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Current Events & Hot Topics Current Events & Hot Topics

Disabled and Employed? The Gov't Says it's Legal to Pay You Pennies on the Dollar..

Posted by on Jun. 21, 2013 at 10:34 AM
JRM
  • 17 Replies
1 mom liked this

Some disabled workers paid just pennies an hour – and it's legal

Critics cry exploitation as a federal loophole allows companies to pay thousands of disabled workers across the country far less than the minimum wage. Harry Smith's full report airs Friday, June 21 at 10pm/9CDT on NBC's Rock Center with Brian Williams.

By Anna Schecter, Producer, NBC News

One of the nation's best-known charities is paying disabled workers as little as 22 cents an hour, thanks to a 75-year-old legal loophole that critics say needs to be closed.

Goodwill Industries, a multibillion-dollar company whose executives make six-figure salaries, is among the nonprofit groups permitted to pay thousands of disabled workers far less than minimum wage because of a federal law known as Section 14 (c). Labor Department records show that some Goodwill workers in Pennsylvania earned wages as low as 22, 38 and 41 cents per hour in 2011.

"If they really do pay the CEO of Goodwill three-quarters of a million dollars, they certainly can pay me more than they're paying," said Harold Leigland, who is legally blind and hangs clothes at a Goodwill in Great Falls, Montana for less than minimum wage.

"It's a question of civil rights," added his wife, Sheila, blind from birth, who quit her job at the same Goodwill store when her already low wage was cut further. "I feel like a second-class citizen. And I hate it."

Section 14 (c) of the Fair Labor Standards Act, which was passed in 1938, allows employers to obtain special minimum wage certificates from the Department of Labor. The certificates give employers the right to pay disabled workers according to their abilities, with no bottom limit to the wage.

Most, but not all, special wage certificates are held by nonprofit organizations like Goodwill that then set up their own so-called "sheltered workshops" for disabled employees, where employees typically perform manual tasks like hanging clothes.

For more on disabled workers and sub-minimum-wage pay watch 'Rock Center' tonight.

The non-profit certificate holders can also place employees in outside, for-profit workplaces including restaurants, retail stores, hospitals and even Internal Revenue Service centers. Between the sheltered workshops and the outside businesses, more than 216,000 workers are eligible to earn less than minimum wage because of Section 14 (c), though many end up earning the full federal minimum wage of $7.25.

NBC News

Harold Leigland, who is blind, with his guide dog on the bus during his morning commute to the Goodwill facility in Great Falls, Montana, where he works hanging clothing.

When a non-profit provides Section 14 (c) workers to an outside business, it sets the salary and pays the wages. For example, the Helen Keller National Center, a New York school for the blind and deaf, has a special wage certificate and has placed students in a Westbury, N.Y., Applebee's franchise. The employees' pay ranged from $3.97 per hour to $5.96 per hour in 2010. The franchise told NBC News it has also hired workers at minimum wage from Helen Keller. A spokesperson for Applebee's declined to comment on Section 14 (c).

Helen Keller also placed several students at a Barnes & Noble bookstore in Manhasset, N.Y., in 2010, where they earned $3.80 and $4.85 an hour. A Barnes & Noble spokeswoman defended the Section 14 (c) program as providing jobs to "people who would otherwise not have [the opportunity to work]."

Most Section 14 (c) workers are employed directly by nonprofits. In 2001, the most recent year for which numbers are available, the GAO estimated that more than 90 percent of Section 14 (c) workers were employed at nonprofit work centers.

Critics of Section 14 (c) have focused much of their ire on the nonprofits, where wages can be just pennies an hour even as some of the groups receive funding from the government. At one workplace in Florida run by a nonprofit, some employees earned one cent per hour in 2011.

"People are profiting from exploiting disabled workers," said Ari Ne'eman, president of the Autistic Self Advocacy Network. "It is clearly and unquestionably exploitation."

Defenders of Section 14 (c) say that without it, disabled workers would have few options. A Department of Labor spokesperson said in a statement to NBC News that Section 14 (c) "provides workers with disabilities the opportunity to be given meaningful work and receive an income."

Terry Farmer, CEO of ACCSES, a trade group that calls itself the "voice of disability service providers," said scrapping the provision could "force [disabled workers] to stay at home," enter rehabilitation, "or otherwise engage in unproductive and unsatisfactory activities."

