Is it lawful for an employer to pay by contract instead of hourly wage?

I have a friend (adult in mid's) who works so many hours and also earns about 16 thousand a month. He apparently gets paid by contract. If he were to get paid per hourly wage, he were to earn a whole lot more with the minimum wage. The minimum hourly wage is 8 dollars. Maybe he would earn about 19 thousand. He works about 60 hours a week and it sometimes varies BUT, it's always very close to 60 and usually 60. Yes, it's true the employer makes these decisions to pay by contract obviously because he doesn't want to give 3 thousand more, according to my calculations. The name of the restaurant is called Volcano Tea House (chinese food). My friend is the main cook. Without him, the restaurant is nothing. Nobody can cook, neither can the boss. I know this because one day my friend was sick and didn't go, he called and everything but his employer said because of him he had closed and wouldn't let him show up. Everything got settled later. So is it lawful to pay by contract and not per hour?
Additional Details
I want to include that he gets paid by a personal check from the employer. Also he didn't sign any contracts at all saying he is ok with this or anything. I just used the term "contract" to state that there is a certain amount paid all the time and it is always the same. Meaning the employer has set this as the only pay and the earnings will never vary weather he works more or less.

Ray

it is not unlawful if that is what he agreed to ! Contract employees are hired usually for a set/specific fee to accomplish a specific goal with or without time restrictions.

tojwl_025

if u sign a contract stating a certain payment then its legal. but this really is a question for a lawyer

Interestingly Enough

Yeah, perfectly legal. He is, in fact, the employee. If he doesn't like his situation he should seek new employment.

I don't see, however, where you are getting the $19,000 monthly figure.

At $8 an hour (also a figure you gave) he'd only be making a little over $2,000 monthly in a 60 hour week.

Care to enlighten me?

cinder a

Absolutely, you can always contract work in your business.

Freedle S

I think you're confused. If your friend is making $16,000.00 a month, there is no way he could make more at minimum wage. I think you meant $1,600.00

As to whether or not it is legal, it probably isn't. Check the link below to see the guidelines produced by the irs to differentiate in between employees and contractors.

fs

bryan

fortew4

ya sure. as long as the contract is good and legit then it is lawful

babyluv8189

yes dear its called salary

Sammy B

Well the fact its a contract ( meaning he has to sign it saying he agrees with terms) lets you know its lawful.

NacMac

I think you might be missing something in this situation. He could not be making $16,000 a month.

Can he be pulling your leg?

If you meant $16,000 a year, and he's working 60 hours a week, then he really should be looking for a better job. A contracted salary can be very good for many careers. Usually it's a higher paying position, temporary, and the contracted employee can set their own hours, as long as tehy get the work done.

60 hours a week at any pay, is a lot. If it's really only $16-18,000 a year for those hours, of hard work, then he should look somewhere else for a job. And good luck to him.

By the way, he shouldn't quit, before finding another job. Always have a job before quitting one, except maybe if he's in a really bad situation.

Aubreigh S

Try reading my source. I'm not sure if it will help you. It should!

ibu guru

Certain jobs are paid by the hour, mangerial and executive jobs are paid on salary. And there are other situations where a person can be paid on contract -- independent contractors, of course, but also many execs are on a written contract, too. An executive chef or head chef could well be on a contract. Those on contract can be paid hourly, salary, or fixed fee per project. $16K/mo. is a top-notch salary for a chef -- way, way above average!

You need to learn some basic math. Someone paid minimum wage is not going to earn $16,000 a month. Even at $10/hr for 60 hours, it's only $700/week gross. You are way off base here.

your worst nightmare

i think you missed out in math class 60 hours a week at 8 an hour equals about 560 a week times 4 weeks equals about 2200 a month....not 16000.....

RenaNMSU

No it is not unlawful. Most professionals get paid a salary and don't get paid overtime. Its how most companies work.

protoham

Yes it is lawful. Where did you learn math?

16,000 per month = 192,000 per year

40 x 8 straight pay + 20 x 12 overtime = 560 per week or 2240 per month = 26,880 per year

Which is bigger 192,000 or 26,880?

Jimmy

Yea... as long as it's not under the table pay. Most chinese restaurants will do under the table pay and you just get cash. This is illegal, but most of the time it won't be reported because they aren't losing money to taxes.

Do you mean 16,000 per YEAR?

He wouldn't pass the "independent contractor" tests, i.e., he is an employee. Thus it's still illegal to go below min wage.

.

trobop

Terry L

Yes this is legal, your friend in essence is his own boss and has to get a IRA tax number. Some employers do this for what else reason than to make a little more money themselves.

Princess'Mom

uh,no

mel

I don't see where you are getting the $19,000 monthly figure.

At $8 an hour (a figure you gave) he'd be making a little over $2,000 monthly in a 60 hour week.

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