Is Minimum Wage an Option???

rsclark

An issue was recently brought to my attention. I work for a company with a high turn-over rate. We have many employees go through a training process and 75% make it all the way through, but the other do not. My question is, can we have an employee sign an aggreement upon employment stating if training is not completed they will receive minimum wage for the hours worked? I think if a policy is signed and we enforce it equally to each employee, do Texas laws agree with this?

Theresa Gegen TX

I am a little confused about what you are planning to do.

You can hire the employees at minimum wage, then increase their pay once they sucessfully complete the training program, or give them a bonus once they complete it sucessfully. But if you hire them at more than minimum wages, then later want them to pay some money back, you will run into all types of difficult administrative issues (for example, tax withholdings, etc). Also, most will never be able to pay you back. And I expect few would bring up wage claims if money was withheld from their paychecks.

In Texas, the law is that an employer and employee can agree to the pay, and the employer cannot retroactively lower the pay. (which sounds like what you are considering doing).

Good Luck!

Cinderella

Just out of curiousity, what industry are you in?
Cinderella

WOCO Frank

It's not quite the same situation, but I do have a policy here (signed off on by every new hire in at least 3 different places) that if you quit without giving proper (2 weeks, in most cases) notice, your pay will be reduced to minimum wage for your final pay period. In some cases, we've had people lose $500+ for walking out on us.

In 3 years, I've had maybe a half dozen attorneys call to complain, and one inquiry from a state wage and hour investigator. Nothing beyond that.

Pork

rsclark, it reads like you have hit on a possible. At least one has and does practice the activity to which you refer. I would think that if you have a signed agreement with an employee which clearily identifys the points of concern with pay for work/training received and a sunset for the activity and you restrict the clause for payment in the last week of employment as reverting back to minimum wage for the last work hours/days in the last work week, you just might have the legal ability for it to hold up against challenge.

We use a different approach and a more positive approach by starting at a lower rate and progressing up within the training period to the lower wage level for a particular type of position. For instance start at $5.25 and test the individual's ability to express or recall learned traits on Thursday, Friday is a day of review and critique. Monday starts off a new training week with new objectives and a new level of value as a trainee at $5.50 per hour. Again Thursday is a testing and measurement day; progress and you continue to move up in value, fail and you may stay at the same level or not progress but remain the same. 3rd week fail or not progress in this week and the employee is shown the door with best wishes for the future. Put the testing and measuring at the supervisor level and it is certainly not difficult to administer. Payroll does not change anything until written documentation is provided. Sometimes I have to question the progression level based on time in service and am usually informed the manager knows why a trainee is where he/she may be!

We actually start at $6.00 per hour which is our company's minimum wage level based on local competition. We advance within 60 days, 8 pay periods to $6.50 by the time the training has been completed. Many a trainee has departed our company never having risen beyond $6.00. In another local we start at $6.50 because we are in heavy competition with furniture manufacturing starting at $7.00 per hour. We use the same progression system and the same training program. Good luck Pork