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Obama Administration Weighing Subminimum Wage Options


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The Obama administration may be rethinking its decision to exclude many workers with disabilities from a plan requiring federal contractors to be paid at least $10.10 per hour.

President Barack Obama said last week in his State of the Union address that he would issue an executive order mandating an increased minimum wage for companies doing business with the government.

However, U.S. Secretary of Labor Tom Perez told disability advocates that federal contractors would still be allowed to employ individuals with disabilities at less than the federal minimum.

Now the administration appears to be reconsidering.

In an interview on “The Diane Rehm Show” this week, Perez said that the issue is one the administration is “examining right now as we prepare to finalize the executive order.”

“We’re actively looking at what our legal authorities are and what our abilities are,” Perez said.

The comments represent a change in tone from the administration, with White House officials initially saying that congressional action would be needed in order to make any change to the law that allows those with disabilities to earn less than minimum wage.

The apparent shift comes after an outcry from several disability advocacy organizations.

“All employees of federal contractors should mean all employees, regardless of disability status,” reads a letter to the administration from the Collaboration to Promote Self Determination that was signed by 25 groups including the Autism Society, the National Down Syndrome Congress and the National Disability Rights Network.

Similar correspondence also came from the National Council on Disability and the National Federation of the Blind.

Under a provision that’s been in place since the 1930s, employers can obtain special permission from the Labor Department to pay individuals with disabilities less than the federal minimum. Thousands of workers with disabilities are believed to be employed by government contractors earning so-called subminimum wage.

The practice has come under fire from many advocacy groups in recent years as being outdated, though others in the community insist that it remains necessary in order to ensure that work opportunities exist for those with even the most severe disabilities.

For his part, Perez told Rehm that he believes the subminimum wage provision “really has worked to the detriment of people with disabilities.”

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Comments (14 Responses)

  1. Barb says:

    And as soon as you make that requirement, programs that serve people with severe disabilities and have NISH contracts will be out of that business. Unless the Federal government is going to pay to subsidize those wages, regardless of individual level of productivity, agencies will not be able to afford to keep those contracts and lose money on them. In some organizations, these are the only jobs available to the people they serve.

    Be very sure of unintended consequences before you take this forward.

  2. Dadvocate says:

    Thank goodness for our system of checks and balances. Hopefully a second “look” will convince Secretary Perez that his first one was correct; his legal authority and ability to circumvent the current exemption program doesn’t exist. Predictably, it’s the largely government funded “advocates” with their rigid ideologies, not the actual folks voluntarily participating in this program (instead of sitting at home) or the underappreciated professionals providing day to day services to people with disabilities, who are trying to impose their extreme views by fiat. I guess these folks fear that an inclusive process of give and take involving all stakeholders won’t get them the result they want, which is one size fits all disability policy and an end to specific disability informed programs and solutions. Perhaps one day they will learn that governance by rule, rather than law, never works. People must have the right to choose…even if they elect to choose programs or solutions other advocates abhor.

  3. Doreen says:

    With so many unemployed people competing for every available job opening, individuals with significant disabilities will be less likely to be hired if employers have to pay the same wage for someone who may not have the same output. If a worker with a disability is doing the exact same job as everyone else, the ADA would protect them from discrimination based on disability status and they should earn the same wage. However, if the job functions and performance expectations have been reduced in order to create an opportunity for someone to enjoy the tangible and intangible benefits of employment, I say that this is much better than sitting at home earning no money at all.

  4. Borgi Beeler says:

    If this happens, will contracts be adjusted to cover the increased costs? According to everything I know about the contracting process, the answer to that is a simple “no”. So federal contractors that employ people at lower than 100% productivity will either replace those employees with more productive people or operate the contracts at a loss… which doesn’t work very well for very long. I really don’t understand what NDRN and the rest of those groups are thinking.

  5. Whitney says:

    The harsh reality many have ignored the sordid history of subminimum wage and labor abuse. This country was founded on greed of man by indenturing servitude, slavery, child laborer, and migrant farmers all received wages that were far bellow or no wages. It is not right that the workers who are disabled that they get less money than abled bodied workers who really don’t want that job. All these same arguments were made for the same reasons with another group. Sub-minimum wages are equilavent to modern day slavery and is crying shame this country has yet to learn what equality is really about. For a person with disability this country has promised equality but lies in their face.

  6. joe gerardi says:

    it is truly devastating to peoples chances of living as real a life IN THE COMMUNITY as possible
    that we allow these “NONPROFIT” ( ha ha ) facilities to continue to take advantage of people with “wages”
    that are truly slave labor—-my $ says most of their execs are driving around in luxury autos !!
    as a dad of a self determined ( but certainly developmentally diverse ) young man it seems to me that
    working less hours at a real wage job is far better than continuing to do busy work that only serves to
    line the pockets of some at the expense of capping the expectations that our society holds for those that
    we are all supposed to care about—

  7. Julie says:

    “For his part, Perez told Rehm that he believes the subminimum wage provision “really has worked to the detriment of people with disabilities.”” – spoken from the point of view of someone who has not seen the many doors and opportunities to participate in employment that subminimum wage has afforded people with significant intellectual disabilities. Competitive employment is great and for those that can work competitively-more power to you-and I’d advocate that you pursue it. Nonetheless there is a segment of the population that is unlikely to work competitively. It’s a fact. Do not close the door on these folks.

