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Should It Be Legal to Pay Disabled Workers Subminimum Wages?

Lawren Barber-Wood. December 9, 2016.

I. Section 14(c) and Who It Affects

In America, the current minimum wage is $7.25 an hour. Most states, though, have higher minimum wages, like Alaska, where the minimum wage is $9.75 an hour. Most American workers are paid whichever wage is higher where they live, but there are some exceptions; minors, waitstaff, and disabled workers can all legally be paid below minimum wage. Minors can only be paid below minimum wage for ninety days, though, and waitstaff can only be paid subminimum wages if they’re tipped. Even then, there are limitations on this; “if an employee’s tips plus cash wages do not add up to at least minimum wage… the employer is required to [pay enough to] make the employee whole” (Simpson). In regards to disabled workers, on the other hand, there is no limit to how low they can be paid or for how long they can be paid these low wages. This is because of a seventy-five year old addition to the Fair Labor Standards Act, or FLSA, called Section 14(c).

*Tumblr automatically changes the “C” in parenthesis to a copyright symbol. It should be Section 14( c ), without the spaces.

This section of the FLSA “authorizes employers, after receiving a certificate from the U.S. Department of Labor... to pay special minimum wages - wages less than the [federal] minimum wage - to workers who have disabilities for the work being preformed” (Fair). People with disabilities that aren’t severe see Section 14(c) as “good intentions gone wrong” (Corley), exploitative, abasing, or as a way to bilk disabled employees out of fair pay. Severely disabled workers, on the other hand, believe that doing away with Section 14(c) is daft, because they likely wouldn’t be able to get a job without it; employers would either have to hire abled people, who can work faster, instead of disabled people, or go out of business. As the father of a severely disabled woman who works for subminimum wages put it, Section 14(c) “encourages employers to hire and retain individuals who would not otherwise qualify for ongoing employment” (Brown). Up to 95% of disabled workers making subminimum wages work in “sheltered workshops.” These have been both extolled and berated, because they can either help or harm disabled workers, depending on how the topic is looked at.

Time-studies, “the method nonprofits use to calculate the salaries of Section 14(c) workers” (Schecter), are another important aspect of Section 14(c). These are the tests that employers are required to perform before they are legally allowed to pay a worker subminimum wages. Time studies are set to take place every six months or whenever there is a change in job position for the disabled person, in order to keep their wages dynamic. A disabled person will receive a task to complete and they will have to complete it as fast as they can. The time it takes them to complete their task is compared to the amount of time it would take the ideal abled person to complete it. If the disabled person took twice as long to complete it as the ideal abled person would, they’d receive half as much pay. For example, if the productivity benchmark for packing ten boxes was ten minutes, and a disabled person did it in thirty, they’d be paid 33% what an abled person would be paid. Disabled people’s wages “may be equal to or less than minimum wage” (Schecter), but are rarely over it. Time-studies are being maligned, because many people find them to be harmful and unfair, but some people think that they are meritorious, because they keep smaller companies able to hire more disabled workers, yet still in business.

Section 14(c) of the Fair Labor Standards Act makes it legal, within reason, to pay disabled workers subminimum wages. This upsets people with less severe disabilities, because it can be seen as exploitative and unfair, and leaves many disabled workers trapped in low-paying jobs and poverty. On the other hand, many severely disabled workers are happy about Section 14(c), because it gives them something to do and they would likely not be employed otherwise. This debate has been described as being “about giving people with disabilities the right to make a living wage” (Anamika) and “about protecting the rights of people with severe disabilities to work at all” (Anamika). There are very few ways to make both sides happy.

II. How Section 14(c) Helps the Disabled Community

Sheltered workshops are commendable in many ways. For example, they offer training, protecting, and socialization to many severely disabled workers who would otherwise have to stay at home. Many disabled workers and their families value this boost of pride and self-confidence over getting a large paycheck. Because of their disabilities, many workers do easier, less demanding jobs, which would earn an abled person very low wages as well. However, an abled person would be expected to do more than just one task at a time, and severely disabled people are not. Besides the fact that sheltered workshops offer less stressful work environments than “normal” jobs, sheltered workshops are often the only workplaces that will hire severely disabled workers because other workplaces generally need workers who will be capable of doing more work efficiently.

