Does the law give big companies special opportunities that small firms don't have?

[Boojatta]

Let's suppose that you work 25 hours per week for 1.4 times minimum wage for a big employer that has a number of locations. Your employer offers to let you maintain those weekly hours of work, so that you would continue to perform that same work in that same location, but in addition you would also work somewhere else for 15 hours per week, and the offer is that your overall per hour wage will drop but will remain above minimum wage. For example, your per hour wage may drop as though you had accepted the extra 15 hours at 0.8 times minimum wage.

You have the option of continuing to work only 25 hours per week for 1.4 times minimum wage, so it's entirely your decision. Your total income will certainly increase if you accept the increased hours. If you want the extra income, then it probably makes more sense to work an extra 15 hours per week at 0.8 times minimum wage than to spend your time cutting coupons from magazines to use when shopping or otherwise trying to save relatively small amounts of money.

The problem is: what if the 25 hour per week employer is small, has only one location and few employees, and cannot make the offer? What if another small firm wants to make the offer? Unless there is some special circumstance permitting an exemption from the usual law, the usual law applies and the other employer is forbidden from offering you 15 hours of work per week at 0.8 times minimum wage.

There could be a contractual way to avoid that problem, but we then have a question as to whether or not the contract would be considered as legally amounting to fraud to circumvent minimum wage laws.

Here's my contractual idea:

The 25 hours per week at 1.4 times minimum wage earn every week the equivalent of 35 hours of work at minimum wage. Offer the employer for whom you work 25 hours per week the equivalent of two hours of work at minimum wage as an incentive to participate in the contract. In addition, the equivalent of three hours of work at minimum wage are to be transferred from your 25 hours per week employer to your 15 hour per week employer. Thus, you have contractually agreed to a wage reduction that will give you at your 25 hour per week job the equivalent of 35 - (2+3) = 30 hours of work at minimum wage. Given that you are working only 25 hours per week to get the equivalent of 30 hours of work at minimum wage, you are still getting more than minimum wage, so that wage reduction is legally permitted. Now, the number 15 is equal to five times three, so your 15 hour per week employer is contributing the equivalent of 0.8 times 5 times 3 hours of work at minimum wage. Now, 0.8 is equal to 4/5 so we can cancel the 5s and get the equivalent of 4 times 3 hours of work at minimum wage. In other words, your 15 hour per week employer contributes in money terms every week the equivalent of twelve hours of work at minimum wage, but by adding on the equivalent of three hours per week at minimum wage transferred from your 25 hour per week employer, your 15 hour per week employer is able to pay you the equivalent of 12 plus 3 (i.e. 15) hours of work at minimum wage for your fifteen hours of work.

Would the contract be legal? Should it be legal? Should the law allow small firms to enter into contracts with each to do some of the things that the law allows a big firm to do? This question could be interesting to ponder, because it could be argued that a big firm in many (or all) cases doesn't have any actual unity as a real physical object. For example, ownership may be divided among a number of investors, and all premises where the firm operates may be rented or leased from other firms. Certainly, all employees are associated with a big firm only as a byproduct of contracts. Thus, a big firm is itself in a sense an abstraction that comes into existence as a result of contracts. So why shouldn't small firms be allowed to use contracts to legally do things that big firms can legally do?

[Boojatta]

1. Kick because...

... the Original Post included questions and, although there may be nobody reading this who has answers, some of you might have ideas that could contribute to the discovery of answers.

[Pharlo]

2. How is the second scenario you set up

not just an employee getting a second job with a second company? Why would that have any bearing on the employee's first employer?

Say I have a job at 1.4 times minimum wage. I find a second job at .8 minimum wage during the hours I'm not employed by my first/primary employer. What business is it of my first employer if I have a second job? And, why would I bring them into negotiations with the second employer?

Now, if I worked at a large company, and the situation you described above (hours worked per site) were applicable, that would be an advantage - a perk I most probably considered before taking the job. However, working for a smaller company, you know that is not a possibility, so if hours are cut, one option is a second job.

As for the entire 'benefits' issue, I really can't see smaller companies getting into that legal morass for the simple reason that they would lose money on legal fees setting up a 'contractual' system such as you suggest. The second small company would, most likely, bring in temp or temp-to-hire employees rather than bothering with the complications involved in the contracts you suggest here.

That's my take on it. Perhaps you're suggesting something I'm not comprehending - that is a possibility - but from the way I understood your suggestion, it's just not worth it to the smaller companies.