A compensation agreement should include information about the parties involved (employer and employee) and details about how the employee is paid for their work, such as hourly wage, annual salary, commission, etc. The agreement must also include the frequency with which the employee receives his or her salary, by . B monthly or every two weeks. If a payroll deduction benefits the employee and the employer does not derive any profit or benefit from the deduction, a deduction is permitted that lowers the employee`s effective rate of pay below the minimum wage. There are other specific scenarios where deductions are allowed even if they lower the effective rate of pay below the minimum wage, including the deduction of federal, state, and local taxes that the employee must pay, certain scenarios related to meals and housing, and certain deductions related to loans that the employer grants to the employee. Most of these exceptions are fact-based and based on circumstances. Under the RSA, the general rule is that payroll deductions for items or payments that are primarily considered for the benefit or convenience of the employer must not lower an employee`s wage rate below the minimum wage. Take the example mentioned above, where an employer provides a uniform to the employee and has the employee sign a payroll deduction agreement to reimburse the employer for the cost of the uniform. For the purposes of this example, suppose the following: the uniform costs $50, the employee`s rate of pay is $7.25 per hour (the current minimum wage), and the employee works 40 hours per work week, so the employee`s salary is $290 per work week ($7.25 x $40). A compensation agreement is usually introduced at a specific point in the period of employment (e.g. B after a probationary period or annual review process) to describe salary changes such as an increase or bonus, or even changes in non-monetary compensation, such as . B, additional leave or personal days. The agreement simply records the employee`s updated salary amount and other details related to their new pay terms.

Non-poaching or non-solicitation agreements may be legal if they relate to legitimate business cooperations or transactions and are “reasonably necessary” for such collaborations or transactions to progress. Acceptable agreements may include: All companies considering an agreement with provisions of this type should carefully consider whether the agreement could violate antitrust laws. A wage-setting agreement is an agreement with another employer to limit wages, salaries or other benefits to employees; Such agreements are illegal under antitrust laws. A “no poaching” or “non-solicitation” agreement is an agreement with another employer not to hire or recruit its employees. Non-poaching or non-solicitation agreements may be acceptable if they are entered into under legitimate business collaborations, but a “naked” no-poaching or non-solicitation agreement that has nothing to do with legitimate business cooperation or arrangement is illegal under antitrust laws.1 The DOJ and FTC have jointly published a non-exhaustive list of “red flags” of the agreement, this should encourage caution. including: ensuring that compliance training covers wage setting and no-bonus agreements; 3. Attorneys General have also stepped up enforcement action against companies that may be involved in illegal wage-setting and non-solicitation agreements. In July 2018, attorneys general from 11 states formed a coalition to investigate non-poaching agreements in franchise agreements that limit a company`s ability to recruit or hire employees of the franchisor or another franchisee of the same chain. As part of the investigation, the coalition requested information about the non-poaching policies and practices of several fast food franchises, including Arby`s, Burger King, Dunkin` Donuts, Five Guys, Little Caesars, Panera Bread, Popeyes and Wendy`s. Attorneys General have since announced investigations into Anytime Fitness, Applebee`s, Auntie Anne`s, Baskin-Robbins, Buffalo Wild Wings, Carl`s Jr., Church`s Chicken, Cinnabon, Circle K, Denny`s, Domino`s, Firehouse Subs, IHOP, Jamba Juice, Jimmy John`s, McDonald`s, Papa John`s, Pizza Hut, Planet Fitness, Sonic, Valvoline and Wing Stop. Therefore, employers should exercise caution when using payroll deduction agreements to ensure that an employee`s effective rate of pay is not lowered below the minimum wage requirement or the one-and-a-half-year overtime wage requirement. Compliance with the minimum wage requirement is determined by dividing the total wage paid to the employee by the total number of hours worked during the week.

In our example, if the employer deducted $50 from the employee`s wages for a work week, the result would be that the employee would be paid $240 for 40 hours of work, which would make his or her effective rate of pay $6.00 per hour. Therefore, such a wage deduction would be a violation of the minimum wage requirement of the RSA. In fact, in this scenario, the employer cannot deduct an amount from the employee`s salary, as this would reduce the employee`s wage rate below the minimum wage. Certain agreements acceptable for legitimate cooperation or transactions, the review of existing and proposed contracts for wage setting or non-poaching provisions, and the review of the removal or modification of these provisions, even if they have not been implemented; and upon acceptance of the work order and pricing conditions, if any, the Contractor shall not be entitled to any additional payment of any kind to comply with the terms set forth herein. Consult an antitrust lawyer if you believe your firm has entered into inappropriate wage-setting or non-solicitation agreements. 2. The owner of Your Therapy Source and the former owner of a competing staffing service provider were also charged. The Your Therapy Source case is not the only lawsuit without poaching in the health sector. .