Chapter DWD 272

Chapter DWD 272

MINIMUM WAGES

DWD 272.001   Declaration of policy.

DWD 272.01   Definitions.

DWD 272.02   Applicability of orders.

DWD 272.025   Statement of intent.

DWD 272.03   Minimum rates.

DWD 272.04   Deductions for meals and lodging.

DWD 272.05   Agriculture.

DWD 272.06   Domestic service employment, casual employment, and companions in private homes.

DWD 272.07   Recreational or educational camps.

DWD 272.08   Caddies.

DWD 272.085   Student worklike activities and employment.

DWD 272.09   Subminimum wage licenses for rehabilitation facilities and for the employment of workers with disabilities and student learners.

DWD 272.10   Listing deductions from wages.

DWD 272.11   Permanent records to be kept by the employer.

DWD 272.12   Interpretation of hours worked.

DWD 272.13   Forms.

DWD 272.14   Prohibition of displacement.

Ch. DWD 272 Note Note: Chapter Ind 72 as it existed on July 31, 1978 was repealed and a new chapter Ind 72 was created effective August 1, 1978. Chapter Ind 72 was renumbered Chapter ILHR 272, Register, February, 1996, No. 482, effective March 1, 1996. Chapter ILHR 272 was renumbered chapter DWD 272 under s. 13.93 (2m) (b) 1., Stats., and corrections were made under s. 13.93 (2m) (b) 6. and 7., Stats., Register, May, 1997, No. 497.

DWD 272.001 DWD 272.001 Declaration of policy.

DWD 272.001(1) (1) The department, in fulfilling its statutory mandate, has caused extensive studies to be made relative to the consideration of a “living wage” and how the wage should be computed. The concept of “cost of living” and “living wage” is very complex because of the many variables. Any single concept is difficult to apply because of different assumptions, techniques and local conditions.

DWD 272.001(2) (2) The rates adopted in this chapter reflect compensation that has been determined to be adequate to permit any employee to maintain herself or himself in minimum comfort, decency, physical and moral well-being. The department has also considered the effect that an increase in the living-wage might have on the economy of the state, including the effect of a living-wage increase on job creation, retention and expansion, on the availability of entry-level jobs and on regional economic conditions within the state.

DWD 272.001(6) (6) Room allowances shall be computed on the basis of 20% of the prescribed minimum rate for employees based on a 40 hour week, rounded off to the nearest 5 cents.

DWD 272.001(7) (7) Meal allowance shall be computed on the basis of 30% of the prescribed minimum rate for employees based on a 40 hour week, rounded off to the nearest 5 cents.

DWD 272.001 History History: Cr. Register, July, 1978, No. 271, eff. 8-1-78; am (5) (a), Register, March, 1990, No. 411, eff. 4-1-90; r. (2), renum. (3) to be (2), cr. (3), Register, February, 1992, No. 434, eff. 3-1-92; am. (2), Register, February, 1996, No. 482, eff. 3-1-96; corrections made under s. 13.93 (2m) (b) 7., Stats., Register, February, 1996, No. 482; r. (3), (4) and (5), Register, May, 1997, No. 497, eff. 6-1-97.

DWD 272.01 DWD 272.01 Definitions. As used in this chapter:

DWD 272.01(1) (1) “Agriculture” will mean the same as “farm premises” as defined in s. 102.04 (3), Stats., of the worker’s compensation act.

DWD 272.01(2) (2) “Bona fide school training program” means a program sponsored by an accredited school and authorized and approved by the state department of public instruction or the board of vocational, technical and adult education or other recognized educational body and provides for part-time employment training which may be scheduled for a part of the workday or workweek, supplemented by and integrated with a definitely organized plan of instruction and where proper scholastic credit is given by the school.

DWD 272.01(3) (3) A “bona fide vocational training program” is one authorized and approved by the state board of vocational, technical and adult education or other recognized educational body and provides for part-time employment training which may be scheduled for a part of the workday or workweek, for alternating weeks or for other limited periods during the year, supplemented by and integrated with a definitely organized plan of instruction designed to teach technical knowledge and related to industrial information given as a regular part of a student learner’s course by an accredited school, college or university.