One reason Section 14(c) works is that many disabled people, especially those with severe disabilities, don’t do the same type of work that abled people do. For example, the father of a severely disabled person described his daughter’s work schedule: “some sorting, packaging utensils or toiletries, and painting a scarf, umbrella, or a picture. She talks to her friends, plays her DS game, and watches a movie on Fridays. No pressure, no stress” (Brown). More support for this section of the FLSA includes the fact that it would be very hard for most disabled people to get a job at all without it. Some disabled people need supervision, which would require the employer to hire two people when one would suffice. Not only this, but because of the low employment rate for anyone in America, more abled people are getting the low-skill jobs that would benefit disabled people. When there is a high demand for these jobs, employers will hire people who can do work the fastest, which means disabled people likely won’t be hired.

Along with this, some disabled people are against taking away Section 14(c) because it might jeopardize government benefits and insurance. “For example, every dollar after $85 in earnings lowers Supplemental Security Income [SSI] payments” (Thousands). Most workers earn between $700 and $1700 a month from Social Security Disability Insurance, or SSDI (Fessler). Earning the same amount of money as an abled person may take away disability paychecks altogether. These checks are given to help disabled workers make enough money to live off of, which the minimum wage does by itself, eliminating the need for extra income. If this extra income is abolished, however, so is the Medicare that people who get paid Social Security Disability Insurance receive. According to the Social Security Administration’s website, “[people are] automatically [enrolled] in Medicare after [they] get disability benefits for two years” (Disability). It would be nearly impossible for severely disabled people to find work that offered health insurance or earn enough money to cover health insurance without Section 14(c). When disabled workers receive SSDI payments and Medicare, they can live healthily and happily. However, abolishing Section 14(c) would mean taking away SSI and SSDI from working individuals, which would mean taking away their health insurance, too.

Severely disabled workers would not be able to get a job without Section 14(c), so from their point of view, it is essential to keep this part of the FLSA. If employers were required to pay everyone the same, regardless of the amount of work they could complete during their shift, disabled workers would generally not even be considered for hire. When the ability to work is of greater importance than the amount of money one gets paid for said work, people must keep their employers happy. This means making sure it’s legal to pay people for the amount of work they do rather than how much everyone else is making.

One company that specializes in providing work to severely disabled individuals is Opportunity Village in southern Nevada. In the CEO’s message, it states that Opportunity Village is “a place where [disabled individuals can] learn. A place they [feel] safe from ridicule and labels” (Brown). This organization offers “vocational training, community job placement, art & life skill enrichment, advocacy, and social recreation programs” (Brown) to severely disabled children and adults. Opportunity Village also runs a vehicle donation program, a thrift store, and three employment training centers. According to the “Fun Facts” section of their website, the disabled workers at Opportunity Village bake around 5,000 cookies a day, shred over 12 tons of paper a day, scan about 75,000 documents a day, and deliver an average of 22,000 pieces of mail a day (Brown). Annually, these workers serve more than 300,000 meals and “clean more than 3 million square feet of office space, medical clinics, community centers and parking lots” (Brown). This company boasts affable management to help the disabled workers, long term work experience to keep them from bouncing between jobs, unable to keep a steady routine, and a fun and relaxed setting for the disabled workers. Not only this, but Opportunity Village also claims to teach its disabled clients marketable job skills and increase disabled workers’ independence and self-esteem.

Opportunity Village offers many programs, including P.R.I.D.E. (People’s Right to Independence, Dignity, and Equality), which is a 24-hour care program for “individuals with very profound physical and intellectual disabilities” (Brown). This company also offers “Program Enable” for individuals who require hand-over-hand training, a job discovery program, and an employment resource center. If Opportunity Village were required to pay each worker full wage, in the best-case scenario it would have to lay off most of the people it employs. More likely, though, Opportunity Village would go out of business.

