Section 14(c) of the Fair Labor Standards Act: 100 Percent Wrong

Blog Date: 
Thursday, January 9, 2014

By Anil Lewis

In a recent article, "Goodwill faces criticism over pay for disabled workers," PolitiFact Georgia attempts to evaluate the truthfulness of the National Federation of the Blind’s claims in our call for the repeal of Section 14(c) of the Fair Labor Standards Act (FLSA), a provision that allows employers, like Goodwill Industries, to obtain a Special Wage Certificate from the U.S. Department of Labor that allows them to legally pay workers with disabilities less than the federal minimum wage.  Our claim is that the use of subminimum wage payments to workers with disabilities is unfair, discriminatory, and immoral, and we are fighting to end the unreasonable practice of excluding people with disabilities from being guaranteed the federal minimum wage. After their rudimentary investigation, PolitiFact Georgia concludes that our claim is half true.

PolitiFact Georgia rated our claim as half true based on the following statements obtained from Goodwill representatives. “More than thirty percent of the 700 Goodwill employees in the Savannah region are disabled, a spokeswoman said. The region does hold a 14(c) certificate but doesn’t use it, and the lowest hourly wage offered employees in the region is $7.75 an hour.” The National Federation of the Blind obtained the wage information of the Savannah Regional Goodwill from the U.S. Department of Labor Wage and Hour Division through a FOIA request. These records show a number of employees in the Goodwill Savannah Region being paid as little as $1.44 per hour. So our investigation rates the Goodwill claim 100 percent false. If the Savannah Goodwill has subsequently discontinued this practice, it is due to the public awareness and advocacy efforts of the National Federation of the Blind.

The article further states that, “There are no workers paid below minimum wage at stores or offices in the Macon region…The region possesses the 14(c) Special Wage Certificate but doesn’t use it.” Goodwill Savannah’s false assertion makes their claim suspect. The only way to be sure that these entities will not choose to pay their workers with disabilities less than the federal minimum wage is for them to surrender their Section 14(c ) Special Wage Certificate.

Goodwill International states that 101 of their affiliates operate successfully without paying subminimum wages to their workers with disabilities. However, rather than adopting a policy to require the other sixty-four affiliates to operate in a similar fashion, the Goodwill International representatives state that it is a local decision for these affiliates to pay their workers with disabilities subminimum wages, and they support this choice.

Section 14(c) is unfair. If it were fair, it would apply to every employee, including the managers and executives. No other Goodwill employees are willing to work at subminimum wages, nor will they consent to being paid based on the flawed commensurate wage formula used to determine the wages paid to the workers with disabilities.

Section 14(c) is discriminatory. It applies specifically to workers with disabilities, discriminating based on the characteristic of disability, and falsely assuming that workers are less productive because they have disabilities.  

Section 14(c) is immoral. These section 14(c) “employers” are peddling their segregated subminimum wage environments as a compassionate offering of employment opportunities to the less fortunate, while their colleagues are offering real wages to workers with disabilities.  The practice of executives paying themselves six-figure salaries, while profiting on the backs of individuals with disabilities they choose to pay pennies per hour, is immoral.

Therefore, our claim that Goodwill International supports the use of an unfair, discriminatory, and immoral provision that allows them to pay their workers with disabilities less than the federal minimum wage is 100 percent true.

Thankfully, more and more Goodwills across the country are making the decision to transition to business models that do not use the special “subminimum” wage certificates as a result of our public awareness and advocacy efforts. If the Goodwill affiliates in the Macon and Savannah regions are truly converting to this proven model, they should just surrender the special wage certificates and discontinue the use of subminimum wages like their sister affiliates in the Atlanta and Columbus regions. However, as long as it is legal, there will be those that choose to exploit this provision.

The Fair Wages for Workers with Disabilities Act of 2013, HR 831, will end this exploitation by responsibly phasing out and eventually repealing Section 14(c) of the Fair Labor Standards Act. As a result, individuals with the most significant disabilities will no longer be trapped in segregated subminimum wage workshops. Entities will have three years to transition to a proven competitive integrated training and employment business model that assists individuals with significant disabilities in obtaining real jobs at real wages. The Goodwill affiliates opposing the adoption of this proven model only demonstrate their lack of expertise in the field of employment of people with disabilities, their inability to be competitive with similarly situated organizations, and their unwillingness to truly meet the true calling of their charitable status. Regardless of whether or not PolitiFact Georgia feels our claims are half true, Section 14(c) is 100 percent wrong.