OPM announces Federal Employees don't have to be paid State Minimum Wages

[James48]

New Memo out this morning.

Since some localities have enacted higher than Federal Minimum Wage ($7.25), OPM announces that Federal Employees are exempt from any such state minimum wage. Federal employees, even in the largest cities, can now be legally paid as low as $7.25 an hour.

(Thanks Trump).

Here is the memo:

https://www.chcoc.gov/content/inapplicability-state-or-local-minimum-wage-federal-employees

MEMORANDUM FOR: HUMAN RESOURCES DIRECTORS

From:
MARK D. REINHOLD, ASSOCIATE DIRECTOR, EMPLOYEE SERVICES

Subject:
Inapplicability of a State or Local Minimum Wage to Federal Employees


An increasing number of State and local governments are establishing or increasing a jurisdictional minimum wage that is higher than the nationwide Federal minimum wage established under the Fair Labor Standards Act (FLSA). As a result, the U.S. Office of Personnel Management (OPM) has received inquiries regarding the applicability of minimum wages established by State and local governments to Federal employees stationed in affected locations. This memorandum provides agencies with necessary guidance.

Federal employees are covered by the FLSA, which is a Federal law. (See generally 29 U.S.C. 201, et seq.) The FLSA includes a minimum wage provision. (See 29 U.S.C. 206.) Thus, the FLSA minimum wage is generally applicable to Federal employees unless they are exempt from the minimum wage requirements as provided under the FLSA exemption provisions. (See 29 U.S.C. 213(a) and (f).) Under the exemption provisions of section 213(a), the FLSA minimum wage does not apply inter alia to employees who meet the executive, administrative, or professional exemption criteria; criminal investigators paid availability pay under 5 U.S.C. 5545a; certain computer employees; or border patrol agents, as defined in 5 U.S.C. 5550(a). (See 5 CFR part 551, subpart B, for more information on exemptions.) Under the exemption in section 213(f), the FLSA minimum wage does not apply to employees who perform services during a workweek solely in foreign areas outside the United States. (See also 5 CFR 551.212.)

Under OPM’s FLSA minimum wage regulation at 5 CFR 551.301, an employee’s “hourly regular rate” as defined in 5 CFR 551.511(a) is used to determine compliance with the FLSA minimum wage provisions. The current minimum wage under the FLSA is $7.25 (except in American Samoa, where it is $5.21 for government employees). By operation of Federal law, the FLSA minimum wage would supersede any lower amount of pay that would otherwise be provided under the applicable Federal employee pay system. Since the hourly regular rate reflects an employee’s rate of basic pay (including locality pay) and since the lowest General Schedule (GS) rate (GS-1, step 1) is above $7.25, GS employees generally are already paid in excess of the FLSA minimum wage requirements. (To illustrate, at GS-1, step 1, the base rate is currently $9.13 and the lowest locality rate in the United States is currently $10.56 (expressed as hourly rates).)

State and local government minimum wage laws are not binding on the Federal Government and its component agencies since, under the preemption doctrine which originates from the Supremacy Clause of the Constitution, Federal law supersedes conflicting State law. (See U.S. Const. Art. VI. cl. 2.) This is the case when Federal employee pay rates are specifically fixed under Federal law (e.g., GS employees) and when Federal agencies are given discretion in setting rates of pay under Federal law.

In the case of a Federal employee pay system such as the GS pay system in which pay rates are fixed by statute, a statutory change would be needed to allow payment of a State or local minimum wage. There is no administrative authority under which OPM could allow State or local minimum wages to supersede GS statutory rates.

In the case of a Federal employee pay system under which the employing Federal agency has discretion in setting rates of pay, the agency may apply State and local minimum wages to covered employees as a matter of agency policy or through a collective bargaining agreement (where applicable). However, the agency should make it clear that employees are not actually covered by the State or local minimum wage law or any appeal mechanisms established under such a law.

OPM administers the Federal Wage System covering prevailing rate (blue collar) employees in multiple agencies. OPM administratively determines the pay schedules for these employees. OPM has issued regulations (based on a policy choice, not a statutory obligation) requiring payment of applicable State or local minimum wages to Federal Wage System employees. (See 5 CFR 532.205.) Under this regulation, the highest State or local minimum wage in effect in the local wage area is applied in setting wage schedule rates unless there is a higher FLSA minimum wage under Federal law. In other words, if there are multiple State or local minimum wages in effect in different jurisdictions encompassed within the same local wage area, the highest minimum wage will be used in setting wage schedule rates for the entire local wage area, if that minimum wage rate exceeds the FLSA minimum wage rate.

Additional Information

Agency headquarters-level human resources offices may contact OPM at [e-mail]. Employees should contact their agency human resources office for further information on this memorandum.

cc: Chief Human Capital Officers (CHCOs), and Deputy CHCOs

[Boxerfan]

1. Tearing apart foundations....

Who is the actual brains as this is all too well orchestrated. We all know Anus Lips McGeezer isn't capable of-anything involving planning.

