Overview: Young people first entering the workforce often find they can't get a job until they have experience, but they can't get experience until they have a job.
To combat this age-old dilemma, Congress in 1996 established the Youth Opportunity Wage, which allows employers to pay employees under the age of 20 years a wage of $4.25 (under minimum wage laws, the minimum wage must usually be $7.25) an hour during the first 90 consecutive calendar days of their employment.
Employers are forbidden from using the Youth Opportunity Wage to reduce the hours, wages or employment benefits of other employees.
Some states have similar provisions, often known as training wages, but many do not. Employers may not take advantage of the $4.25 wage unless it is allowed under both state and federal law.
Trends: As long as unemployment remains high, especially among those under the age of 20, employers will likely find a large pool of employees willing to work under a training wage.
Author: Michael Cardman, Legal Editor
HR guidance on complying with the Youth Opportunity Wage.