4.1 - Wages and Salaries
In North America a large majority of working people receive wages or salaries. In 1998, there were 155.6 million wage-earning and salaried workers in North America, which represents about 85 percent of all employed persons in this region. Of these workers, 11.8 million were in Canada, 22.8 million in Mexico, and 121 million in the United States.
This section describes some of the legal rights that protect salaried workers' incomes. Among these legal rights are minimum wages, overtime pay, paid holidays, and paid vacations.
4.1 Will my salary ever be less than the minimum wage?
Canada
No; almost all employees who perform work or supply services must be paid no less than the minimum wage. In Canada the minimum wage is set at the provincial or territorial level, so the minimum wage depends on the province or territory where you work. In 1999, the minimum wage ranged between $5.25 and $7.20 per hour depending on the jurisdiction (see Appendix A).
Mexico
No; according to the Ley Federal del Trabajo (Federal Labor Law) you should be paid no less than the minimum wage for services performed during your daily hours of work. There are three distinct minimum wages applicable to different geographical areas. Since January 1, 1999, the minimum wage is 34.45 per day in area "A," 31.90 per day in area "B," and 29.70 per day in area "C." The minimum wage is fixed annually on a daily basis; a normal working day is eight hours (see Appendix B).
You should remember that the Labor Law mandates that for each six days of work, workers will have a day of rest with full pay.
There are also minimum wages for 88 occupations, trades or special work that are higher than the basic minimum. These wage rates apply to all workers in the occupation, trade or special work and also are set at different levels for the three geographical areas mentioned.
Minimum wage shall not be subject to set-off, deduction or reduction, except for alimony or maintenance payments, payments to employers for rental housing, and bonus payments to cover loans guaranteed by the Instituto del Fondo Nacional para la Vivienda de los Trabajdores (INFONAVIT, National Housing Fund).
United States
No; according to the Federal Fair Labor Standards Act of 1938 (FLSA) all non-exempt employees whose employer has annual sales of $500,000 or more or engages in interstate commerce must be paid no less than the minimum wage. In September 1997, the federal minimum wage increased from $4.75 per hour to $5.15 per hour (see Appendix B). Some states have established a minimum wage that is higher than the federal one, and you are entitled to the higher rate if you work in one of those states (see Appendix A). In these states, if you are an employee working for an employer not covered by the FLSA, such as a farm owner, you are entitled to be paid the state minimum wage rate.7
There are no administrative requirements for the payment of the minimum wage, so employers may base employees' pay on the time at work, piece rates, or according to some other measurement. In all cases, however, your pay must equal or exceed the minimum wage.
You should also remember that, if you are covered by the FLSA, your employer cannot make deductions from your pay that would leave you with less than the federal minimum wage. The only exceptions are deductions for the reasonable cost of meals, lodging, and other facilities; federal, state and local taxes; court-ordered payments, and payments to an employee's assignees.
4.2 If I work overtime how much will I be paid?
Canada
Workers who work more than the standard hours must be paid at the overtime rates (one-and-one-half times the regular rate for each hour worked in excess of the standard hours; in New Brunswick, Nova Scotia and Newfoundland, one-and-one-half times the minimum wage). The number of hours beyond which overtime must be paid vary (see Appendix A).
Mexico
If you work more than the maximum daily hours of work (eight hours for day work, seven for night work, and seven-and-a-half hours if you work mixed hours), you are entitled to be paid at double your regular rate for the extra time.
You should remember that you are not obliged to work overtime more than three hours per day, nor more than three times a week. If your overtime work exceeds nine hours in a week, you should be paid at three times the normal rate for each extra hour worked, and your employer must pay the corresponding sanctions mandated by the Ley Federal del Trabajo (Federal Labor Law).
United States
The Fair Labor Standards Act (FLSA) requires that any covered worker who works more than 40 hours in one week must be paid at least one-and-one-half times the regular rate for all overtime hours worked.
If you are paid an hourly wage, your regular rate is the same as the hourly wage, which can not be less than the FLSA minimum wage. If you are paid a salary, commission, piece rate, or other-than-hourly wage, your regular rate usually is equal to your total compensation for the workweek divided by the number of hours you worked during the week.
When calculating overtime pay, your employer must consider each workweek on its own and may not average hours over more than one workweek. Some premium payments and other supplementary pay must be included in your regular rate, such as production-related bonuses, commission payments, and the cost of employer-furnished housing. The regular rate does not include certain types of premium payments, such as payment for working on special days, paid vacation, holiday pay, and sick leave.
The FLSA does not require your employer to pay you overtime or premium pay for working more than eight hours in a single day or for working on Saturday, Sunday or a holiday.
4.3 Will I be paid for the time I am on vacation and on public holidays?8
Canada
Yes; you are entitled to be paid during your vacation. Generally, employees receive 4 percent of average wages for the 12 months for which the vacation is given. In many jurisdictions, after a number of years with the same employer, employees receive 6 percent of their average wages for the 12 months for which the vacation is given (see Appendix A).
You should also be paid for public holidays at your regular rate, as if you had worked that day. If you work on a public holiday, you should receive additional pay, but the compensation varies from one jurisdiction to another. Typically, that compensation consists of regular pay plus a premium of one-and-one-half times the regular rate for each hour worked or, in many cases, another day off with pay.