[safeinOhio]

2. Start with the

USICS.

[csziggy]

3. This really isn't new

When I worked for the state of Florida in the mid 1970s they exempted themselves from state and federal minimum wage requirements.

As a Clerk II, I made $1.95 an hour before deductions. Clerk Is received $1.75. Federal minimum wage then was $2.10 an hour, farm workers made $1.80 an hour.

I only lasted a year at that job. I simply could not make ends meet, even with low expenses.

I'd been told to expect a pay raise after six months if my review was good - but then the state put in a wage and hiring freeze so no increase at six months or at one year. My parents made me an offer to pay for me to finish my college degree, so it was a simple choice. The state had to hire two people to do the work I had been doing, so it actually cost them more to not pay me more

[SWBTATTReg]

4. One way to end this...no one ever apply to work at these types of jobs, period. If you can't ...

make ends meet, then what is the point of working at such jobs?

[Wellstone ruled]

5. This is just another rung in the Neo-Cons

ladder of Privatizing each and every Governmental Agency. Years ago the Heritage foundation issued policy papers calling for this action to be taken. Just more of the Koch/Walton take over of our Government.

[SKKY]

9. If you have nothing, what choice do you have? The real problem is that employers know...

...that some folks have nothing, so something, even next to nothing, is better.

[SWBTATTReg]

10. Unfortunately, you're right. These people are what they call economic slaves, and they are ...

trapped in an endless, ruthless cycle. Contributing to an endless cycle of low wages, low economic cycles within their localities, e.g., if people have low wages, how are they able to afford things? The policies followed by many republican legislators in many states are keeping these wages low, in order to 'attract businesses'.

These policies aren't working. If one looks at the tight labor market in many areas of the country, you have workers at McDonald's go on strike repeatedly to demand better wages and they actually got them when the city declared a $15 minimum wage resolution (actually went into effect) but then the state (controlled by republicans) objected and ruled that cities couldn't set minimum wage standards (KCMO did this too, a higher minimum wage). Figures.

Farmers, ranchers, etc., even Walmart and/or Amazon workers all still have to moonlight, get other low paying jobs (if available) and still try to make ends meet and they don't. It's a struggle to the end, to bankruptcy, or worse, and still nothing is being accomplished by these people taking these low paying jobs. A lot of them are getting welfare payments too, even when gainfully employed by some of these companies at ridiculous wages.

You see farmers going bankrupt in record numbers mainly because their market is gone or tariffed away by our idiot president, and these farmers, still trying to make ends meet, are stuck w/ low paying jobs in which they have to drive endless number of miles, not worth it to really drive but they do. And they still are declaring bankruptcy.

Perhaps this is why rural areas of the Country are still suffering population losses, as more and more people flee these low paying areas and move to better paying areas of the country (usually urban or suburban areas).
Real wages are still at 1980s levels, so the differences in economic activities between the two areas is amazing and startling. When people are paid better wages (as within suburban/urban areas), the entire economic pie gets bigger by far, and basically everyone reaps the benefits.

Thus, people need to remember that despite all of the republican claims that high wages keeps jobs away from their state (and thus enforced low wages within their states), where did business development actually occur? It certainly didn't in a lot of these rural areas, despite the locked down minimum wages. Economic activities, robust economic activity, drives this engine, and despite what any republican tells you otherwise (all lies or distortions of the truth), better wages helps drive economic activity too.

Supply and demand of the economy still drives the engine of wage increases and if enough people don't do low paying jobs, the jobs either will be redesigned or better pay will be provided. There is some evidence of this happening already, in some areas where produce needs to be harvesting, wages have crept up a little in order to entice more workers to apply. Also, more non wage benefits have increased (such as housing being provided, etc.), in order to attract workers. But a lot of the workers have disappeared from these low paying areas of the country. When the migrant workers were negatively impacted by rump's ridiculous rhetoric, a lot of them disappeared.

Sorry to go on, but I do get tired of seeing these tired old arguments brought up again and again over the last 10-20-30 or more years by republican talking heads of must keep wages low, etc., in order to attract businesses etc. Same old crap, same old results, basically worthless from a worker's perspective, and the only thing that these policies are attracting are predatory businesses, knowing that they have a lock on low wages.

[mopinko]

6. so, davis-bacon is a dead letter, then?

i was under the impression that tho it remained in effect, they had managed to disconnect it from using the local union wage as the benchmark for what the "prevailing wage" was for an area. i guess that might be arguable, esp in sectors that are not strongly unionized.
but how the heck a legal local minimum wage wouldnt be considered the prevailing wage baffles the fuck out of me.

[Recursion]

8. At 3.8% unemployment it's largely hypothetical

If that rate goes up, though...

[Recursion]

7. Unfortunately this has always been true

And it's not just state regulations: Federal departments are largely exempt from OSHA.

[Volaris]

11. Fuck States' Rights, I guess...