With specific exceptions for financial hardship, AJP requires that employers pay a living wage. FJC standards have additional, alternative requirements for employers who document their inability to afford living wages yet.
A living wage is defined as the net wage earned during the legal maximum work week, but not more than 40 or 48 hours (depending on FLSA work classification), that provides for life’s necessities and a dignified life. Living wages are calculated based on the number of dependents that a wage earner must support, though for FJC purposes living wage rates are determined based on the needs of one individual. FJC defines a living wage as affording workers access to (Standard 3.3.1.):
- adequate nutrition;
- clothing and sanitary needs;
- health care;
- housing & utilities; and
- savings (at least 10 percent of income).
The hourly rate of a living wage will vary by locale. A living wage can be inclusive of non-monetary fringe benefits: for example, if an employee’s fringe benefits include food or housing, those are expenses that the employee would not have to pay out of their paychecks. For FJC purposes, a living wage rate will be calculated based on the actual value of any benefits and the actual typical expenses of each of the categories outlined above, relying on local cost of living data.
Living wage calculations must not include hours worked beyond 40 or 48 depending on job classification, which are considered overtime and strictly voluntary under the FJC standards.
To calculate a living wage using online calculators and AJP’s worksheet, see:
For advice on how to afford higher wages, see also: