Braille Monitor                                             October 2014

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Minimum Wage Guarantees for Disabled Workers—A Report from the Department of Justice

by Eve L. Hill

Eve L. HillFrom the Editor: Eve Hill is well known to those who attend the convention or read accounts of it in this magazine. She has worked for the law firm of Brown, Goldstein and Levy, as the director of the Office for Disability Rights for the District of Columbia, as the senior vice president for the Burton Blatt Institute, and now for the United States Department of Justice. One of the reasons she is a regular fixture on our convention agenda is that she always has something of interest to say. Here is what she said on the morning of July 6, 2014:

I'm so happy to be here, back at the National Federation of the Blind. Thank you for having me. It's a little intimidating seeing you all out here, but I'm going to try and be calm.

On February 12, 2014, President Obama issued Executive Order 13658, establishing a minimum wage for contractors. The executive order generally raises the minimum for certain federal service contractors and subcontractors to $10.10 an hour beginning January 1, 2015. The purpose of the executive order was to increase the morale of employees and in turn increase their productivity and efficiency. And whose pay and morale are most likely to be increased by this? People who are blind and have other disabilities, because their pay is now lower than anyone else's.

So what does the executive order mean to people with disabilities? The executive order specifically says that covered federal contractors who have special minimum wage certificates under Section 14(c) of the Fair Labor Standards Act must comply with the executive order. Now, as you all know, Section 14(c) of the Fair Labor Standards Act allows employers to pay wages below the prevailing wage and below the minimum wage to workers with disabilities. Section 14(c) can be used by federal contractor employers and nonfederal contractor employers. Many of the employers who take advantage of Section 14(c) are segregated sheltered workshops, and 20 percent of them are federal contractors who participate in the AbilityOne program, which gives them a contracting preference if their worker population is 75 percent people with disabilities. So, not only are they relatively segregated, but they also get the benefit of paying below minimum wage. And once an AbilityOne employer is approved and its services are placed on the procurement list, that contract is often renewed automatically.

The executive order does not change the Fair Labor Standards Act itself, because that would require legislation, so these AbilityOne employers can still pay workers with disabilities a percentage of the prevailing wage, which is usually for service contracts set by the Service Contracts Act and the Department of Labor. They're mostly higher than the federal minimum wage and often already higher than $10.10, but, because of the interplay of 14(c), those contractors have, until now, been able to pay below $10.10 and even below the minimum wage. But under the executive order, employers under new covered-service contracts, including AbilityOne employers, must pay their workers, including workers with disabilities, at least $10.10—$10.10 becomes the floor.

About fifty thousand people with disabilities under AbilityOne contracts currently make below the minimum wage. Most of those, however, work on product contracts, which aren't covered by the executive order. So, according to the Office of Management and Budget, the vast majority of people with disabilities working on service contracts already make $10.10 an hour. But, if it applied to current contracts now, the executive order would apply to thousands of people with disabilities who are currently working on AbilityOne service contracts and currently making less than $10.10 an hour, and even less than minimum wage.

The executive order applies only to service contracts by executive agencies, not independent agencies, but it strongly encourages independent agencies to comply as well, and it applies only to new contracts. It doesn't apply to contracts being applied outside the US, and it doesn't apply to federal grants.

So what's happening now? The executive order requires the Department of Labor to issue regulations by October of this year. On June 17 the Department of Labor published a notice of proposed rulemaking to implement the executive order. Comments from all of you—all of you and the rest of the public—are due by July 17. I can't say much about the rulemaking because it's not my rulemaking and because the process has started, so I'm not allowed to give a lot of information beyond what's in the notice of proposed rulemaking. I understand that Pat Shiu spoke about this from the Department of Labor already. I'm a little afraid that because of that limitation my presentation may be a little boring. So, if I start to get interesting, you'll know I've gone off script.

The NPRM would define a new contract covered by the executive order as one that results from a solicitation issued after January 1, 2015, or a contract that is awarded outside the solicitation process on or after January 5, 2015. This includes new contracts and replacements for expiring contracts, and under the NPRM the executive order would not apply to automatic renewals of contracts that were issued before January 2015.

What Dr. Maurer really asked me to talk about was how this fit and how this represents an evolution in federal policy. Both Section 14(c) and the AbilityOne program came from statute originally enacted in 1938. How many of us were around in 1938? Well, you may recall that the statutes were well before the enactment of the Rehabilitation Act of 1973 or the Americans with Disabilities Act of 1990. They were before reasonable accommodations were required of public and private employers. They were before Section 503 of the Rehabilitation Act required affirmative action by federal contractors to hire and retain people with disabilities. They were before the development and widespread implementation of supported employment services and supports. At the time of those statutes, people with disabilities were largely presumed unable to work in integrated competitive employment. At that time people with disabilities were assumed to have access to charity and public benefits sufficient to meet their needs, so why did they need wages? All I clearly disagree with.