Mexico
Yes; the Ley Federal del Trabajo (Federal Labor Law) entitles all workers who have been in an employer's service for more than one year to receive paid annual vacation leave of at least six continuous working days.9
Vacations should be authorized within six months after you complete the year of service. For your next three years of service, your paid vacation should increase by two days each year, reaching at least 12 working days after four years' service. After that, the required vacation period increases by two days for every five years of service. If you are a temporary worker, you are also entitled to an annual vacation in proportion to the number of days you worked in the previous year. In addition to vacation pay, you are entitled to receive a bonus, prima vacacional, of no less than 25 percent of your regular earnings during the vacation period.
You should also be paid for public holidays, even if you do not work. If you do work on a holiday, your employer shall pay you, in addition, twice your ordinary wage for the day. Remember that if you work on Sundays the Federal Labor Law entitles you to receive a Sunday bonus, prima dominical. This bonus is equal to 25 percent of your regular earnings.
Workers who are dismissed for any reason have a legal right to receive payment for vacations not taken.
United States
The Fair Labor Standards Act (FLSA) covers payments only for time on the job. However, most employers give full-time workers some paid time off each year, and most provide prorated paid vacation time for permanent part-time employees. The amount of vacation leave usually increases with the employee's length of service to the company. Some companies allow vacation time to accumulate while the employee is on a leave of absence. Upon termination of employment, workers generally receive payment for any unused vacation leave they have accumulated.
4.4 What mandatory income benefits can I receive in addition to my wage or salary?
Canada
None; if you receive additional income, it is because it is part of your employer's benefits policy.
Mexico
The Ley Federal del Trabajo (Federal Labor Law) entitles you to receive a bonus for vacation leave, which cannot be less than 25 percent of your regular rate of pay during your vacation leave. It also entitles you to receive an annual bonus, aguinaldo, before December 20 each year, which may not be less than 15 days' wages. If you have worked less than one year, you are entitled to receive a proportional part of this aguinaldo.
In addition, if you are a permanent worker or a temporary worker who has worked more than 60 days in the previous year for the same employer, you have the right to participate in the profits of the enterprise where you work. In 1996, the workers' share was 10 percent of taxable profit.10 This payment should be made within 16 days following the day on which the annual tax must be paid.
United States
None; additional incomes that you might receive are part of your employer's benefits policy.
4.5 Can deductions be taken from my wages?
Canada
Only if the deduction is specifically authorized by the law. For example, in the province of Quebec, employers cannot make deductions from wages unless required to do so pursuant to an act, a regulation, a court order, a collective agreement, an order or decree, or a mandatory supplemental pension plan, or unless authorized to do so in writing by the employee.
In the province of Ontario, employers may not claim a set-off against wages or retain wages except where a statute so provides, an order or judgment of a court so requires, or the employee authorizes it in writing. No written authorization shall entitle your employer to reduce your wage for faulty workmanship or for cash shortages or loss of property if any other person has access to the cash or property. Your employer shall furnish, when you are paid, a written statement indicating, among other things, the amount of each deduction and its purpose.
Mexico
It is unlawful to make any deduction from general workers' wages except:
1. payments on debts contracted with the employer by way of advances of wages or excess payments made to the workers;
2. payments of rents to employers for rental housing; which cannot exceed 10 percent of the salary;
3. payments of bonuses to cover loans from the Fondo Nacional de la Vivienda para los Trabajadores (INFONAVIT);
4. payments of quotas for the creation and development of cooperative societies and saving funds;
5. payments of alimony;
6. payments of trade union dues; and
7. payments of bonuses to cover loans guaranteed by the Fondo Nacional para el Consumo de los Trabajadores (FONACOT).
If you are a minimum salary worker the only deductions permitted are items 2, 3, 5 and 7.
United States
Employers cannot make deductions from your pay that will leave you with less than the federal minimum wage, except for the following types of deductions:
the reasonable cost of meals, lodgings and other facilities provided;
federal, state and local taxes;
court-ordered payments; and
payments to an employee's assignees.
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7 The Fair Labor Standards Act (FLSA) contains several exemptions from the Act's minimum wage or overtime provisions (or both), pursuant to which specified employees (e.g., certain agriculture or seasonal employees and individuals employed as outside salespersons), are exempt from the monetary provisions of this law. The FLSA also provides for payments not less than 85% of the minimum rate to certain students, learners and handicapped workers. In addition to the FLSA, other federal laws mandate payment of prevailing wage rates (which are typically higher and can never be lower than the FLSA minimum rate) to employees of government contractors in the construction and service industries.
8 See Appendix B for a list of public holidays in each country.
9 If you are less than 16 years old, your vacation leave cannot be less than 12 working days. Vacation leave also varies for seafarers, who are entitled to a minimum vacation of 12 working days, and for airline and air transport crews, who are entitled to an annual vacation (non-cumulative) of 30 days.
10 On December 26, 1996, the Cuarta Comisión Nacional para la Participación de los Trabajadores en la Utilidades de las Empresas (Workers' Share Profits Commission) fixed 10% as the workers' share of profits.