Employment allows parents or caretakers to meet the Child Care need requirement. When working, a parent or caretaker's rate of pay must equal or exceed the federal minimum wage for the number of hours he or she works. Review the income verification, and determine if the client receives earnings equal to or exceeding the minimum wage.
Calculating the minimum wage
The method for determining whether the client is earning at least the minimum wage varies based on how the client is paid. You must determine if the client is receiving a set wage, a commission and other performance-based pay, or self-employment income.
Wages, Commissions, or Performance-Based Pay
For clients working for a set wage, a commission, or other performance-based pay, review the client's pay verification to determine the client's pay rate.
- If the pay verification lists the hourly pay rate, compare the pay rate listed on the verification to the current minimum wage ($7.25 per hour).
- If the verification does not show the hourly pay rate, divide the client's gross pay by the number of hours the client worked. Then compare this pay rate to the federal minimum wage.
For self-employed persons, divide the client's net pay by the number of hours the client worked. Note: The net pay amount is the amount of income the client receives after you apply the 50% business expense deduction.
When both spouses work for the same self-employment business, combine net pay and total hours worked by both spouses and then divide the total net pay by the total hours worked.
What happens if the client does not earn minimum wage?
When the client is not earning minimum wage, you must take action based on whether the client receives a set wage, a commission and other performance-based pay, or self-employment income.
When a client works for a set wage and receives less than minimum wage and the employer refuses to start paying at least minimum wage, deny the application, or close the Child Care benefit at the next renewal.
Refer any client whose employer is not paying the minimum wage to the Oklahoma Department of Labor to file a complaint.
Newly-established Self-Employment and Commission or Performance Based Pay Income
You must consider how long a client has been performing self-employment, commission-based employment, or performance-based pay employment. These persons often struggle to develop a consistent income when starting a new business or employment.
- If at application the client has been self-employed or receiving commission or performance-based income for less than one year and makes less than the minimum wage, allow the client up to one year to improve their earnings to the minimum wage.
- If the client fails to raise their earnings above minimum wage by the next renewal and there has not been a substantial change, do not approve further care at the renewal.
- If at application the client has been receiving a commission, performance-based pay, or self-employment income more than one year and makes less than the minimum wage without substantial changes, deny the application.
When a person has been self-employed, receiving commission, or performance-based pay for over one year, does not meet the minimum wage requirement and has had a substantial change in the conditions of employment, email Child Care Subsidy to see if the client qualifies.
Adoptive parents whose income is not countable do not have to meet the minimum wage requirement. They can earn less than the minimum wage without affecting their need requirement.
Leon, aged 28, applies for Child Care for his 7-year-old daughter. He is working for an antiques dealer on commission. He receives a 30 percent commission on items he sells. He started this job 2 years ago and works 40 hours per week. He sold $3,500 in merchandise and worked 172 hours in the last month. He received a commission payment of $1050. Is Leon meeting the minimum wage requirement?
No. Leon's commission income is less than the federal minimum wage. His gross income ($1050) divided by his hours worked (172) equals $6.10 per hour. He has worked for two years. You need confirm if there have been any substantial changes in his income. When there have been substantial changes, email Child Care Subsidy at email@example.com for guidance. When there have not been substantial changes, you must deny his application.
Louie, aged 20, wants Child Care assistance for his two-year-old daughter Eden. Louie works as a waiter. He receives 2.15 per hour plus tips. At the interview, he provides checks that show he earned $223.60 in wages and $575 in tips while working 104 hours in the last month. Is Louie earning the minimum wage?
Yes. You must combine Louie's wage and tip income to see if he is earning at least the minimum wage. $223.60 wages+$575 tips=$798.60 gross income. $798.60 gross income /104 hours=$7.67 per hour. Louie's effective wage is greater than the minimum wage.
Nash, aged 19, and Gracie, aged 20, apply for Child Care for their 2-year-old son Conner. Nash mows lawns and performs odd jobs, and Gracie cleans houses for a living. They began these jobs 3 years ago. Both are paid in cash and do not have an employer. They do not file taxes on their income. Nash provides verification that shows average monthly earnings of $1600 per month for 80 hours of work. Gracie's verification shows $700 in average monthly earnings for 30 hours of work. Gracie reports no business expenses. Nash reports $200 in expenses. Are they making at least the minimum wage?
Yes. They are both earning at least the minimum wage and are performing self-employment. They do not work for the same self-employment business. You have to calculate both Nash and Gracie's net self-employment earnings. Gracie's monthly average income equals her net income amount because she did not declare business expenses. Exclude half of Nash's earnings for his business expenses. $1,600/2=$800. Nash earns $10 per hour. $800/80 hours=$10 per hour. Gracie's earns $23.33 per hour. $700/30 hours=$23.33 per hour.
Nash and Gracie may receive Child Care for the time they are both working. Since Gracie only works 30 hours each month, they may not need child care if they adjust their schedules to work different times.