But much of that has changed. The ADA now prohibits employers from discriminating against applicants on the basis of their disability and requires them to provide reasonable accommodations. Section 503 now requires affirmative action to hire and retain people with disabilities. Supported employment services have been recognized in the Developmental Disability Assistance and Bill of Rights Act of 1984 and are now widely available. People with disabilities have consistently demonstrated that they—we—are capable of working in integrated, competitive employment.

People with disabilities are unwilling to rely on charity and public benefits, but insist on making a real living and contributing to their families and communities. So the executive order is recognizing that people with disabilities work hard and that they need and deserve the same living wage as people without disabilities. [Applause] As I often say, we are not leprechauns; we do not have a pot of gold. If you can't live on less than $10.10 an hour, neither can we.

People with disabilities, like other employees, will improve their morale, their efficiency, and their productivity when they are paid fairly. The executive order is consistent with and builds on other federal policies that recognize that people with disabilities are capable of competitive integrated employment and are entitled to be free of discrimination, to be accommodated, and to be fairly paid for their work.

This is not the beginning of this federal recognition—it's been coming. In 2001 the Federal Rehabilitation Services Administration program eliminated permanent placement in sheltered workshops (or so-called extended employment in the agency's lingo) from the agency's list of services it will fund. The Rehabilitation Services Administration remains committed to supported employment in competitive integrated settings as an effective service for clients of state VR programs. The agency's regulations define supported employment for people with disabilities to mean competitive employment in integrated settings or employment in integrated work settings in which individuals are working toward competitive employment, consistent with their strengths, resources, priorities, concerns, abilities, capabilities, interests, and informed choice. Similarly, the Centers for Medicare and Medicaid Services, referred to as CMS, which oversees the Medicaid program providing long-term services and supports, has embraced supported employment services and declared that prevocational services provided in sheltered workshop settings should be time-limited and designed to lead to integrated employment. They cannot be services without placement. Their informational bulletin in 2001 said that "Medicaid community services funding is not available for the provision of vocational services delivered in facility-based or sheltered workshop settings where individuals are supervised for the primary purpose of producing goods or performing services. Those services should be designed to create a path for integrated community employment where the individual is compensated at or above the minimum wage, and no less than a customary wage or benefits shall be paid for similar work by individuals without disabilities."

The Department of Education has also recognized the importance of supplementary aids and services, including supported employment, as part of in-school transition services for youth, to enable students to work in integrated settings both while they're in school and after they are out of school, and it defines transition services to include supported employment. Even Congress is getting on the bandwagon and is considering restricting eligibility for subminimum wage work through the Workforce Innovation and Opportunity Act.

I'm sure that Dr. Maurer thought, when he asked me to speak about the subminimum wage, that would stop me from talking about all the great things DOJ is doing, but ha—it will not! This work also has a significant overlap with the Justice Department's Civil Rights Division's efforts in implementing the ADA's integration mandate, the Olmsted Mandate as we call it in the employment arena. Because many of the entities that employ people below minimum wage under 14(c) are segregated sheltered workshops. Olmsted requires that state services be provided in the most integrated setting appropriate for the individual, and that includes not just residential services, not just healthcare services, but employment services as well. So we recently reached a statewide settlement with Rhode Island to transform its day services program from one that relied primarily on segregated subminimum wage sheltered workshops and segregated day programs to one that relies on integrated competitive supported employment and integrated day services. We are also in litigation on the same issues in Oregon.

Now we have the additional benefit of Section 503 of the Rehabilitation Act. So we've been talking about the push, where we push people to provide the services people with disabilities need. Now we're on the pull side, where we want employers pulling to hire people with disabilities. Section 503 of the Rehabilitation Act has new regulations that require federal contractors to implement affirmative action programs to get over past discrimination, to hire people with disabilities, including a utilization goal in all job classifications to have 7 percent of their employees be people with disabilities. These regulations also require data collection so contractors can keep track of how well they are doing. We all know that what gets counted gets done.

I'm personally involved in three interagency groups that are working on increasing the integrated competitive employment of people with disabilities and particularly people with significant disabilities, who should not be left out of this. Like the executive order itself, these changes in federal policy are not just about justice—wouldn't it be nice if that was all that we needed. They are about the bottom line for business and for the country and for people with disabilities, and we're already seeing results on the business's bottom lines. Employers are looking for people with disabilities. Employers who have already been committed to inclusion are benefiting.

