In 1937, the US Congress passed the Fair Labor Standards Act (FLSA). This legislation allows people with disabilities to be paid less than the minimum wage. Prior to the 1960s disabled workers made $1.60 an hour. After that the law changed to pay disabled, "commensurate" wage, a very differnt way to calculate wages.
At a recent meeting I sat next to a man who had worked at a sheltered workshop and received his "legal" “commensurate wage”. A commensurate wage is the rate you work compared to someone with a disability. Therefore, if he worked 20% as fast as a non-disabled employee, he would receive 20% of a non-disabled workers wages.
He worked for two weeks and looked forward to payday. When he finally received it, he stopped talking. When he got home, he went into his room and cried uncontrollably… for a long time. He kept asking himself, “Is this all I am worth? Is this my value on this earth?” For two weeks, he earned less than two dollars. It thoroughly depressed him; it was stunningly hard to get over. Through support and friends, he began to realized he was not worthless, the system was.
Congressional Report on Subminimum Wages for People with Disabilities
I significantly edited, “Concluding Observations,” the summary report from the Congressional Research Service in 2005. The published 38 page report (linked below) by William G. Whittaker is titled, “Treatment of Workers with Disabilities under Section 14(c) of the Fair Labor Standards Act” (FLSA). Congress uses reports like these to educate themselves, set policy, and change laws. It partially reads:
Two issues from the 1980 hearings [arose]… the role of work activities centers (WAC) and calculation of a commensurate wage rate.
Largely, Section 14(c) issues involve wages. How much must employers pay disabled workers in sheltered jobs? Even concern about separation of the workshops from the Work Activity Centers (WACs) has been largely wage-based. The wages in question have always been minimal.
As noted above, the wage rests upon a foundation of individual worker productivity, however measured. Also, disabled workers are often engaged in group work, where personal productivity may well be beyond their own individual ability to control.
Although there is testimony, largely anecdotal, that the workers engaged in sheltered employment through recent years are more severely disabled than those of earlier periods, However documentation is not available. The degree of worker satisfaction with sheltered employment probably can’t be shown with any reasonable accuracy either.
Much of the administrative structure supportive of Section 14(c) is at its base, an issues of wages. Finally, in theory, options for appeal of wage determinations that are poorly documented, rarely used and does not receive DOL priority attention.
Since the mid-1960s at least, the severely disabled may find themselves striving to meet challenges that are beyond their capabilities, the less severely disabled may be subjected to a collectively calculated sub-minimum wage. Though workshop managers find it useful to deal with the disabled as a homogenous group, but, it is more reasonable to distinguish between levels of disability.
The Section 14(c) sub-minimum wage option is rooted in the premise that, in order “to prevent curtailment of opportunities for employment,” a wage rate “lower than” FLSA minimum may be justified. There is little hard evidence whether or not a reduced wage rate prevents curtailment of work opportunities.
Some argue, the option of paying lower wages, encourages employers more readily to hire the disabled and to spend the time to deal with their presumed idiosyncrasies. Whatever their productive level, the sub-minimum wage opens the door to employment: thus — an opportunity wage. Some argue that the sub-minimum wage option inflicts an additional burden: the disabled worker must prove that he is sufficiently productive to merit at least the minimum wage; a worker without a recognized disability is presumed to be worth at least the FLSA minimum.
Some may view the progression from the client, to the worker in the workshop, and to the worker in competitive industry as a continuum. WAC compete for contracts to sustain their nonprofit activities. Thus, while they seek to transition their clients into competitive industry, they may at the same time be reluctant to lose their best workers. In practice, do the managers of workshops and WACs regard themselves as corporate CEOs, as social services workers, or both — and, do these several identities sometimes clash?
Making commensurate wage rate determinations is a technically challenging task. It is not clear, that workshop operators/managers have the expertise effectively to implement such a wage structure. Nor is it clear that the DOL, has the means necessary to effect compliance.
A variety of policy options might be considered by Congress in dealing with this matter. In addition, other options might include:
- developing additional financial subsides for those in sheltered employment;
- attempt to establish a clearer distinction between rehabilitation, with different patterns of activity for workers and for clients or patients engaged under Section 14(c);
- reconsideration of the concept of minimum compensation (and commensurate rates) in the Section 14(c) context; or
- elimination of the Section 14(c) exemption entirely; or
decide that no remedial action is warranted
Ironically, this document ends, just as I left it; without a period. I have no idea if Mr. Whittaker meant to leave the discussion open. But, it feels prophetic.
It was as if he knew the work must go on. Since 2005, nothing has happened with subminimum wages for workers with disabilities. Perhaps now is the time to set an end date.
What Disability Organizations are Saying about Subminimum Wages
- TASH set a date of end of 14(c) certificates by 2013
- National Disability Rights Network, in their 2007 legislative agenda:
Eliminate the payment of Subminimum wages by amending section 14c of the FLSA; plus other recommendations.
- Framing Disability Policy, National Center on Workforce and Disability in their 2001 report suggests: Iliminate the 14(c) certificate and subminimum wage option. It would require congressional action. Emerging Best Practices in customized employment across diverse work settings provide compelling reasons to reevaluate and rationale for cintinuation of the 14 (c) process
- The Justice for All Action Network calls for a plan to implement a carefully structured, time limited phase-out plan so the 434,000 currently employed under 14 (c) are not harmed. They also all for a "planned partial obsolenscense of the program and to discontinue issuing new certificates by 2013 among its recommendations.
Put a period at the end of subminimum wages. There must be a threshold below which no worker, no matter how disabled, no calculation of a commensurate wage rate must fall. Period.