMER, Administrator for Regional Management

SUBJECT: Minimum Wage Provisions

1. Purpose. To provide guidance on amendments to the Fair Labor Standards Act of 1938 (29 U.S.C. 203(m)), including the Minimum Wage Increase Act of 1996.

2. Background. The amendments to the Fair Labor Standards Act (FLSA) became effective October 1, 1996. Questions have been raised about two of the provisions of this legislation -- minimum wage increases and the new Opportunity Wage.

   As indicated in the guidance section below, the new Opportunity Wage does not apply to the JTPA. This provision permits the payment of $4.25 an hour during the first 90 consecutive calendar days after such employee is initially employed. Under this provision, no employer may take any action to displace employees (including for purposes of hiring individuals at the wage authorized). This subsection applies only to an employee who has not attained the age of 20 years.

3. Guidance. The FLSA amendments must be viewed in terms of the Job Training Partnership Act (JTPA).

   The FLSA minimum rates referred to in section 142(a)(2) and (3) can only be the currently applicable rate set forth in section 6(a)(1) of the FLSA -- currently at $4.75. Section 142(a)(2) of the JTPA establishes that individuals in on-the-job training shall be compensated at the same rates as similarly situated employees or trainees, but in no event less than the higher of the rate specified in section 6(a)(1) of the FSLA or applicable State or local minimum wage law. Section 142(a)(3) of the JTPA establishes the requirements for payment of wages. Individuals employed in activities authorized under the Act shall be paid wages which shall not be less that the highest of: (A) the minimum wage under section 6(a)(1) of the FLSA, (B) the minimum wage under the applicable State or local minimum wage law, or (C) the prevailing rates of pay for individuals employed in similar occupations by the same employer. We believe the FLSA minimum rates referred to in section 142(a)(2) and (3) can only be the currently applicable rate set forth in section 6(a)(1) of the FLSA. It is significant that the Congress saw fit to amend the JTPA in 1992 in order to expressly authorize that exceptions set forth in section 6 of the FLSA regarding Puerto Rico and American Samoa to the rate set forth in FLSA 6(a)(1) be deemed to be the FLSA section 6(a)(1) rate for the purposes of section 142(a)(2) and (3) of the JTPA. The amendments to the FLSA did not contain any further changes to the JTPA regarding the new Opportunity Wage.

   The provision under the amendments to FLSA, MINIMUM WAGE INCREASE, applies to participants enrolled in programs operated under the JTPA. Effective on October 1, 1996, the amendments required that not less than $4.75 an hour must be paid for employment under the JTPA and not less than $5.15 an hour beginning September 1, 1997.

4. Action Required. States are requested to provide this guidance to appropriate officials within the State and within the SDAs/SSAs to ensure that employment under the JTPA is paid at the appropriate level which began on October 1, 1996.

5. Inquiries. Questions should be directed to your Regional Office.