Harold Leigland, however, said he feels that Goodwill can pay him a low wage because the company knows he has few other places to go. "We are trapped," he said. "Everybody who works at Goodwill is trapped."

Leigland, a 66-year-old former massage therapist with a college degree, currently earns $5.46 per hour in Great Falls.

His wages have risen and fallen based on "time studies," the method nonprofits use to calculate the salaries of Section 14 (c) workers. Staff members use a stopwatch to determine how long it takes a disabled worker to complete a task. That time is compared with how long it would take a person without a disability to do the same task. The nonprofit then uses a formula to calculate a salary, which may be equal to or less than minimum wage. The tests are repeated every six months.

NBC News

Harold Leigland works at the Goodwill facility in Great Falls, Montana, where he earns $5.46 an hour.

Leigland's pay has been higher than $5.46, but it has also dropped down to $4.37 per hour, based on the time-study results.
He said he believes Goodwill makes the time studies harder when they want his wage to be lower.

"Sometimes the test is easier than others. It depends on if, as near as I can figure, they want your wage to go up or down. It's that simple," he said.

His wife, Sheila, 58, spent four years hanging clothes at the Great Falls Goodwill for about $3.50 an hour. She said the time study was one of the most degrading and stressful parts about her job. "You never know how it's going to come out. It stressed me out a lot," she said.

She quit last summer when she returned to work after knee surgery and found that her wage had been lowered to $2.75 per hour, a training rate.

"At $2.75 it would barely cover my cost of getting to work. I wouldn't make any money," she said.

Harold said he believes Goodwill can afford to pay him minimum wage, based on the salaries paid to Goodwill executives. While according to the company's own figures about 4,000 of the 30,000 disabled workers Goodwill employs at 69 franchises are currently paid below minimum wage, salaries for the CEOs of those franchises that hold special minimum wage certificates totaled almost $20 million in 2011.

In 2011 the CEO of Goodwill Industries of Southern California took home $1.1 million in salary and deferred compensation. His counterpart in Portland, Oregon, made more than $500,000. Salaries for CEOs of the roughly 150 Goodwill franchises across America total more than $30 million.

Goodwill International CEO Jim Gibbons, who was awarded $729,000 in salary and deferred compensation in 2011, defended the executive pay.

"These leaders are having a great impact in terms of new solutions, in terms of innovation, and in terms of job creation," he said.

Gibbons also defended time studies, and the whole Section 14 (c) approach. He said that for many people who make less than minimum wage, the experience of work is more important than the pay.

"It's typically not about their livelihood. It's about their fulfillment. It's about being a part of something. And it's probably a small part of their overall program," he said.

Read Goodwill's full statement

And Goodwill and the organizations that run the sheltered workshops are not alone in their support for Section 14 (c). In many cases, the families of the workers who have severe disabilities say their loved ones enjoy the work experience, enjoy getting a paycheck, and the amount is of no consequence.

NBC News

Sheila Leigland, who is blind, with her guide dog. She quit her job at Goodwill in Great Falls, Montana, after her hourly wage was lowered to $2.75.

"I feel really good about it. I don't have to worry so much about him," said Fran Davidson, whose son Jeremy has worked at Goodwill in Great Falls, Montana, for more than a decade. "I know he's not getting picked on, and he's in a safe place. He enjoys what he's doing, and he's happy, and that's what we like for our kids." Jeremy started out working for a sub-minimum wage but did well on his last time study and is currently earning $7.80 an hour, Montana's minimum wage.

But foes of Section 14 (c) have hopes for a new bill that's now before Congress that would repeal Section 14 (c) and make sub-minimum wages illegal across the board.

"Meaningful work deserves fair pay," the sponsor of the bill, Rep. Gregg Harper, R.-Miss., told NBC News. "This dated provision unjustly prohibits workers with disabilities from reaching their full potential."

The bill is opposed by trade associations for the employers of the disabled, and past attempts to change the law have failed. But Marc Maurer, president of the National Federation of the Blind and a foe of the sheltered workshop system, is cautiously optimistic that this time the bill will pass, and end what he called a "two-tiered system."

