Sheltered Workshops and Subminimum Wages
In 1938, the Fair Labor Standards Act was passed, including the innovative protection of minimum wage. However, Section 14(c) of the Act included an exemption which allowed some individuals, particularly those with disabilities, to be paid less than minimum wage. Although this provision's initial intention was to encourage the hiring of people with disabilities, often times, workers with disabilities were instead employed in "sheltered workshops." This kept them segregated from their communities and earning sub-minimum wages.
Over 80 years later, Section 14(c) remains an adversity that many people with disabilities face. In 2018, there were about 153,030 United States citizens with disabilities who could be paid less than the minimum wage. 2019 statistics show that there are 17 organizations in Nebraska who pay 490 people a subminimum wage under the 14(c) exception.
“Bottom Dollars” is an hour-long documentary, in 9 separate chapters, that exposes the exploitation of people with disabilities through personal stories and expert interviews. It also presents clear employment alternatives with competitive wages and community inclusion.
THOUGHTS ON SECTION 14(C)?
The Department of Labor's Office of Disability Employment Policy wants to you to share your opinions on Section 14(c) by June 21, 2019! They are looking for ideas, individuals stories, and personal experiences that exhibit how Section 14(c) affects the employment of people with disabilities. The Department of Labor will summarize the information received in comments and provide an overview of Section 14(c) at the state and national levels to ODEP.
We submitted our comments...
14(c) Exception is Unfair: According to April 1, 2019 statistics by the U.S. Department of Labor, Nebraska has 17 organizations who pay 490 people a subminimum wage under the 14(c) exception in their Community Rehabilitation Programs (sheltered workshops), a private business, and the Patient Workers category. The 14(c) exception allows that when a person's disability impacts their productivity he or she is paid a proportional amount to what he or she can produce versus workers without disabilities. Some have questioned the accuracy of those productivity/performance tests and comparing outcomes (see video "Bottom Dollars, Chapter 2" from 3:37- 4:43).
Additionally, even if a worker without a disability does not produce at his/her maximum potential, minimum wage laws still apply and that person still gets minimum wage; productivity tests and prorated pay do not apply to him/her (see video "Bottom Dollars, Chapter 2" from 2:30-3:36). As the 2018 National Council on Disability report "From the New Deal to the Real Deal: Joining the Industries of the Future" points out, often the organizations that employ people with disabilities under the subminimum wage exception have significant financial resources. It does not seem fair that these organizations are paying people with disabilities less than minimum wage. For example see page 66 of the report, discussing the Community Rehabilitation Programs (CRPs) countrywide: "In significant contrast, however, the largest CRPs that profit most significantly from federal, state, and local set-aside contracts and other funding sources do not appear at serious risk from being unable to afford minimum wages, yet they continue to pay subminimum wages. In fact, their revenues are proportioned in almost diametrical opposition to their need to pay these subminimum wages...IRS Form 990 tax documents reveal that the combined total annual revenue of the top 10 CRPs, by number of subminimum wage workers, is nearly $523 million. The top employer on this list, Social Vocational Services, Inc., a sheltered workshop in California, has annual revenue of nearly $105 million from recycling operations, and its CEO has an annual salary of over $1.1 million yet it continues to pay 1,790 workers subminimum wages."
People with disabilities tend to live in poverty and employment can be a key tool to develop a way out of poverty. A job can be a source of independence and personal dignity. However, how are those goals achieved when employers are allowed explicitly by law to pay subminimum wages to people with disabilities because of their disability; or that persons without disabilities are guaranteed a minimum wage by law (despite their levels of production/performance) but workers with disabilities are not? It is strongly suggested reading the 2018 report from the National Council on Disability noted above for a detailed analysis of the scope of the 14(c) certificate programs, the flaws of the 14(c)/sheltered workshop business model, and recommendations for policy reform.
...now it's your turn!
Are you a person with a disability, a family member of a person with a disability, or an employer? Your input is especially important! Here are some things to think about when you submit your comments:
People with disabilities (or family members)...
- Why is having a job in the community at a fair wage important to you?
- If you have had a job in the community that paid a fair wage, what impacts did it have on you? Did you build relationships with co-workers and/or feel connected to your community? Did you learn any news skills or grow as an individual? How did you benefit from being paid a fair wage?
- If you have ever been paid subminimum wage, how did that make you feel? What was your transition to community integrated employment like?
Employers or employment providers...
- What has been your experience with employees that have disabilities?
- What contributions have you seen employees with disabilities make to their workplace?
- How can employers work with employees with disabilities to ensure their success?
- If you have transitioned away from using 14(c) certificates, what was your experience with this process like?
- What is disability employment currently like in your state? Has it changed much over the years?
- If your state has started to move toward competitive integrated employment, why do you think that is? Which policies have had an effect on this progress?
- What do you think would be the effects of changes to Section 14(c)?
- What do you believe employment for people with disabilities will be like in the next 5 to 10 years?
If you're interested in addressing this issue specifically within Nebraska, we'd like to hear your stories also! As advocates for Nebraskans with disabilities, we invite you to join us in our efforts to put an end to subminimum wage and sheltered workshops in our state. Feel free to submit your input in the form below.