Opinions Divided on Subminimum Wage

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Donte Harris at Miller’s Minuteman Press

Advocates and employers of disabled individuals are divided on a section of federal law that allows certified agencies to employ those with disabilities below minimum wage. Some want the program phased out, some would like to see increased oversight and program improvements, while others simply want the issue studied further.

The Fair Labor Standards Act, which Congress passed in 1938, included section 14(c), which allows employers to pay wages that may be below the federal minimum to those who have disabilities that impair their productive capacity. Employers must hold 14(c) certificates to take part in this program, and there are 47 such employers in Maryland, according to the U.S. Department of Labor Statistics.


At a December meeting, the Baltimore Jewish Council passed a policy statement calling for a task force to study the issue.

“The Baltimore Jewish Council (BJC) urges renewed consideration of Maryland policies, practices and implementation of section 14(c) of the Fair Labor Standards Act (FLSA), also known as the subminimum wage. BJC recognizes that there may be unintended consequences that may be involved in any changes to the current law,” the statement says. “We recommend formulation of a comprehensive solution that ensures the best outcomes for those who would be affected by the law’s application in Maryland. We call for the establishment of a broadly represented statewide task force to study the issue in a timely fashion.”

In October, the BJC held a forum on the issue that included representatives of the National Federation of the Blind, the Maryland Disability Law Center, Arc of Maryland as well as 14(c) certificate holders Arc of Baltimore and Chimes.

Cailey Locklair Tolle, deputy executive director of the Baltimore Jewish Council, said the BJC wanted to hear all sides of the issue, and especially hear from someone who uses a 14(c) certificate and could explain possible complications from completely eliminating subminimum wage.

“Although we certainly advocate on behalf of the community that has disabilities … we aren’t experts on the issue, and they have eliminated subminimum wage in some states and there were a lot of concerns around that,” Tolle said. “We want to see all the stakeholders on the issue come together and then collectively make a decision.”

14(c) doesn’t specifically authorize subminimum wages, it authorizes commensurate wages, which are calculated based on the prevailing wage in a particular job in a geographic area and a “productivity percentage,” the percentage of work a disabled worker gets done compared to that of a non-disabled worker. While commensurate wages can be above minimum wage, they can also be below.

In early 2015, advocates expect the TIME Act — Transitioning to Integrated and Meaningful Employment Act — to be introduced in Congress. It will be a reintroduction of H.R. 831, formally known as the Fair Wages for Workers with Disabilities, under a new name. It is sponsored by Rep. Gregg Harper, a Mississippi Republican, whose son suffers from Fragile X syndrome, a genetic condition involving changes of the X-chromosome that result in intellectual disabilities in males.

Rose Sloan, a government affairs specialist at the National Federation of the Blind, advocates for the bill, which she said would phase out the 14(c) certificates over a period of three years. After one year, for-profit entities would no longer be able to use their certificates, public and governmental organizations after two years and nonprofits after three years. She said about 95 percent of the roughly 3,000 certificates belong to nonprofits.

She and her organization would like to see more real-world job training for disabled people, something she feels a lot of nonprofits have a moral responsibility to do with or without at 14(c) certificate.

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Kelly Hughes at Cardinal Health

“The National Federation of the Blind feels that the payment of subminimum wages is an antiquated, discriminatory and immoral practice,” Sloan said. “You cannot pay them less because they are not less; they are not second class or third class.”

But a study conducted by The George Washington University’s School of Public Health and Health Services said “no action should be taken toward the program’s elimination” and said “14(c) is a necessary, although less than optimal, component in the employment of individuals with disabilities.” The study, published in June 2013, concluded that further data needed to be gathered by relevant agencies to judge whether or not to eliminate 14(c).

“Undoubtedly, there are workers with disabilities in the 14(c) program who receive benefits that allow them to be productive and achieve economic self-sufficiency, both in integrated and sheltered settings,” the study said. “However, the lack of accountability and oversight from the Department of Labor makes it difficult to demonstrate the true effectiveness of the program. At minimum, [DOL] should improve oversight of section 14(c).”

Nancy Pineles, a managing attorney in the Maryland Disability Law Center’s developmental disabilities unit, said her organization has not taken a position on 14(c) action, but would like to see improvements, particularly in the area of “sheltered workshops” and non-integrated programs. These workshops are where many advocates say the lowest wages can be found, where disabled workers are sometimes not integrated with non-disabled workers and spend their time working on menial tasks.

“We’d like to see people … with disabilities out of facility-based programs,” Pineles said. “We want people to get out and find real jobs.” Part of that is changing the employment community, she said.

“The employment community needs to be more receptive to hiring people with disabilities, and the employers may need some kind of support as well in understanding how to work with people with disabilities,” she said, noting that there is some support at the state level that could be stepped up.

