Senators Call For End To Subminimum Wage Amid Accusations Of Exploitation
Subminimum wages for workers with disabilities came under fire this week as a group of U.S. senators called for an end to the “discriminatory” practice and an Illinois manufacturing company was accused of exploiting nearly 250 employees.
Lawmakers sent a five-page letter to the U.S. Department of Labor on April 23, the same day that the department announced that Rock River Valley Self Help Enterprises had violated federal employment law and owed two years’ worth of back pay to workers who earned less than minimum wage.
Seven Democratic senators, including Elizabeth Warren of Massachusetts and Tammy Duckworth of Illinois, wrote that the lower pay “permits employers to discriminate against workers on the basis of disability status and unjustifiably sets low expectations for workers with disabilities.”
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The lawmakers called for a phasing out of so-called “Section 14(c)” jobs where employers, under the Fair Labor Standards Act, apply for certificates that allow them to pay people with disabilities less than minimum wage. Subminimum wages are based on the productivity of a person with a disability compared to someone without a disability. For instance, the letter noted that Goodwill Enterprises had paid some workers as little as 22 cents an hour.
The senators requested information on how many workers with disabilities across the country are employed under 14(c) certificates and how much they earn. As of Thursday, the Department of Labor had not responded to the letter, Duckworth’s office said.
In the Self Help investigation in Sterling, Ill., federal officials revoked the nonprofit’s certificate and said the group had failed to conduct proper time studies of jobs in order to calculate wages and had sometimes unlawfully paid workers with gift cards.
“The Department of Labor is committed to protecting Americans with disabilities from exploitation in the workplace,” Ruben Rosalez, acting regional administrator for the agency, said. “When employers violate federal law and obstruct investigators, we take decisive action to protect vulnerable workers, their families and other employers who play by the rules.”
The department said Self Help must pay all current workers at least the full federal minimum wage of $7.25 per hour going forward and pay back wages.
Self Help Executive Director Carla Haubrich issued a statement saying the organization had served the “developmentally disabled workforce” for 54 years.
“We are obviously disappointed in the decision made by the United States Department of Labor, disagreeing with this outcome, but will take all necessary steps to comply with the decision as we pursue our available options to have the matter duly reviewed,” the statement said.
According to the National Council on Disability, an independent federal agency, subminimum wage programs are primarily operated by nonprofit or state-run social service providers rather than private businesses. The programs are also ineffective at transitioning employees into the general workforce, the agency said.
But other advocates and families say that jobs that pay less than minimum wage play an important role, especially for those with the most severe disabilities, by fostering self-esteem and productivity.