Savanna Hoffman
Many colleges and universities in the United States pay their student workers below the minimum wage, which has sparked controversy and frustration among students. This practice is permitted by a legal loophole that allows educational institutions to obtain a certificate from the Department of Labor to pay full-time students a lower wage, often between 75% to 85% of the federal or state minimum wage. While some argue that this provides financial relief for low-income students, others feel that they are being exploited and are pushing for change. The issue is further complicated by factors such as financial aid packages, varying state laws, and the impact of inflation on student wages.
| Characteristics | Values |
|---|---|
| Students' hourly rate | $2.70/hr, $9.50/hr, $10/hr, $11/hr, $13/hr, $14.20/hr, $14.75/hr, $15/hr, $15.50/hr |
| Students' annual income | N/A |
| Colleges' justifications | Financial relief, financial aid, scholarship, internship, studies |
| Colleges' locations | Massachusetts, Connecticut, New Jersey, Virginia, New York, Illinois |
| Colleges' names | Vassar College, Bryn Mawr, Haverford, Swarthmore |
| Legal loopholes | Full-time student exemption, subminimum wage, tip credit |
| Legal authorities | Federal Fair Labor Standards Act (FLSA), Department of Labor (DoL) |
| Legal requirements | 75%-85% of the minimum wage, 20 hrs/wk cap |
| Legal penalties | Wage theft |
| Students' responses | Frustration, criticism, unionization |
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What You'll Learn
Legal loopholes
In the United States, a provision under the Federal Fair Labor Standards Act (FLSA) allows colleges to pay their students below 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.
Colleges can obtain a certificate from the Department of Labor, which allows them to pay students not less than 85% of the minimum wage. The certificate also limits the number of hours a student can work, usually not more than 20 hours a week.
Some students have expressed frustration with this arrangement, calling it "unfair" and arguing that it amounts to "wage theft." They have pushed for changes to ensure that they receive the state minimum wage for their work.
It is important to note that this practice of paying students below the minimum wage is not universal across colleges. Some colleges, such as CUNY and SUNY, pay their student workers the state minimum wage or more. Additionally, the minimum wage laws can vary by state, and some states may have specific laws regarding tipped employees or other exceptions.
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Work-study programs
In the United States, colleges can legally pay their full-time students below the minimum wage for on-campus jobs. This exemption is also known as "subminimum wage" and authorises employers to pay at least 75% of the federal minimum wage or a percentage of an applicable state minimum wage, whichever is higher. This provision is allowed under the Federal Fair Labor Standards Act (FLSA), which lets nonprofit educational organisations apply for a certificate from the Department of Labor to hire student workers at a lower rate.
Students can apply for work-study jobs through their school's program, and the availability and quality of these jobs can vary depending on the school. For example, some schools may have a limited number of work-study positions available, making it challenging for students to find employment. Additionally, there may be a cap on the number of hours that work-study students can work per week, usually no more than 20 hours.
While work-study programs can provide financial relief for low-income families, it's important to note that the wages may be below the minimum wage. This has been a source of frustration for some students, who feel that they are being taken advantage of or that the pay is unfair. However, it's worth mentioning that international students are generally not eligible for work-study programs, as they cannot receive financial aid.
Despite the lower wages, work-study programs can still be beneficial for students due to their convenience and flexibility. The on-campus location makes it easier for students to balance their work and class schedules, and managers are often accustomed to accommodating student timetables. Additionally, work-study jobs can provide valuable experience and skills that can be advantageous for students' future careers.
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On-campus jobs
The minimum wage for on-campus jobs in the US is $7.25 per hour, but this varies depending on the state, with some states having a minimum wage as high as $15 per hour. Students who work for universities in certain states, including Massachusetts, Connecticut, New Jersey, Virginia, and New York, are legally eligible to receive less than the state minimum wage. For example, student workers at Vassar College in New York were earning $10 per hour, which was increased to meet the state minimum wage in 2019.
To find on-campus jobs, students can check bulletin boards and notice boards around the school, contact their school's career services, and network with peers to learn about job opportunities. While on-campus jobs may not always pay above the minimum wage, they can still provide financial relief for college students, especially those who rely on part-time work to cover their expenses.
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Tipped employees
In the United States, tipped employees are those who rely on tips from customers to supplement their wages. These employees must receive a minimum cash wage of $2.13 per hour, which, when combined with their tips, should total at least the federal minimum wage of $7.25 per hour. If the cash wage and tips do not add up to the federal minimum wage, the employer is required to compensate for the difference. This is known as a "tip credit," and it allows employers to pay tipped employees below the federal minimum wage. The maximum tip credit that can be claimed is $5.12 per hour.
Some states have different regulations regarding the minimum wage for tipped employees. For example, in New Jersey, employers can only apply a tip credit if tipped employees are informed in advance of the cash wage they will be paid and the amount of the tip credit claimed. Additionally, all tips must be retained by the employee unless there is a valid tip-pooling arrangement with other tipped employees. In North Carolina, a tip credit is not permitted unless the employer obtains a signed certification of the amount of tips received by each employee.
Some cities within states have separate tipped minimum wages, which are typically higher than the state minimum. For example, the minimum cash wage for tipped workers in the District of Columbia is scheduled to increase annually until it reaches the full minimum wage in 2027.
Colleges and universities in the United States often pay their student workers below the minimum wage, and this practice is legally permitted in many states. This exemption, known as the "subminimum wage," allows employers to pay full-time students at least 75% of the federal minimum wage or a percentage of the applicable state minimum wage, whichever is higher. This exemption applies specifically to on-campus jobs and is often utilized by nonprofit educational institutions.
While some universities abide by this exemption and pay their student workers below the minimum wage, there have been instances where students have voiced their frustration and advocated for change. For example, students at Vassar College in Poughkeepsie successfully lobbied for the administration to raise student wages to meet the New York state minimum wage.
It is worth noting that there are certain positions and programs that are exempt from the subminimum wage exemption. Students employed through a financial aid work-study program, such as the Free Application for Federal Student Aid (FAFSA), must earn at least the federal minimum wage and are subject to additional stipulations regarding their working hours.
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International students
Some states have higher minimum wage rates than the federal rate, and international students may find it challenging to find jobs that pay at least the state minimum wage. Additionally, their visa rules often restrict them to on-campus jobs, where colleges may obtain exemptions to pay below the state minimum wage.
However, there are also colleges that pay their student workers minimum wage or higher, and some states like California and Missouri are known for strict adherence to wage laws. Students concerned about their pay can refer to advice from a labor lawyer, who suggests positioning themselves as willing to take on more responsibility and asking the university for a pay raise.
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Frequently asked questions
Colleges can legally pay students below minimum wage due to a provision under the Federal Fair Labor Standards Act (FLSA). This provision allows nonprofit educational organizations to apply for a certificate from the Department of Labor to hire student workers for less than minimum wage.
The Department of Labor issues certificates that allow colleges to pay students not less than 75-85% of the minimum wage.
Students can try to unionize and then speak to the school board about raising wages.