Stephen Morgan, executive director at Arc of Baltimore, co-chairs the Arc of Maryland’s Fair Wages Work Group, which is studying 14(c), in particular the eight of Maryland’s 10 Arc chapters that hold certificates as well as what has happened in states that have eliminated 14(c) programs. The group has yet to make recommendations, but wants to avoid any precipitous federal action and doesn’t think there needs to be any state-level action at this point, something a lot of advocates agree with.

“We don’t want any action — executive order or legislation — that would serve to reduce any individual’s participation in employment,” Morgan said. “What we’d rather do is [find if] there is some action that can in fact increase their wages, increase their participation in employment so we can accomplish the end result of reducing subminimum wage payments while not taking opportunities away from people.”

About 12 percent of the Arc of Baltimore’s 1,000 adult participants in its day employment program are in “individual competitive jobs” which include filing and document management at law firms and general office work, jobs at the University of Maryland Medical Center, library jobs, shipping and receiving, grocery baggers, car prep at dealerships, landscaping and janitorial work. There are two other programs the Arc runs, Project Search and Career Catalyst, that work with the disabled population that is almost done with school and those who have been out of school for a number of years with career preparation and job placement.

Chimes Maryland, the state’s largest not-for-profit provider of services for individuals with intellectual and developmental disabilities, employs 1,200 people with disabilities in Maryland, according to Martin Lampner, president/CEO of Chimes International. Of those, less than 250 people are in workshops earning $.32 or more, about 300 earn $3 to $7.24 and about 650 earn up to $11 an hour. Some work includes janitorial work at BWI Airport as well as work at Chimes-run food carryout services, the mission of which, Lampner said, is to get people experience that will transfer to jobs at Baltimore-area restaurants.

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Aimee Eliason, at Miller’s Minuteman Press

Because Chimes works with a population that can be severely disabled, the organization would like to see better enforcement of the Americans with Disabilities Act (ADA), which would ensure “reasonable accommodations” for those with disabilities in the job market, as well as further study of the 14(c) program. Lampner’s concern with eliminating 14(c) is that those with disabilities, particularly severe and cognitive disabilities, would lose access to employment.

“When reasonable accommodation is not feasible, the best alternatives are either a better-enforced 14(c) or adoption of new regulations and initiatives to ensure that people with the most significant disabilities — who still want to work — have the right to work and an environment wherein they can gain the dignity that comes from the work,” Lampner said via email.

Morgan reiterated that this long-contested issue does not have an easy solution.

“If there’s any preliminary recommendation from the work group, it’s almost that we’re drawing a line in the sand,” he said. “We don’t want anybody to go backwards, we want to go forwards.”

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1 COMMENT

  1. Retaining the 14(c) laws are critical to the continued employment of developmentally disabled workers. There are two distinct groups of disabled people–the physically disabled and the mentally, that is, developmentally disabled. The needs of the two groups are drastically different. A person with a physical disability needs only the proper accommodation and a supportive employer to work at almost any job. A person with a developmental disability (a DD adult) often needs far more. Some DD adults can hold a regular job with the support of a job coach (although in reality, many of these jobs are for only a few hours a week). However, depending on the level of disability, they may need eyes-on supervision and work that is tailored to their ability. While a task might seem menial to you or me, it can be fulfilling, challenging, and enjoyable to a person like my son who has a significant developmental disability. A well-run group employment center is a wonderful place to work, with staff hired for their compassion and dedication and workers who enjoy each others company as they work side by side on tasks they understand and recognize as work for which they are paid. Even if he could be working at a “regular” job in the community, my son would feel very isolated. Can you imagine the isolation of being the one DD adult in a building, walking by with your bucket and mop, while other people are busy tapping away on keyboards doing tasks that you find completely incomprehensible? Maybe they’ll all be real nice to you, but that’s not the same as the complete acceptance of a group of peers. But these centers are only made possible by the 14(c) wages. My son makes about 4$ an hour, working at his slow but steady pace. Others make more and some make less. The non-profit center where he works has even has successfully bid on federal maintenance contracts, where 7 or 8 DD adults go out to places like the VA and do grounds maintenance. The center has to competitively bid for these jobs against firms that can do the same work with only 2 or 3 employees. The center can do so because they can pay their workers according to their productivity. (Thanks to the well-meaning but misguided interference of the Obama administration, the center will now lose these contracts because Obama ended the 14(c) exception on federal contracts, putting many hundreds of DD adults out of work all over the nation.) The reality is this: many DD adults, unlike the physically disabled, need the 14(c) exception in order to compete for jobs against non-DD workers. No one will hire a person who works at half speed at simple tasks and needs supervision if they can hire a person who can do many tasks at full speed and needs no supervision. Everyone wants to see DD adults who CAN successfully work out in the community doing so at regular jobs for regular wages. But we need the 14(c) clause for our other DD adults who want to work yet need the support of a group employment center.

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