Savanna Hoffman
There is much debate surrounding the topic of student employees and whether universities are obliged to pay them the minimum wage. While some universities pay their student employees minimum wage or higher, others pay below the minimum wage, taking advantage of a provision under the Federal Fair Labor Standards Act (FLSA) that allows nonprofit educational organizations to pay student workers less. This has sparked controversy, with critics calling the law exploitative and unfair to vulnerable student employees. However, some universities have taken steps to raise their minimum wage above the state and federal requirements, citing equitable pay and social responsibility as motivations.
| Characteristics | Values |
|---|---|
| Universities paying minimum wage | Some universities pay minimum wage or above to students. |
| Universities not paying minimum wage | Some universities pay below minimum wage. |
| Reasons for paying minimum wage | Equitable pay for all employees, changes in local ordinances, pressure from advocates for low-wage workers, moral obligation. |
| Reasons for not paying minimum wage | A provision under the Federal Fair Labor Standards Act (FLSA) allows nonprofit educational organizations to pay student workers less than minimum wage. |
| Wage rates | Vary from USD 10.50 to USD 16 an hour. |
| Number of students affected | A minimum wage increase in Washington affected 2,600 students. |
| Student employee types | On-campus jobs, work-study programs, off-campus jobs with similar duties. |
| Student reactions | Students have expressed frustration with low earnings and are advocating for change. |
| University responses | Some universities have committed to increasing minimum wage. |
| Legal status | The Department of Labor allows full-time students to be paid not less than 85% of the minimum wage, with limitations on work hours. |
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What You'll Learn
Legal loopholes allowing universities to pay students less than minimum wage
While some universities pay their student employees the minimum wage or higher, there are legal loopholes that allow colleges and universities to pay their full-time student workers less than the minimum wage. This is made possible by a provision under the Federal Fair Labor Standards Act (FLSA), which authorises employers of nonprofit educational organisations to pay student workers less than the minimum wage. This exemption, also known as "subminimum wage", requires employers to pay at least 75% of the federal minimum wage or a percentage of the state minimum wage, whichever is higher. This law is often employed by universities to pay students working on campus jobs significantly less than the minimum wage.
For example, in the state of New York, where the minimum wage is $11.10 per hour, Skidmore College pays its student workers between $9.75 and $10.50 per hour, which is technically legal. Similarly, students at UMKC are paid less than the minimum wage, and a group is fighting for a wage of $25 an hour.
This practice has been criticised as exploitative and unfair, especially considering that many students who qualify for work-study are low-income and struggle to pay for tuition, books, housing, and other costs. In response, labour lawyer Douglas Lipsky suggests that students who are frustrated with their earnings should position themselves as willing to take on more responsibility and argue for higher pay.
It is worth noting that students employed through financial aid work-study programs, such as Free Application for Federal Student Aid (FAFSA), must earn at least the federal minimum wage and have additional stipulations regarding their hours. Additionally, some universities have chosen to raise their minimum wage above what is required by their states and the federal government, citing concerns about equitable pay for all employees.
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Students pushing for higher wages
Students at universities across the US are pushing for higher wages, with some reporting that they are being paid below the minimum wage. While there is a legal exemption that allows universities to pay students less than the minimum wage, many students are frustrated with their earnings and are calling for change.
At Grand Valley State University (GVSU), students are campaigning for higher wages for student workers. The Young Democratic Socialists of America, along with the Student Senate and other organizations on campus, have been collecting research, making arguments, and gathering student testimonies to support their case. They have found that many students struggle with paying for basic necessities such as food, housing, and books. The group has also collected over a thousand signatures on a petition for higher wages, which is expected to be voted on soon.
Similarly, a student at a university in Illinois shared their experience of being paid below the minimum wage and their plans to bring it up with the school board. They question the legality of the university's actions and whether it is a common practice at other colleges.
In response to student concerns, some universities have taken steps to raise their minimum wage above what is required by state and federal laws. For example, Duquesne University in Pittsburgh increased its minimum wage to $16 an hour, more than double the state and federal requirements. Charles Dougherty, the university president, stated that they have an obligation to do what is right for their employees.
While raising the minimum wage can have a positive impact on student workers, it is important to consider potential consequences. Research has shown that increases in state-level minimum wages are associated with a decrease in enrollment at local community colleges, particularly for part-time students and those who are less likely to earn an education credential. However, it is worth noting that minimum wage increases had no effect on enrollment rates at four-year institutions.