III. How Section 14(c) Harms the Disabled Community

Section 14(c) is not universally praised, however. Sheltered workshops have been said to “reinforce [a] life of poverty, leaving thousands isolated and exploited” (Corley). Often, it is very difficult for disabled workers to stop working at these workshops and move on to competitive employment. Sheltered workshops “exploit and segregate the worker” (Thousands) because they’re stuck in low-paying jobs with no idea how to get out, and this is terrible news for many disabled workers whose disabilities are not severe. In fact, many of them “feel trapped in these settings because they are cut off… from mainstream workplaces and lack… support services that would allow them to succeed outside of the workshops” (Serres). Sheltered workshops are supposed to be about helping disabled workers get mainstream jobs, not building a wall between workers and the world outside of these workshops. According to a survey done by the National Council on Disability, these facilities aren’t actually beneficial to helping workers transition at all, so they provide no purpose to people with disabilities that aren’t severe. However, this is still the only place many of them can find work.

Disabled people who are tested with time-studies have criticized the practice, explaining how easy it is to take advantage of: “sometimes the test is easier than [other times.] It depends on if, as near as I can figure, they want your wage to go up or down” (Schecter).Time-studies make sense for the employer, who can pay for the amount of work being done, but they are often taken advantage of. Many times, “productivity benchmarks are difficult for even people without disabilities to meet” (Blahovec), meaning that disabled people are being held to a higher standard than most abled people. Along with these high expectations, the tasks people are assigned to do often times don’t match their abilities or limitations. In fact, according to a Huffington Post article, a blind woman had to put clothes on hangers, organize them based on gender and size, and hang them up facing specific directions. The article went on to say, “assigning a blind person a task that is so visually demanding and expecting them to perform at the same level as someone who has no ocular impairment is setting that worker up for failure” (Blahovec). Not only are employers setting their workers up for failure, but they’re ignoring their roles of training and undervaluing the capabilities of workers by sticking them in whatever position is easiest. Sheltered workshops are supposed to train workers for higher-paying jobs, which isn’t being done if they’re getting basic jobs and no training at all. Disabled people do have some abilities that they excel at, but employers are ignoring this fact.

There have been many lawsuits against companies who take advantage of these laws. For example, in 2014, an “Iowa jury awarded $240 million to 32 mentally disabled men who had lived for years in squalid conditions while working for about $65 a month” (Matlack). Another lawsuit was against Seneca Re-ad Industries, Inc. who paid three employees insufficiently for their disabilities. These employers were not justified in paying subminimum wages, as the workers’ disabilities included visual impairment and Asperger’s Syndrome, neither of which affected the employees’ ability to work. The assessments done by Seneca Re-ad Industries, Inc. were found to be inaccurate, so they were ordered to pay minimum wage and give back pay along with attorney fees and reasonable litigation costs, all of which totalled $54,075.40.

Many proponents of change are the people negatively affected by Section 14(c), and they are not keeping quiet about the damage it does to them. For example, according to Ari Ne'eman, president of the Autistic Self Advocacy Network, "people are profiting from exploiting disabled workers… it is clearly and unquestionably exploitation" (Schecter). Harold Leigland, who works for Goodwill and earns subminimum wages, explained why he and the hundreds of people he works with can’t move on to a higher paying job: “we are trapped… everybody who works at Goodwill is trapped” (Schecter). Disabled workers are trapped in low paying jobs because they generally receive no information about better jobs, nor do they receive training that would make them ideal candidates for other jobs.

Although many nonprofit organizations that hire severely disabled people would go out of business if they were required to pay full wages, companies like Goodwill that mainly hire people without severely debilitating disabilities would not. As Leigland says, “according to the company's own figures about 4,000... disabled workers... are currently paid below minimum wage, [but] salaries for the CEOs of those franchises... totaled almost $20 million in 2011” (Schecter). What he said means that the company has the money needed to pay its workers fairly for their work, yet still pays them subminimum wages. Because the disabled workers are technically doing less work than their abled counterparts would be able to do, this is legal. However, if companies would focus on matching disabled individuals to jobs that they can and will succeed in and training their employees in skills that would allow them to do work more efficiently instead of finding the quickest and cheapest route, thousands more disabled people would be earning wages that they can live off of, without feeling unhappy about their jobs. According to Marc Maurer, President of the National Federation of the Blind, the way the law is presently written says that "[Americans] who have disabilities aren't as valuable as other [people,] and that's wrong. These folks have value. We should recognize that value" (Schecter).