  8. Nicole LeBlanc says:

    Paying sub-minium wage to people with disabilities is Outrageous! We are Not a burden. How can we become self supporting if we make only pennies? Sub-minimum wage is slavery! No one with a disability wants to live off of SSI for the rest of their life. We need to promote independence Not dependence on government. This violates Our RIGHTS!!!!!!!

  9. Thomas C. Wood says:

    As an Autistic older adult with Cerebral Palsy who has a 4 year engineering degree from Wentworth Institute, the New Hampshire State Department of Vocational Rehabilitation for the Disabled tried to coerce me into a sub-minimum wage job, just to say they “helped me”. I told the damn “high and mighty” Vocational Rehabilitation Counselor I was stuck with to “shove it”. Anyway, I am stuck as an older adult, living in poverty on SSDI. The State Department of Vocational Rehabilitation for the Disabled here in New Hampshire is nothing more than a “pipeline” to funnel people like me with lifelong developmental disabilities into the sub-minimum wage “Sheltered Workshop” slave-labor system.

    Anyway, the last time I ever had employment, I worked in the field of Robotics as a Senior Electronics Engineering Technician in a Design Engineering Lab, assisting 5 doctorate-level engineers.

    And all NHVR could offer me was to sit all day long at a table in a “Sheltered Workshop” filling boxes with “Christmas Ornaments” for ~ $1.00/hour?

  10. Bruce Stover says:

    Regardless of how it has been done in the past, it is time for a change. The executive order only addresses the employees of government contractors. The few more dollars per hour that would be paid to the few disabled workers in order to pay them an equal minimum wages, are not going to hurt the government contractors. Tax breaks for hiring disabled workers exist that also make it more attractive to hire disabled workers regardless of paying them an equal wage and they act as much better incentives when the well being of the workers is considered.

    If the contractors don’t want to pay all employees at least minimum wage, then the contracts should be awarded to others who do. Our company is a government contractor and we find this practice unacceptable. Maybe its time to post a list of government contractors who are opposed to paying an equal minimum wage so that when future contracts are being awarded this stance may be taken into consideration.

  11. Justin Tresolini says:

    My agency has a commuity employment program and a sheltered workshop. I have worked in the community employment program for almost 20 years and see both sides of this complicated issue. The fact is that every employment program in the Lehigh Valley could not find jobs even for every student transitioning from school to work. That is not even counting people with disabilities long out of school who are seeking employment in the community. Our workshop and others at least provide some opportunity for indivduals with disabilities to be productive. Our workshop tries to be innovative and has begun manufacturing items so that the individuals here can earn a wage that is not subminimum. I dispute the notion, at least with respect to our workshop, that the indivduals are akin to slaves. Each has the opportunity, if he or she chooses, to obtain employment in the community or, if he or she chooses choose, to remain in the workshop.

  12. John Johnson says:

    The logic of subminimum wage completely escapes me. No one can defensibly argue that subminimum wage for persons with disabilities is a) not discriminatory since it only applies to persons with disabilities or b) that it is a substantial barrier and disincentive for disabilities to achieve adequate minimum compensation and benefits. In the meantime, these same “professionals” arguing in favor of DOL certificates advocate in favor of removal of SSI work disincentives. For those I would suggest an examination of their critical thinking skills. Claiming to promote and advocate for the full inclusion, self-determination, independence and productivity of persons with disabilities on one hand and then arguing the only way for some people with disabilities to get jobs is via subminimum wage is simply illogical, We need to rexamine the worth and value of the contribution that any human being can offer within their maximum capabilities…Oh, sorry I forgot, profit supersedes the value and worth of the person contributing to their job. Anyway, this argument is sooooo old and such a poor excuse for supporting the institutionalized poverty of persons with disabilities that as I have gotten older, I realized that the primary advocates of this archaic policy are people WITHOUT disabilities who have more to lose than persons with disabilities. Time to move on and eliminate the DOL certificates. It’s way past its shelf-life and no one can argue that it is a disincentive for employers to hire persons with disabilities for a decent living wage and benefits. Lastly, “the only jobs available to people with disabilities”…if that isn’t a profound reflection on the current attitudes towards the employment of persons with disabilities that dominates the organizations supporting subminimum wage. What profoundly low expectations for the capabilities of persons with disabilities and lack of commitment to improving employment opportunities for people with disabilities.

  13. JRJ says:

    I’ve been thinking of analogies for the DOL sub-minimum wage certificates so here goes.
    -> Subminimum wage is like a fish. The longer it stays on the shelf, the less desirable it becomes.
    -> DOL subminimum wage certificates are like public pay restrooms. They are smelly, dirty and embarrassing, and when you really, really need one, it’s a huge relief to find one you don’t have to pay to use.
    -> Is a DOL certificate a placebo for a real wage?
    -> Subminimum wage is like getting raped and robbed by a moose. The sex sucks and you’re broke afterwards.

  14. tim bennett says:

    to mr c thomas woods franklin roosevelt was wrong to sign section 14c into law back in 1938 goodwill industries and other sheltered work shops are allowed to pay slave wages the sub minimum wage certificate needs to be done away vocational rehabilitation wanted to me 6 more weeks at goodwill i said no i’m not able to work due to health problems i have type 2 diabetes back problems i have to take insulin at night 18 to 20 units at bedtime goodwill industries do not work for them it’s modern day slavery and a sweatshop $1.00/hour come on goodwill art gible ceo of goodwill industries of north west north carolina made $1,397,405.00 in 2012 it goes to show goodwill treats their disabled workers as 2nd class citizens it’s wrong shame on you goodwill industries and other sweatshops

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