That system, explained Maurer, says "'Americans who have disabilities aren't as valuable as other people,' and that's wrong. These folks have value. We should recognize that value."

Monica Alba contributed to this report.

....I am only responsible for what I say,NOT for what you understand.....
by on Jun. 21, 2013 at 10:34 AM
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Replies (1-10):
SuperChicken
by on Jun. 21, 2013 at 10:41 AM
1 mom liked this

This is really disgusting.  Trying to justify it by saying that you pay someone a pittance because they wouldn't be able to get work elsewhere makes my blood boil.   It's taking advantage of the most vulnerable in our society for no reason other than greed.

 

JoshRachelsMAMA
by JRM on Jun. 21, 2013 at 10:45 AM

Agreed. What's even more disgusting is that this is written into the law. It should be repealed immediately.

Quoting SuperChicken:

This is really disgusting.  Trying to justify it by saying that you pay someone a pittance because they wouldn't be able to get work elsewhere makes my blood boil.   It's taking advantage of the most vulnerable in our society for no reason other than greed.



....I am only responsible for what I say,NOT for what you understand.....
parentalrights1
by on Jun. 21, 2013 at 10:47 AM
2 moms liked this
People want businesses to be able to pay as low as they want because its "theirs" but they shouldn't be sitting there making money off the backs of others helping them bring in the profit and paying slave wages
candlegal
by Judy on Jun. 21, 2013 at 10:50 AM

This is rather disgusting but I am curious as to whether or not these people get Social Security Disability pay.

JoshRachelsMAMA
by JRM on Jun. 21, 2013 at 10:53 AM

I would garner to think so. If that is the case, then they can only work a certain amount of hours per week (I think).

Still, even with receiving SSI, it's exploitative, IMO.

Quoting candlegal:

This is rather disgusting but I am curious as to whether or not these people get Social Security Disability pay.


....I am only responsible for what I say,NOT for what you understand.....
candlegal
by Judy on Jun. 21, 2013 at 10:54 AM
1 mom liked this

I agree

Quoting JoshRachelsMAMA:

I would garner to think so. If that is the case, then they can only work a certain amount of hours per week (I think).

Still, even with receiving SSI, it's exploitative, IMO.

Quoting candlegal:

This is rather disgusting but I am curious as to whether or not these people get Social Security Disability pay.



meriana
by Platinum Member on Jun. 21, 2013 at 11:08 AM
2 moms liked this

Gibbons also defended time studies, and the whole Section 14 (c) approach. He said that for many people who make less than minimum wage, the experience of work is more important than the pay."It's typically not about their livelihood. It's about their fulfillment. It's about being a part of something. And it's probably a small part of their overall program," he said.

Sure because the amount of their pay has no impact on their ability to support themselves and maybe be able to do more than pay the rent and put food on the table. One can only imagine what he would say if he was told that his pay was going to be minimum wage because it's really all about the experience of having a job, fulfillment and being a part of something.

"These leaders are having a great impact in terms of new solutions, in terms of innovation, and in terms of job creation," he said

I'm so tired of these people thinking they're so wonderful because they employ people at as small a wage as they can legally get away with while they themselves demand and receive millions.

As for SSI, what most receive isn't much when it comes to the cost of living.

armywifey1983
by Bronze Member on Jun. 21, 2013 at 12:36 PM
My jaw kept creeping closer to the floor as I read the article. I have NEVER been paid less than someone else in my exact position at work. I had no idea this travesty was legal, because you would think the ADA would be all up in that. Why has this been allowed to continue?!
EireLass
by Ruby Member on Jun. 21, 2013 at 1:16 PM

Through the entire article it keeps repeating "disabled". That makees me think that they are 'legally disabled'....which means they are collecting SSDI. If that number is too low, they are also collecting SSI. After that, you are allowed to make a certain amount each month. If they are allowed to make $400/month, they could either work 10 hours at $10 or 20 hours at $5.

mcknitro
by Member on Jun. 21, 2013 at 1:28 PM
I think it's disgusting, especially when someone is making millions. Hope the CEO of goodwill is proud of himself, while he lavishes, disabled people are struggling. GOOD FOR HIM!!! I'm glad my uncle who is blind found an awesome wife who makes good money in the medical field and has allowed him to be a stay at home dad.
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