As the conversation around minimum wage continues, it is clear that students are advocating for their rights and fair compensation. Universities are facing pressure to address these concerns and make changes that support their student employees.
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Universities raising minimum wage above state and federal requirements
While some universities pay their student employees below the minimum wage, others pay minimum wage or higher. A provision under the Federal Fair Labor Standards Act (FLSA) allows nonprofit educational organizations to pay student workers less than the minimum wage. This exemption, also known as "subminimum wage," authorizes employers to pay full-time students a lower wage—at least 75% of the federal minimum wage or a percentage of an applicable state minimum wage if it's higher—for on-campus jobs. Students employed through a financial aid work-study program must earn at least the federal minimum wage.
However, a growing number of universities are choosing to raise their minimum wage above what is required by their states and the federal government. For example, in 2015, Duquesne University in Pittsburgh raised its minimum wage to $16 an hour, more than double what was required by state and federal law at the time. This decision was motivated by a sense of responsibility to the university's lowest-paid employees. Similarly, Washington's minimum wage increase to $11 an hour affected over 2,600 students, far more than staff, and the university expects more employees to be impacted as the minimum wage continues to rise.
These increases in minimum wage by universities often result from concerns about equitable pay for all employees, changes in local ordinances, or pressure from advocates for low-wage workers. While the decisions to pay students less than the minimum wage may be legal, some critics argue that they are immoral, especially considering that many students who qualify for work-study are low-income and struggle with paying tuition even with scholarships.
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Students employed through financial aid work-study programs
Work-study programs are need-based federal student aid programs that provide students with part-time employment opportunities. Students are not required to participate in these programs, but they offer several advantages, such as being preferred by employers and having earnings that are not counted as income on the Free Application for Federal Student Aid (FAFSA). The hourly rate and number of hours worked each week are determined by the specific employer, and students are paid directly on a bi-weekly basis.
The Federal Work-Study (FWS) Program allocates federal funds to institutions based on a statutory formula that requires an institutional match. The federal share of a student's wages generally may not exceed 75% for employment at a school or public/nonprofit agency, and it may not exceed 50% for employment at a private for-profit entity. Schools must consider factors such as financial need, the number of hours a student can work, the anticipated wage rate, and other assistance available when assigning FWS jobs.
While the FWS Program is designed for part-time employment, overtime may be required in certain situations. However, overtime payments should not create an overaward in the student's financial aid package. Additionally, eligible schools in areas affected by major disasters may make FWS payments to affected students for the period they were unable to fulfil their FWS obligations.
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Universities competing with other employers to attract staff
Universities and colleges are facing competition from other employers when it comes to attracting staff. This is due in part to the stabilizing unemployment rate and an increasingly competitive labour market, which has left many employees seeking new opportunities with higher compensation and more flexibility.
To remain competitive, universities are exploring new ways to partner with industries and develop their employees' skills. For example, some universities are partnering with companies to create microcredentials in high-demand areas like data and analytics, which can be stacked to earn a degree. Universities are also offering online education and degree programs that provide flexibility for working individuals.
Additionally, universities are investing in employee recruitment and retention initiatives, such as providing continuing education benefits and academic partnerships with companies. This allows employees to "learn while they earn," benefiting both the company and the employee.
Some universities are also addressing the competition by raising their minimum wages to ensure equitable pay for all employees, even if it costs millions. For example, Duquesne University in Pittsburgh raised its minimum wage to $16 an hour, more than double what is required by state and federal law.
However, it is important to note that some universities have been criticized for exploiting a legal loophole that allows them to pay student workers below the minimum wage. This practice is considered unfair, especially to low-income students who rely on these jobs to fund their education.
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Frequently asked questions
No, a provision under the Federal Fair Labor Standards Act (FLSA) allows nonprofit educational organizations to pay student workers less than the minimum wage. This exemption is called "subminimum wage" and universities can obtain a certificate from the Department of Labor to pay students at least 75% of the federal minimum wage or a percentage of an applicable state minimum wage if it’s higher.
No, some universities choose to pay student employees minimum wage or higher.
Yes, the certificate limits the number of hours a student can work to 8 hours a day and no more than 20 hours a week when school is in session and 40 hours when school is out.
Students employed through a financial aid work-study program must earn at least the federal minimum wage.
Students can approach their university's administration and request a pay raise. They can also ask for more responsibilities and argue that they are willing to take on more work.