DWD 272.01(4) (4) “Department” means the department of workforce development.

DWD 272.01(5) (5) 

DWD 272.01(5)(a) (a) The term “employer” shall mean and include every person, firm or corporation, agent, manager, representative, contractor, subcontractor or principal, or other person having control or direction of any person employed at any labor or responsible directly or indirectly for the wages of another.

DWD 272.01(5)(b) (b) The term “employer” shall also include any person, partnership, or corporation engaged in the processing of cucumbers into pickles, who is responsible directly or indirectly for the wages paid for the services of “workers” engaged in the harvesting of cucumbers providing:

DWD 272.01(5)(b)1. 1. That the processor or the processor’s agent directly or indirectly pays each “worker” performing services in the harvesting of cucumbers or,

DWD 272.01(5)(b)2. 2. That the processor or the processor’s agent has the right (whether exercised or not) to terminate the services of the “worker” or to transfer a worker’s services from one grower to another.

DWD 272.01(8) (8) “Industry” means a trade, business, industry, or branch thereof, or group of industries in which individuals are gainfully employed.

DWD 272.01(9) (9) A “minor” shall mean any person under 18 years of age.

DWD 272.01(9m) (9m) “Minor employee” means a minor who is paid at the applicable minor minimum wage rate.

DWD 272.01(10) (10) “Month” means 30 days.

DWD 272.01(11) (11) “Opportunity employee” means an employee who is not yet 20 years old, during the first 90 consecutive days after the employee is initially employed by the employer.

DWD 272.01(12) (12) “Tipped employee” means any employee engaged in an occupation in which they customarily and regularly receive tips or gratuities from patrons or others.

DWD 272.01 History History: Cr. Register, July, 1978, No. 271, eff. 8-1-78; cr. (15), Register, August, 1987, No. 380, eff. 9-1-87; cr. (16), Register, June, 1989, No. 402, eff. 7-1-89; renum. (3) to (16) to be (4) to (9), (12), (15), (13), (17), (3), (16), (14) and (11) and am. (11), cr. (10), Register March, 1990, No. 411, eff. 4-1-90; r. (6) and (7), Register, February, 1992, No. 434, eff. 3-1-92; renum. (12) to (17) to be ILHR 272.09 (1) (g), (h), (j), (k), ILHR 272.01 (12) and ILHR 272.09 (1) (m), Register, February, 1996, No. 482, eff. 3-1-96; am. (4) and r. (11), Register, May, 1997, No. 497, eff. 6-1-97; emerg. cr. (11), eff. 5-31-97; cr. (11), Register, September, 1997, No. 501, eff. 10-1-97; emerg. cr. (9m) eff. 6-1-05; CR 05-056: cr. (9m) Register August 2005 No. 596, eff. 11-1-05.

DWD 272.02 DWD 272.02 Applicability of orders. The rates prescribed in this chapter shall apply to all employees, including indentured apprentices, employed at private employments including nonprofit organizations, whether paid on a time, piece rate, commission, or other basis.

DWD 272.02 History History: Cr. Register, July, 1978, No. 271, eff. 8-1-78.

DWD 272.025 DWD 272.025 Statement of intent. Nothing contained in s. DWD 272.03 prohibits an employer from paying more than the minimum rates listed in this chapter or from treating an employee as a probationary employee for less than the number of days specified in this chapter.

DWD 272.025 History History: Cr. Register, June, 1989, No. 402, eff. 7-1-89; correction made under s. 13.93 (2m) (b) 7., Stats., Register, February, 1996, No. 482.

DWD 272.03 DWD 272.03 Minimum rates.

DWD 272.03(1) (1) Minimum rates. This subsection is effective on July 24, 2009. Except as provided in ss. DWD 272.05 to 272.09, no employer may employ any employee in any occupation, trade, or industry at a lesser hourly rate than as follows:

DWD 272.03(1)(a) (a) All employees except opportunity and minor employees $7.25 per hour.

DWD 272.03(1)(b) (b) Minor employees $7.25 per hour.

