State of the Nation: Sub-minimum Wage

State of the Nation:
Sub Minimum Wage
Employment First Maine Coalition
November 14, 2014
A National Lens on 14(c)
HR 3086
National Federation of the Blind
National Council on Disability
State efforts: NH, MI, RI, MA, MD, VT
APSE (circa 2009)
• As an organization that promotes national,
state, and local policy development which
enhances the social and economic inclusion
and empowerment of individuals with
disabilities, the Executive Board of APSE is
calling for the complete phase out of subminimum wage for all individuals with
disabilities by the end of 2014.
• In calling for phase out of sub-minimum wage,
APSE recognizes the importance of undertaking
such action in a way that is carefully thought out:
– Leading to movement of individuals currently being
paid sub-minimum wage into individual, integrated
employment opportunities paying minimum wage or
higher, and’
– Avoiding unintended consequences that would not
only damage efforts to expand community
employment, but result in actual loss of rights and
opportunities for individuals with disabilities to full
integration and inclusion in society.
• Therefore, elimination of sub-minimum wage must
be accomplished based on the following principles
and concepts:
• Phase out of sub-minimum wage should occur over time,
• In conjunction with the phase-out of sub-minimum wage,
a national effort must be undertaken to improve the
overall quality of community employment outcomes both
in terms of individual outcomes (wages, hours, diversity of
employment), system outcomes (efficiency and
effectiveness), and proper funding of services and longterm supports.
– The movement of individuals into non-work day
habilitation facilities, instead of into community
employment, is not an acceptable outcome of the
phase out of sub-minimum wage.
– A key focus of efforts to phase out sub-minimum must
be ending the use of sub-minimum wage for students
entering the word of work, including: a) elimination of
the use of 14(c) certificates for students currently in
school; b) elimination of placements in jobs using
14(c) certificates as a post-secondary outcome.
– A federal cross-agency task force should be created to
develop and implement the phase out of subminimum wage in conjunction with implementation of
a cross-disability national Employment First Policy.
TASH supports the immediate need for
federal legislation that will result in a
planned phase- out and elimination of
section 14(c) of the FLSA. As part of this
phase-out, no person with a disability who
wishes to work should be denied the
assistance they need to secure employment
in the general workforce at minimum wage
or higher.
• The elimination of Section 14(c) should be done
according to the following principles:
• A. Sub-minimum wage should be eliminated
through carefully planned phase out that ensures
the desired outcomes are achieved for the vast
majority of people with disabilities who are
impacted. Some unintended, negative
consequences may occur, but these should not be
widespread, nor should they be predictable and
therefore avoidable.
• Desired outcomes are wage equality and
integration. No plan for elimination should be
supported that inadvertently inhibits the
achievement of one or both of the desired
• Results of the phase out of sub-minimum wage
should include no decline in employment rate
among people with disabilities impacted by
phase out (i.e. those working at sub-minimum
wage immediately prior to phase out).
H.R. 3086
112th Congress, 1st Session (2012)
“To phase out special wage certificates under
the Fair Labor Standards Act of 1938 under
which individuals with disabilities may be
employed at subminimum wage rates.”
Sec. 3 Transition to Fair Wages
(1) DISCONTINUANCE.—Effective on the date of
enactment of this Act, the Secretary of Labor
shall discontinue issuing special wage
certificates under section 14(c) of the Fair Labor
Standards Act of 1938 (29 U.S.C. 214(c)) to any
new entities not currently holding a certificate.
(2) TRANSITION.—All special wage certificates on
the date of enactment of this Act—
(A) by private for profit entities shall be
revoked 1 year after such date of enactment;
(B) by public or governmental entities shall be
revoked 2 years after such date of en- actment; and
(C) by non-profit entities shall be revoked 3
years after such date of enactment.
(3) REPEAL.—Effective 3 years from the date
of enactment of this Act, section 14(c) of the
Fair Labor Standards Act of 1938 (29 U.S.C.
214(c)) is repealed and any remaining special
wage certificates issued under such section shall
be revoked.