IV. What Should Happen With Section 14(c)

Completely abolishing Section 14(c) could ruin the lives of hundreds of thousands of severely disabled workers. However, due to the negative effects on many more disabled individuals, some obdurate people believe that Section 14(c) should be erased entirely. For example, former New York State Governor David A. Patterson said that Americans need to “strike the language from the bill that discriminates against Americans with disabilities” (Former). His idea is much too severe of a change for it to work, because many companies and nonprofit organizations will be forced to shut down, which will leave severely disabled people out of work completely. As put by Steve Peterson, the president of a company that employs 49 disabled workers, “the system should be changed, but in a way that won’t put nonprofits out of business and disabled people out of work” (Thousands). Amendments need to be made to Section 14(c), but abolishing the law completely is a disastrous idea that just won’t work.

Pennsylvania and Minnesota have tried to follow this advice. Pennsylvania State Senator Pat Browne has proposed a bill that would, if passed, offer tax credits to businesses that employ people with disabilities. This would mean that the more disabled people work for a company, the less taxes that company would have to pay. Passing this bill would give companies incentive to hire disabled workers, which would make it easier for them to get out of sheltered workshops and into competitive employment, but this bill has not left committee. Another thing Pennsylvania did was create a rule requiring an affirmative-action goal of 7% of employees with disabilities, meaning that 7% of a company’s workforce must be disabled workers. However, according to a Citizen’s Voice article, “it was never taken seriously and never enforced” (Thousands). This means that Pennsylvania has been ineffective at dealing with the problems at hand regarding disabled workers.

Disabled Minnesotans have had better luck with taking care of sheltered workshops. In Minnesota, employees at sheltered workshops must be provided with regular career counseling and information about better jobs within the community, each given by entities separate from the employer. In addition, “individuals with disabilities who are younger than 24 must go through an assessment process before they are eligible for a job at less than the minimum wage” (Serres). These new regulations won’t do away with subminimum wages or sheltered workshops completely, so severely disabled workers can still be employed at sheltered workshops when doing so is beneficial to them. Nevertheless, the new rules will help many workers leave low-paying workshops for higher-paying mainstream jobs, if they so wish. These new regulations will also help “curtail the pipeline of young workers entering workshops from high school” (Serres).

In theory, these changes would work great, but unfortunately, Minnesota did a poor job of providing employers blueprints for how to take care of business with the new regulations. Often, employers were confused by the new rules, and many didn’t know how to bring up discussions about higher paying jobs. According to Marty Lampner, the President of Chimes Inc., a non-profit organization that works on providing services to disabled people, “the bill does not go far enough in terms of making sure that the resources necessary to successfully transition a system are there” (Anamika). Luckily, though, “the senators [plan] to take a closer look at who the bill affects and what can be done to ensure a smooth transition out of the… program” (Anamika).

Still, Minnesota doesn’t function as a paragon of rights for disabled individuals. Based on their success with these new regulations, though, this is a highly beneficial way to handle the sheltered workshops issue, as long as employers understand disabled workers’ rights. In order to appease all disabled people and their employers, we need to make a gradual transition out of sheltered workshops by giving disabled workers more information about where they can work and how they can get out of low-paying jobs.

Many people believe that Section 14(c) should be left how it is, but the people making this claim don’t understand the true consequences of this law. Low wages wreak havoc on the lives of hundreds of thousands of disabled people. Nationwide, in 2014, 420,000 disabled workers earned subminimum wages (Matlack). In the same year, only 17.1% of disabled people were employed (Matlack). In Maryland in 2015, 3,600 disabled workers were paid below minimum wage (Anamika). Around 20% of these people worked in a facility based setting, “where they work an average of 17.33 hours over a two-week period and make $66” (Anamika). Finally, in Pennsylvania in 2014, “about 13,000 disabled [workers earned] an average of $2.40 an hour” (Thousands). Of these, an estimated 3,600 workers earned below a dollar, and at least 500 people with disabilities earned less than $0.25 an hour (Thousands).