DWD 272.03(1)(c) (c) Opportunity employees $5.90 per hour.

DWD 272.03(1m) (1m) Minimum rates. This subsection is in effect from June 1, 2006, to July 23, 2009. Except as provided in ss. DWD 272.05 to 272.09, no employer may employ any employee in any occupation, trade, or industry at a lesser hourly rate than as follows:

DWD 272.03(1m)(a) (a) All employees except opportunity and minor employees $6.50 per hour.

DWD 272.03(1m)(b) (b) Opportunity and minor employees $5.90 per hour.

DWD 272.03(2) (2) Tips. Where tips or gratuities are received by the employee from patrons or others, the employer may pay the minimum wage rate established by this subsection, providing the employer can establish by its payroll records that for each week where credit is taken, when adding the tips received to the wages paid, no less than the minimum rate prescribed in sub. (1), was received by the employee. The minimum rate shall be the rate established in par. (a).

DWD 272.03(2)(a) (a) Minimum rates for tipped employees. All employees except opportunity employees $2.33 per hr.

DWD 272.03(2)(am) (am) Opportunity employees. Opportunity employees $2.13 per hour.

DWD 272.03(2)(b) (b) Burden of proof.

DWD 272.03(2)(b)1. 1. When the employer elects to take tip credit the employer must have a tip declaration signed by the tipped employee each pay period and show on the payroll records that any required social security or taxes have been withheld each pay period to show that when adding the tips received to the wages paid by the employer, no less than the minimum rate was received by the employee. When the employer’s time and payroll records do not contain these requirements, no tip credit shall be allowed.

DWD 272.03(2)(b)2. 2. The department may refuse to take action to collect minimum wage deficiencies for a tipped employee who has refused or failed to file an accurate signed tip declaration for the employer each pay period.

DWD 272.03(2)(c) (c) General characteristics of “tips”.

DWD 272.03(2)(c)1. 1. Tip means a sum presented by a customer as a gift or gratuity in recognition of some service performed for them. It is to be distinguished from payment of a charge, if any, made for the service. Whether a tip is to be given, and its amount, are matters determined solely by the customer, and generally they have the right to determine who shall be the recipient of their gratuity. In the absence of an agreement to the contrary between the recipient and a third party, a tip becomes the property of the person in recognition of whose service it is presented by the customer. Only tips actually received by an employee as money belonging to them which they may use as they choose free of any control by the employer, may be counted in determining whether they are a “tipped employee.”

DWD 272.03(2)(c)2. 2. In addition to cash sums presented by customers which an employee keeps as their own, tips received by an employee include, amounts paid by bank check or other negotiable instrument payable at par and amounts transferred by the employer to the employee pursuant to directions from credit customers who designate amounts to be added to their bills as tips. Special gifts in forms other than money or its equivalent as above described, such as theater tickets, passes, or merchandise, are not counted as tips received by the employee.

DWD 272.03(2)(d) (d) Tip pooling. Where employees practice tip splitting, as where waiters or waitresses give a portion of their tips to the bus persons, both the amounts retained by the waiters or waitresses and those given the bus persons are considered tips of the individuals who retain them.

DWD 272.03(2)(e) (e) Service charge.

DWD 272.03(2)(e)1. 1. A compulsory charge for service, such as 15% of the amount of the bill, imposed on a customer by an employer’s establishment, is not a tip unless distributed by the employer to their employees.

DWD 272.03(2)(e)2. 2. Similarly, where negotiations between a hotel or restaurant and a customer for banquet facilities include amounts for distribution to employees of the hotel or restaurant, the amounts must be so distributed to the employees at the end of the pay period in which it is earned.

DWD 272.03(2)(e)3. 3. If the employer in their payroll records can establish a breakdown of the service charge, such as how much is for tips, room charge, decorations, and other chargeable services, only the amount for tips must be paid to the employee at the end of the pay period in which it is earned.

DWD 272.03(2)(e)4. 4. Similarly, where an accounting is made to an employer for their information only or in furtherance of a pooling arrangement whereby the employer redistributes the tips to the employees upon some basis to which they have mutually agreed among themselves, the amounts received and retained by each individual as their own are counted as their tips.

