(Updated: June 13, 2013 at 12:24 PM CT)

The U.S. Department of Justice is cracking down after an investigation found that students with disabilities were unnecessarily segregated and forced to work for little or no pay for years in violation of the Americans with Disabilities Act.

In a 17-page letter sent to local officials in Providence, R.I. this month, the Justice Department’s Civil Rights Division said that students with developmental disabilities were paid 50 cents to $2 per hour, and in some cases nothing at all, to do tasks like bagging, labeling, collating and assembling jewelry. They did the tasks as part of a sheltered workshop while participating in a vocational program at Mount Pleasant High School.

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Records for the workshop were poor and wages did not correlate to the jobs students performed or how productive they were, federal investigators found. In addition to school days, the workshop sometimes operated on weekends and at least one student said she was required to spend all day there at times in order to meet production deadlines.

Meanwhile, students were not offered opportunities to try competitive employment placements even when they requested to do so. And, once the students left high school, they were then funneled to segregated, sheltered workshops, the Justice Department found.

Nearly all high school-age students with intellectual and developmental disabilities in the Providence Public School District are part of the vocational program, federal officials indicated.

The report said that the city “planned, structured, administered and funded its transition service in a manner that imposes a serious risk of unnecessary segregation” in violation of the ADA. Moreover, the investigation found that the city developed and maintained a “direct pipeline” to a third-party provider of sheltered workshops and facility-based day services where students were directed once they finished school.

Providence Mayor Angel Taveras told the local television station WPRI that he was not familiar with the sheltered workshop until learning about the federal investigation earlier this year. He called the Justice Department findings “outrageous,” adding that the students “deserve better.”

The sheltered workshop has been shut down as a result of the investigation and under a settlement reached with the city and state, federal officials said Thursday that individuals who were directed to segregated placements after attending the vocational program will now be provided with supported employment services to “find, get, keep and succeed in real jobs with real wages.” Current students will be provided transition services with internships, trial work experiences and other offerings so that they can ultimately move into community-based jobs when they leave school.

Under the agreement, individuals with disabilities will work in supported employment for at least 20 hours per week, on average. When they are not working, they will be provided access to integrated, community-based recreational, social, educational, cultural and athletic activities, federal officials said.

The plan calls for those with disabilities to be supported with a 40-hour work week, according to Eve Hill, senior counselor to the assistant attorney general for civil rights. The agreement is the first between the Justice Department and any public entity to ensure what Hill called a “full-time integration” standard.

“For far too long, people with disabilities who can and want to work and engage in all aspects of community life have been underestimated by public service systems that have had limited or no expectations for them. Under this agreement, things are now changing,” Hill said.