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Congressmen Call For End To Subminimum Wage

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Employers would no longer be able to pay workers with disabilities less than minimum wage under a bill introduced in Congress this week.

Since the 1930s, employers have been able to obtain special permission from the U.S. Department of Labor to pay those with disabilities what’s known as subminimum wage, or less than the federal minimum that’s currently $7.25 per hour.

The legislation introduced in the U.S. House of Representatives Tuesday would phase out the controversial practice over three years.

If enacted, the bill would immediately force the Labor Department to stop approving new businesses for certificates to pay subminimum wage. Companies already paying less to workers with disabilities would have up to three years to increase their wages to the federal minimum.

“Ensuring that Americans with disabilities receive equal pay for equal work is more than a matter of basic fairness, it’s a long-overdue acknowledgement of the value disabled Americans contribute to our workplaces every day,” said Rep. Tim Bishop, D-N.Y., who introduced the bill along with Rep. Cliff Stearns, R-Fla.

The current effort to end subminimum wage comes just two months after the U.S. Senate dropped plans to address the issue amid controversy. A proposal in that body would have established regulations over who could work for low wages, but would not have ended the practice entirely.

It is unclear when the new legislation might be considered in the House and no similar measure has been introduced in the Senate.

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Comments (17 Responses)

  1. Sonja says:

    What is the number and title of the bill so we can call and urge support? Details are important if we are to advocate. Thanks.

  2. life2great says:

    How would this effect workshops?

  3. TFred says:

    This sounds nice, but be prepared for unintended outcomes. As an employer why should I hire anyone, pay them minimum or higher, and then find that their work generates less than $6 an hour billable based on their work speed/quality yet I have to pay them minimum plus benefits and any overhead? Do I make that up on volume? At $9 an hour plus 18% benefits and 25% for overhead, my cost would be $13.50. Where do I get the difference to cover my costs and remain in business? I need to pay mortgage, lights, gas, and all other costs. Are you prepared for several hundred thousand people to have almost no work options if this goes through? My local area has about 9.5% unemployment.

  4. bneal says:

    This bill will be the death sentence for sheltered workshops trying to provide job training to people with disabilities. You simply cannot pay a person minimum wage when their productivity level is 5 or 10%. It will result in hundreds of thousands of people with disabilities being without services.

  5. hollywood says:

    The increase in earnings that SHOULD benefit those with disabilities will sadly put an end to their employment. It will be a rare businessman who will hire and keep a person who does not perform to the maximum output of any other person in that business. There is nothing wrong with being paid for your performance: average, above average or below average.

  6. mgreene says:

    If this bill is passed, it will be a challenging time for traditional workshops and provider communities as they scramble to become more responsive to providing employment opportunities that are respectful to individuals with I/DD, but the long term outcome will be positive for all. All for it. Need more info, please. Bill #? Who to call, etc.

  7. waykul says:

    Thanks you for TFred for mentioning unintended consequences. This is another example of our legislators responding on emotion without getting the facts. Those facts are that people with disabilities would lose their jobs, their friends at work and and any opportunity to build a better life. It’s one thing to deplore persons working for less than minimum wage, it’s another thing to do something about it. Simply banning subminimum wages does nothing to improve their lives. Where are the efforts to help provide the supports that people with disabilities really need to find a keep good jobs? Hearings on this issue are needed. Not expected, but still needed.

  8. _penny_ says:

    I am excited to see that people are starting to realize that those with disabilities are equal to those who are not. They are not less people. There are many workshops that have converted to pay at least minimum wage or MORE it can be done and it can be a success for everyone. I look forward to an end to this practice. The time of exploitation in this area will finally come to an end.

  9. seeandbesafe.com says:

    The legislation is intended to create an environment of equal pay for equal work across the employment board and not just for able bodied people. How can anyone argue with that? Arguments against this seem to suggest that employers are somehow doing a favor to the disabled employee who is performing a job for which he/she has not the skill and thus should accept less pay. If someone is not qualified to perform a job then don’t hire them at all or if you want to do them a favor create a job that they can do. But don’t hire them and suggest that they should accept less than anyone else. That’s wrong.