National Council on Disability
Transformation of the 14(c) Program
• Recommendation: NCD recommends the
Congress should pass legislation phasing out the
14(c) program as outlined in this report.
• Recommendation: NCD recommends that the
U.S. Department of Labor cease issuing all
Section 14(c) Certificates thirty days after passage
of this legislation.
• Recommendation: NCD recommends that the
Department of Education undertake
rulemaking to prohibit schools districts from
establishing placement in a setting whereby
the student will receive subminimum wage as
a goal in any IEP .
Recommendation: NCD recommends that the
Department of Labor undertake rulemaking to phase out
all existing 14(c) certificates to providers of employment
services according to the following schedule:
• All individuals in certificate settings for ten years or less
shall be transitioned within two years
• All individuals in certificate settings for ten to twenty
years shall be transitioned within in four years
• All certificates shall expire in six years, and all
individuals in certificate settings longer than twenty
years shall be transitioned within six years.
• Many USBLN® member companies have taken proactive
measures to hire qualified individuals with significant
disabilities who had unnecessarily worked in segregated
environments in which they earned significantly below
minimum wage.
• Once entering a competitive work environment with
reasonable accommodations and training, these qualified
employees are able to maintain and exceed performance
standards, often earning well above minimum wage, in an
integrated setting.
• We maintain that all qualified employees,
including those with disabilities, should
receive equal pay for equal work as do their
colleagues without disabilities. As an
organization, the USBLN® is committed to this
• 2012
National Federal of the Blind
• The Case Against the Section 14(c)
Subminimum Wage Program
Prepared for the National Federation of
the Blind by Samuel R. Bagenstos suggests that
14 (c) is an anomaly in the post-ADA world, and
calls on Congress to repeal it.
New Hampshire
House Bill 1174: An Act establishing a committee to
study the payment of subminimum wages to
persons with disabilities (2014)
• Statement of Purpose. The general court finds
• I. The state of New Hampshire is committed to
ensuring that all workers earn at least the state
minimum wage.
• II. The state of New Hampshire and all of its state
agencies are committed to employment policies that
enable persons with disabilities to exercise selfdetermination, be independent, be productive, and be
integrated and included in all facets of community life.
• III. Employers should be encouraged to hire qualified
workers with disabilities and pay them at least the
prevailing wage.
• IV. Employment in the general workforce is the first
and preferred outcome in the provision of publicly
funded services for all working age citizens with
disabilities, regardless of level of disability.
Payment of Subminimum Wages; Persons with
Disabilities; Committee Established; Membership;
• I. There is established a committee to study and
identify New Hampshire laws and rules that
permit the payment of subminimum wages to
persons with disabilities, and to recommend
changing such laws to reflect the contemporary
policy and practice of providing wages to
individuals with disabilities that are fair and
comparable to those wages paid to individuals
without disabilities.
Duties. The committee shall:
• I. Analyze federal laws on wages, including
section 14(c) of the Fair Labor Standards Act.
• II. Identify specific state statutes and rules that
need to be changed to end the payment of
subminimum wages to workers with disabilities.
• III. Analyze national and state data on the
payment of subminimum wages to workers with
disabilities. This analysis shall include the
employers and provider agencies in New
Hampshire that are currently paying subminimum
wages and the circumstances under which such
wages are being paid.
• IV. Analyze the potential impact in New
Hampshire of proposed federal legislation to
phase out the payment of subminimum wages to
workers with disabilities.
• V. Analyze the economic advantages and
disadvantages to employers of phasing out the
payment of subminimum wages to workers with
disabilities in New Hampshire.
• VI. Analyze whether public funds are being used
in New Hampshire to directly or indirectly
support paying subminimum wages to workers
with disabilities, and recommend a policy to end
such practices.
VII. Develop a strategic plan to be used by
employers and provider agencies to effectively
phase out the payment of subminimum wages
that includes a timeline, mechanisms to provide
technical assistance and training to employers
and provider agencies as they phase out
subminimum wage arrangements, and access to
employment services for individuals with
disabilities as they are phased out of
subminimum wage arrangements.