At a summit I was at just a week and a half ago on the employment of people with disabilities in Rhode Island, large, medium, and small businesses all made it clear that they believed their employees with disabilities contributed positively to their workplaces, not just through their productivity and doing a good job, but also through their reliability, their positive morale (many of these employers became a no whining zone), and even their accommodations, which often made the workplace more safe and efficient for everybody. As a result, from employers large, small, and medium, we heard over and over again their commitment to the same jobs, the same standards, at the same pay for their employees with disabilities. Even businesses are starting to notice that they've been contracting with sheltered workshops to do some of their work—sometimes as what they thought of as a good thing—their diversity in contracting programs. Then they shockingly found that those workshops were paying below the minimum wage to people with disabilities who can work and should be paid. So some of them are now considering demanding that all of their contractors and subcontractors pay at least the minimum wage. [Applause] Some are now hiring out of the workshops that they used to contract with and are choosing to do the jobs in-house at regular wages.

From a societal standpoint federal policy focusing on competitive integrated employment is also paying off. Studies keep showing that supported employment services offer a great return on investment. Supported employment services return an average of $1.46 for every dollar in taxpayer investment. People with learning disabilities return as much as $2.20 for every dollar. That is a fantastic return on investment; think about what it would be like if you invested in the stock market at that rate. And that's not counting the benefit to the workers with disabilities themselves, who make a great deal more money in competitive integrated employment than in sheltered workshops. That's buying power that they and their families can use to buy products and services from companies that hire people with disabilities.

But that benefit is more than money. Even though money is important—I like it—I have met several people in Rhode Island who used to work in sheltered workshops during the course of the last year and who now work in competitive integrated jobs. I've seen them each several times over the past year, and every time I've seen them, they've changed. One man, Stephen, who worked for about $2 an hour for thirty years, now works for minimum wage in an office and is taking computer classes. Just as important, he has come out of his shell and is a passionate, funny speaker, talking about employment of people with disabilities. And Pedro, who went straight from a school-based sheltered workshop—who knew this was still happening—to an adult sheltered workshop and earned $0.48 an hour. Now he works at a restaurant kitchen and was recently chosen as employee of the month. He doesn't use a job coach anymore. In fact he teaches his former job coaches how to teach others. Lewis used to make below minimum wage in the workshop. Now he works full-time in an office for more than minimum wage. He is a whiz at Excel, he drives to work every day (having gotten his license), he wears a necktie (which he hates), and he has decorated his office with Red Sox paraphernalia—he's a big fan, and I'm a Mainer [from Maine], so I'm with him—sorry Broncos and Seahawks. Different sport, but, seriously, all Boston. And when the Red Sox won the World Series, he bought his father and his uncle (also avid fans) championship t-shirts with his own money.

Since Peter left the workshop, he has a full-time job doing janitorial work—not a group of people with disabilities doing janitorial work after the office has closed—he does it as part of a group of people without disabilities. He makes above minimum wage and works full-time. He bought a car, took driving lessons, got his first parking ticket the last time I saw him (which he can pay), and has gotten engaged.

And then there is Orquedio, who goes by Q for obvious reasons. He made $2.85 an hour in the workshop. Now he works in an auto garage. His work and his accommodations showed his boss how to make the garage more efficient for everybody who works there. He takes two busses to work every day, he is always the first to arrive, and he arrives in snowstorms when nobody else makes it in. I saw him a week or so ago at the summit I was talking about, and when we first saw him in the workshop, he was very shy and didn't want to talk to us. Then the next time I saw him, when he was working in the garage, he would say a little bit to me, a couple sentences about rotating tires on a car—I have always wanted to know how to do that. Last week at the summit he spoke on a panel in front of two hundred and fifty people, and I swear he's gotten taller.

Why—with all of this good news on how much this benefits society, how much it benefits the employers, how much it benefits the people with disabilities—why are over 200,000 people with disabilities still in sheltered workshops and 200,000 more in the segregated day programs, not working at all? Why are people with disabilities still making less than minimum wage? You don't know either?

Why do we as a community still tolerate segregation and poverty based on disability—just on disability? You don't know the answer to that one? Why are the unemployment rates still so high for people with disabilities, three times as high as for people without disabilities, two times as high even if you're a college graduate? Are we less competent? [Convention answers no] Are we less confident? [No] Do we have low expectations for ourselves? [No] Are we afraid of hard work? [No] But do we have low expectations of employers, businesses—I'm afraid we may. Do we have low expectations of government? [Yes] Do we have low expectations of service providers? [Yes] That may be. But we are at a tipping point. We can accept the argument that we'll be the last ones hired as the economy continues to recover. We can accept that we'll be paid less because we are lucky to be working at all. We can accept charity and poverty because they are safe. Or we can stand up and insist on high expectations for ourselves, for our employers, for the businesses we buy from, and from our government. And they will respond! Thank you all very much.

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