    @bneal
    How are we determining a 5-10%productivity level?

  10. TFred says:

    seeandbesafe – productivity is pretty easy. If a job requires assembling/packing 100 pieces per hour of something and you can do 50 correctly, you are working at (50/100) 50%. If I have to pay anyone $8, but their work is worth $4, I do not over my costs. Whatever the something is makes no difference: CDs in a case, box in a shipper case, pounds of plastic recycled, tires changed, bricks laid, etc. I agree with your basic idea. Hire the person who can do the job. I am in a market with lots of competitors. If my price is too high, customers go elsewhere or orders do not come and I close. No jobs for anyone including me. When I hire temporary workers there is a productivity level they have to hit or I cannot afford them. They are gone quick.

  11. GregF says:

    This is obviously a bill promulgated by people who may sincerely want the best for adults with disabilities but do not fully understand the concepts of productivity and competition. As idealistic as we may want to be, we cannot take an employee who is 10% to 20% as productive as an average worker and make their abilities fit into economic realities and contract pricing structures, in an economic climate that is already witnessing 10% unemployment. You just simplified my job as the director of an adult workshop facility. I will have to downsize my vocational operation and take over half of my 80 employees off the payroll.

    Look around at your local private businesses. Does it occur to the legislators behind this bill that we see very few people with physical limits performing physical labor, simply because private businesses know full well that low productivity can’t and never will pay the bills. In looking at the relationship between minimum wage laws and persons with disabilities, the old cliche,”half a loaf is better than none”, certainly applies here.

  12. seeandbesafe.com says:

    TFred-You make a good point. However there are many more unintended consequences of accepting this form of financial compensation. What happens when this gets extended beyond it’s intended population? I’ll be honest and just tell you that most people whom I’ve spoken with regarding this topic, automatically assumes that the affected workers are only the mentally handicapped and sadly they act as though it’s okay to treat them with less respect. I hate that! I have not met one non mentally challenged, paraplegic, quadriplegic (which I am. c5-6) etc who says that they would accept this arrangement. I started my own biz to avoid this ever being an issue for me but for those who can’t I feel we are starting down a slippery slope. The public school system has been putting out the worst product in the country over the past 20 years. If you want to start paying people based on perceived lack of productivity, do it across the board. I have to ask though. Are these individuals paid regular salaries first and then assessed to have their pay adjusted? Or are they automatically assigned this sub pay? If they increase productivity, is their pay increased? Just asking.

  13. songbird says:

    We must protect the sheltered workshops and job training opportunities for our clients. While perhaps the congressmen are tring to equalize pay for disabled individuals, those of us involved with this see the other side of what this bill could do.

  14. TFred says:

    seeandbesafe – Have not been here for awhile. Payment in our place is based on piece rates and hourly jobs. Hourly jobs always pay above minimum, but there is still a basic performance standard that has to be met. We have jobs which simply cannot be time studied because the tasks cannot be made consistent such as loading a pallet with product, move it with a pallet jack, skid wrap it and place it in a shipping area. If you can do 17-20 pallets an hour, great. If not you will not be assigned this task. Other jobs are piece rated and you get paid for what you complete. If a job requires 100 pieces an hour and you do 110, you get paid for 110. If you do 15, you get paid for 15. There is no way our company could afford to employ someone who completes 15 pieces, but I have to pay them as if they completed 100. We employ many people who, when they are doing their best, complete less than 50 pieces an hour. If this 14c rule is dropped, they will no longer be working for us. I cannot think of any local employer who will hire them for the exact same reason.