Most disabled workers earning these low wages do not have severe disabilities, and they need to take care of themselves and their families. If the law is left as is, these people will continue to earn less money than they can live off of, and the rights of people with disabilities will continue to be undermined and ignored. Section 14(c) is very harmful to the majority of the disabled community, and needs to be dealt with. Although abolishing the law completely is a bad idea, it needs to be amended before it can do any more damage.

Works Cited

"Blind Americans to Protest Subminimum Wages." Business Wire. Business Wire, 20 July 2011. Web. 23 Oct. 2016.

"Disability Planner: Medicare Coverage If You're Disabled." Social Security. Social Security Administration, n.d. Web. 19 Nov. 2016.

"Fair Labor Standards Act (FLSA) Section 14(c) Advisor." Elaws - Employment Laws Assistance for Workers and Small Businesses. United States Department of Labor, n.d. Web. 01 Nov. 2016.

“Former New York Governor Comments on Subminimum Wages for Disabled Workers.” National Federation of the Blind. National Federation of the Blind, 25 July 2012. Web. 23 Oct. 2016.

"Maryland Votes to End Subminimum Wage." Autistic Self Advocacy Network. Autistic Self Advocacy Network, 28 Mar. 2016. Web. 30 Oct. 2016.

"Thousands of Disabled Workers in Pa. Paid below Minimum Wage." The Citizen's Voice. The Citizen's Voice, 4 Aug. 2014. Web. 02 Nov. 2016.

Anamika, Roy. “Minimum Wage Bill for Disabled Maryland Workers Called A Battle For Civil Rights.” Daily Record, The (Baltimore, MD). Newspaper Source Plus, n.d. Web. 23 Oct. 2016.

Blahovec, Sarah. "It's About TIME: Ending Subminimum Wages for Workers with Disabilities." The Huffington Post. TheHuffingtonPost.com, 4 Oct. 2015. Web. 31 Oct. 2016.

Brown, Bob. "CEO's MESSAGE." Opportunity Village. Opportunity Village, n.d. Web. 18 Nov. 2016.

Brown, Bob. "It's Not Just about the Paycheck." Las Vegas Review-Journal. Las Vegas Review-Journal, 30 June 2013. Web. 31 Oct. 2016.

Corley, Cheryl. “Subminimum Wages for the Disabled: Godsend or Exploitation?.” Morning Edition (NPR). Newspaper Source Plus, n.d. Web. 23 Oct. 2016.

Danielsen, Chris. "Americans with Disabilities to Protest Goodwill's Subminimum Wages." National Federation of the Blind. National Federation of the Blind, 20 Aug. 2012. Web. 23 Oct. 2016.

Doyle, Alison. "2017 Federal and State Minimum Wage Rates." The Balance. The Balance, 20 Sept. 2016. Web. 30 Oct. 2016.

Fessler, Pam. "Why Disability And Poverty Still Go Hand In Hand 25 Years After Landmark Law." NPR. National Public Radio, 23 June 2015. Web. 31 Oct. 2016.

Matlack, Carol. "Paying the Disabled Less Than Minimum Wage-Legal in the U.S.-Roils Britain." Bloomberg.com. Bloomberg, 16 Oct. 2014. Web. 02 Nov. 2016.

O'Hara, Mary. "In the US They Even Have 'sub-minimum' Wages for Disabled People" The Guardian. Guardian News and Media, 24 May 2016. Web. 30 Oct. 2016.

Schecter, Anna. "Disabled Workers Paid Just Pennies an Hour – and It's Legal." NBC Investigations. NBC News, 25 June 2015. Web. 30 Oct. 2016.

Simpson, Cicely. "Current Wage Model Works." Press Reader. USA Today, 6 Nov. 2015. Web. 23 Oct. 2016.

Sloan, Rose. "The TIME Act: Transitioning to Integrated and Meaningful Employment Act." National Federation of the Blind. National Federation of the Blind, 12 Dec. 2014. Web. 31 Oct. 2016.

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