Report due to the NH Legislature 11/1/14
Michigan (2014)
Employment First is based on the expectation that
individuals with disabilities can, with proper
training, job matching techniques, assistive
technology and reasonable accommodations, earn
a fair and prevailing wage alongside individuals
without disabilities in fully integrated settings. This
philosophy lays the foundation upon which a
productive, valued workforce of individuals with
disabilities can be built.
• Examples of appropriate policies supporting
Employment First include, but are not limited to,
the following:
• All service providers and employers will presume
employability of individuals with disabilities. No
public dollars should be spent asking if someone
is employable but rather should be invested in
up-front services that are focused on determining
how an individual can be successfully employed.
• All Person-Centered Planning is required to
include employment objectives for individuals
with disabilities who wish to be employed.
• All transition-age youth with disabilities will have an
integrated employment outcome identified in their
Individualized Transition Plan (ITP) and a coordinated
set of supports and services to help achieve the desired
employment outcome.
• All transition-age youth with disabilities will have
community-based training and job exploration
opportunities as part of their secondary education
• Funding will be allocated to assist Community
Rehabilitation Programs as they restructure from
sheltered employment to community-based
employment settings.
Rhode Island
• The Department of Justice (DOJ) launched an
ADA investigation in January 2013 into Rhode
Island’s day activity service system for people
with I/DD. The department’s initial
investigation found that the majority of
people receiving publicly funded employment
and day habilitation services in segregated
programs can work and want to work.
RI Settlement Agreement
The key components of the settlement require
Rhode Island to provide the following:
• • Supported employment placements that are
individual, typical jobs in the community, that pay
at least minimum wage, and that offer
employment for the maximum number of hours
consistent with the person’s abilities and
preferences, amounting to an average of at least
20 hours per week across the target population;
• Supports for integrated non-work activities for times
when people are not at work including mainstream
educational, leisure, or volunteer activities that use the
same community centers, libraries, recreational, sports
and educational facilities that are available to
• Transition services for students with I/DD, to start at
age 14, and to include internships, job site visits and
mentoring, enabling students to leave school prepared
for jobs in the community at competitive wages; and
• Significant funding sustained over a 10-year period that
redirects funds currently used to support services in
segregated settings to those that incentivize services in
integrated settings.
Massachusetts’ approach to Employment First focuses on individuals
with developmental disabilities and aims to end sheltered workshops.
Individuals and groups will be transitioned to either community work
at minimum wage or higher or to integrated day programs.
The state plans to continue to move people from day services to
community employment at minimum wage or higher over the next
few years and to gradually phase out group employment.
The state, overall, is eliminating sheltered work as an option and
moving people from sheltered work to individualized community work,
at minimum wage or higher, while making employment the first rule
for individuals entering the developmental disabilities support system.
This was achieved through a developmental services statute, policy
#2010-2, effective August 1, 2010.
The Arc of Maryland called on the state to end
the use of subminimum wages by 2017. The Arc
calls for the plan to include:
– An accurate picture of current employment,
underemployment, and subminimum wage
statistics for the state and also identifying
measureable target goals;
• Technical assistance, supports, and fiscal
incentives to organizations currently using 14(c)
employment programs to move to communitybased and fairly compensated employment
• Model Employment First policies for adoption by
the community rehabilitation organizations;
• The planned movement of individuals into
employment programs embracing promising and
evidence-based practices available today;
• Ongoing plans for baseline and trend data
collection, analysis, and interpretation for
purposes of continual improvement. Progress
should be transparent and visible and reported in
an employment dashboard;
• Addressing differences found in Maryland
including urban, suburban, and rural settings as
well as cultural and language differences found
throughout the state of Maryland;
• Imposing a mandated moratorium for
transitioning youth in Maryland entering 14(c)
• Assuring the work group disproportionately
includes representative individuals and
families such as transitioning youth looking for
employment, individuals with I/DD currently
in subminimum wage jobs, and employers.
Closed its last sheltered workshop in 2002
No small group employment or enclaves
Average wage for folks with I/DD is $9.26
Average work week is 16 hours

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