  15. cromwellrj says:

    I have a young adult son with autism and intellectual disability who works at a sheltered workshop. If this law (eliminating subminimum wage) is passed, his workshop will close, and the state will have to pay hundreds of dollars per month for him to attend day care in an adult day habilitation program. He had been in one a few months after “graduation” (at age 21) while he was on waiting lists for the 6 sheltered workshops in our county.

  16. lkdelacourt says:

    There is a lot of missing information and erroneous information about the subminimum wage law at issue among these comments as well as the decades of research on successful employment services for people with developmental disabilities. FLSA 214(c) only allows sheltered workshops and other employers to pay subminimum wages to a person with a disability if they are disabled for the SPECIFIC JOB the workshop hires them to perform. In other words, the law encourages state agencies to deliberately spend service dollars on jobs that are by definition a bad fit for the worker with a disability, and then allows the employers to deny them fair wages because of the bad fit.

    Extensive research on sheltered workshops, including government reports, have proven that no more than 5% of workers in them ever transition to the community, even though workshop providers claim they are teaching job skills. The work is mindless, outdated, and often just busywork that has nothing to do with the employee’s interests, background, skills, or natural and government supports. Workers with disabilities are doing jobs where they cannot meet 100% productivity standards because federal and state laws encourage this absurd practice. I do not currently have a disability but there are millions of jobs I am not qualified for–there are also plenty for which I am. People with disabilities are no different. These same workers (and studies have repeatedly confirmed this to be true of even those with the most severe disabilities) can succeed at many other types of jobs–REAL jobs in the community, where they are paid at least minimum wage–with an evidence-based practice promoted by the federal government known as supportive employment (though remember many people with disabilities have enough education and work experience that they don’t need any supports in a job that matches their qualifications). All that money going to workshops, which have been exploiting people with disabilities while raking in state funds (news reports have noted several workshop execs around the country making hundreds of thousands of dollars a year under these arrangements) should be shifted, with care and good planning, to these proven supported employment services (with individual’s consent). No employer has to hire an unqualified candidate as long as reasonable accommodations are provided under the ADA, and employers get the benefit of free supportive services to help their workers with developmental disabilities as much or as little as needed so they can excel at work. TFRed, feel free to only hire people who can meet your productivity standards with or without reasonable accommodations and pay them at least minimum wage as required by law–that is your legal right. Let’s see if you can actually remain in business with these workers you identify as so much more productive than your workshop clients (who you should be providing benefits, by the way, if you provide such benefits to workers without disabilities), without any more government funding to keep you afloat.

    I’m quite dismayed by the totally misleading claims of subminimum wage employers here (not all commenters by any means) who are feigning ignorance of the actual FLSA statute and regulations. I also hope that those commenters (and I understand some of you are just learning about this issue and recognize you are just trying to learn more, which I deeply respect) who claim that they are only seeking to protect the workers in question feel at least a pang of shame every now and then–the vast, vast majority of these individuals are making as little as pennies (again, documented examples of wages this low are available) per hour doing work, which you legally declared to them to be specifically unqualified for, while you collect vocational services funding for each one of them as well as money you from service contracts they fulfill. And please all, do remember that 14(c) workers are segregated from people without disabilities except workshop staffers in over 85% of cases nationally, as if they are not members of our communities and have nothing of value to offer us.

    As some of you were wise to note, suddenly closing workshops without a careful plan for transitioning interested persons into effective services is not what Harkin or disability advocates are seeking. But know that Vermont totally phased out all workshops years ago and many determined state agencies are currently designing or implementing a similar phase out.

  17. bneal says:

    I think the point that Rep. Bishop doesn’t understand is that people with disabilities ARE receiving equal pay for equal work under the sheltered workshop certificate. I don’t believe he did his research. Comensurate wage rates must be documented under the certificate. If Smith Company pays their workers $12.00 an hour for the job, the piece rate is calculated on $12.00. If their workers are able to do 100 wigets an hour, they are getting 12 cents wiget. Under the certificate the disabled worker must be paid that same rate —12 cents a wiget. How is that not equal pay for equal work.

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