DWD 272.03(2)(f) (f) Receiving the minimum amount “customarily and regularly”. The employee must receive tips “customarily and regularly” in the occupation in which they are engaged in order to qualify as a tipped employee. If it is known that they always receive more than the stipulated amount each month, as may be the case with many employees in occupations such as those of waiters, waitresses, bellhops, taxicab drivers, barbers, or beauty operators, the employee will qualify and the tip credit provisions of s. DWD 272.03 may be applied. On the other hand, an employee who only occasionally or sporadically receives tips such as at Christmas or New Years when customers may be more generous than usual, will not be deemed a tipped employee. The phrase “customarily and regularly” signifies a frequency which must be greater than occasional, but which may be less than constant. If an employee is in an occupation in which they normally and recurrently receive tips, they will be considered a tipped employee even though occasionally, because of sickness, vacation, seasonal fluctuations or the like, they fail to receive tips in a particular month.

DWD 272.03(2)(g) (g) The tip wage credit.

DWD 272.03(2)(g)1. 1. In determining compliance with the wage payment requirements the amount paid to a tipped employee as allowable under par. (a) by an employer is deemed to be increased on account of tips to equal the minimum wage applicable under sub. (1) to such employee in the pay period for which the wage payment is made. This credit is in addition to any credit for board, lodging, or other facilities which may be allowable under s. DWD 272.03. The credit allowed on account of tips may be less than the difference between the applicable minimum wage and the rate for a tipped employee; it cannot be more.

DWD 272.03(2)(g)2. 2. It is presumed that in the application of this special provision the employee will be receiving at least the maximum tip credit in actual tips:“If the employee is receiving less than the amount credited, the employer is required to pay the balance so that the employee receives at least the minimum wage with the defined combination of wages and tips.”

DWD 272.03(2)(g)3. 3. Under employment agreements requiring tips to be turned over or credited to the employer to be treated by them as part of their gross receipts, it is clear that the employer must pay the employee the full minimum hourly wage, since for all practical purposes the employee is not receiving tip income.

DWD 272.03(2)(h) (h) Overtime payments. When overtime is worked by a tipped employee who is subject to the overtime pay of ch. DWD 274, their regular rate of pay is determined by dividing their total remuneration for employment in any workweek by the total number of hours actually worked by them in that workweek for which such compensation was paid. A tipped employee’s regular rate of pay includes the amount of tip credit taken by the employer, and the cash wages including commissions and certain bonuses paid by the employer. Any tips received by the employee in excess of the tip credit need not be included in the regular rate. Such tips are not payments made by the employer to the employee as remuneration for employment within the meaning of ch. DWD 274.

DWD 272.03(3) (3) Allowance for board and lodging. This subsection is effective on July 24, 2009. Where board or lodging or both are furnished by the employer in accordance with s. DWD 272.04, and accepted and received by a particular employee, an allowance may be made not to exceed the following amounts:

DWD 272.03(3)(a) (a) Lodging.

DWD 272.03(3)(a)1. 1. All employees except opportunity and minor employees $58.00 per week or $8.30 per day.

DWD 272.03(3)(a)2. 2. Minor employees $58.00 per week or $8.30 per day.

DWD 272.03(3)(a)3. 3. Opportunity employees $47.20 per week or $6.75 per day.

DWD 272.03(3)(b) (b) Meals.

DWD 272.03(3)(b)1. 1. All employees except opportunity and minor employees $87.00 per week or $4.15 per meal.

DWD 272.03(3)(b)2. 2. Minor employees $87.00 per week or $4.15 per meal.

DWD 272.03(3)(b)3. 3. Opportunity employees $70.80 per week or $3.35 per meal.

DWD 272.03(3m) (3m) Allowance for board and lodging. This subsection is in effect from June 1, 2006, to July 23, 2009. Where board or lodging or both are furnished by the employer in accordance with s. DWD 272.04, and accepted and received by a particular employee, an allowance may be made not to exceed the following amounts: