NFB Testifies on Workshops

NFB Testifies on Workshops

Braille MonitorMay-June 1986
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NFB Testifies on Workshops
(The following testimony was presented
before the Committee on Small Business
of the United States Senate March 26,
1986.)
Mr. Chairman, my name is James Gashel.
I am Director of Governmental Affairs
for the National Federation of the
Blind. I am appearing in this hearing
on behalf of the Federation. My address
is 1800 Johnson Street, Baltimore, Maryland
21230; telephone (301) 659-9314. I greatly appreciate the opportunity you
have extended to me to participate in
this hearing and to provide our views
relative to small business set aside
contracts for not-for-profit organizations
operated "in the interest of" handicapped and blind individuals,
commonly known as sheltered workshops.
Almost 20% of working age blind Americans
who are employed work in sheltered
workshops. The National Federation of
the Blind provides them an opportunity
to speak with a collective voice. Our
members, more than 50,000 strong, are
organized into state affiliates and
local chapters in each state and most
sizeable population areas. Our leaders,
and the vast majority of our members,
are blind. So when we talk about blindness,
and the programs that serve or
employ blind people, we speak from personal
experience. We know which programs
work, and we know where repairs
are needed.
Seventy percent of the employable
blind people in this country are either
unemployed or substantially underemployed.
So, if we are going to get
anything out of legislation such as S.
2147, your bill before this Committee,
our aim is to reduce the outrageously
high rate of unemployed or underemployed
working age blind people. Sheltered
workshops as they exist today are not
helping, but they could be improved. My
presentation in this hearing will provide
you with information to help you do
that.
The ultimate purpose of S. 2147 is to
provide blind and handicapped people
with more and better work opportunities.
That is an objective we share. But the
bill in its present form will not
achieve our goal, Mr. Chairman. Absent
are certain features designed to insure
employment opportunities for the blind
and handicapped, to protect wages for
the blind and handicapped workers, to
guarantee rights of collective bargaining
and observance of other normal labor
standards, and to improve placement of
blind and handicapped individuals in
competitive employment outside of
sheltered workshops, we cannot support
this measure. What could we support?
The National Federation of the Blind
strongly favors any legislation that
will promote better work opportunities
and fair employment practices for blind
and handicapped individuals in sheltered
workshops, as well as in competitive
employment. I imagine you share this
goal, too, Mr. Chairman. If so, we
would like to have your assistance in
making needed changes in S. 2147 when
the Committee considers this bill for
mark up and reporting to the Senate.
A Workshop Profile
A description of a typical sheltered
workshop might help to set a framework
for the recommended changes we intend to
offer for S. 2147. Our specimen workshop
is the Industries Program for the
Blind and Handicapped operated by the
State of Connecticut, Board of Education
and Services for the Blind. The workshop
has plant locations in Newington
and Wethersfield. Both will soon merge
into a single facility located in West
Hartford. The figures I will cite concerning
employment and pay come from
1983 and represent the pattern of this
program's operation in the years before
and since.
If you include all positions from
direct labor to top management in the
Connecticut workshop, there is a total
workforce of 116 individuals. Eighty
five perform direct labor jobs, and 31
hold positions classified as management,
supervision, and indirect labor. Of the
85 direct labor workers, only 6 are
sighted with no reported handicaps.
Eight sighted workers have handicaps,
and the remaining 71 direct labor
employees are blind, some with other
handicaps. As for the 31 employees
classified as management, supervision,
or indirect labor, 20 of them are
sighted without reported handicaps. Six
more are sighted with handicaps, and 5
are blind--3 with other handicaps and 2
without.
Ninety-three percent of the employees
in direct labor positions are individuals
reported to be blind or handicapped.
But in the management, supervision,
and indirect labor category,
blind and handicapped people represent
only 35% of the work force. These, of
course, are the better paying jobs. The
figures bear that out. Total direct
labor pay amounts to $151,424.,
divided up among 85 employees (93% of
whom are blind or handicapped). By
contrast, pay to managers, supervisors,
and indirect labor workers amounts to
$2 93,597., divided up among 31
employees (only 35% of whom are blind or
handicapped).
As for hourly pay averages, all blind
and handicapped direct labor workers
combined earn an average of $2.04 per
hour, whereas all sighted handicapped or
nonhandicapped direct labor workers earn
an average of $4.09 per hour. Sighted
workers without handicaps earn $4.20 per
hour. As for managers and supervisors,
sighted people without handicaps (who
are in the majority in this category,
holding 20 out of 31 positions) earn an
average of $8.25 per hour, in comparison
to their blind and handicapped coworkers,
who earn an average of $5.54
per hour.
Now for the bottom line: total pay to
all 116 employees at the Connecticut
workshop is $445,021. There are 26
sighted employees who do not have handicaps,
representing 22.41% of the work
force. Yet these 26 individuals were
paid $283,911, or 63.79% of the total
pay for the Connecticut workshop. That
leaves $161,110. to be paid to blind
or handicapped workers, or a little over
36% of the total pay. But the blind and
handicapped (who according to these
figures received a little over 36% of
the pay) represent almost 78% of the
work force. That's what the figures
show, Pay levels in the Connecticut
workshop seem to depend strictly upon
the extent of a person's handicap or
blindness. The best jobs and the best
pay go to sighted individuals who do not
have handicaps. By contrast, workers
who are blind only or blind with handicaps
hold the lowest level jobs and
receive the lowest pay.
I emphasize that the Connecticut workshop
is absolutely typical of the nonprofit
industries that now seek admission
to section 15(c) of the Small
Business Act. I would challenge any of
these workshops to show you a work force
that has blind and handicapped people
significantly involved in management and
supervision. And more to the point, I
would challenge any of these workshops
to show you that the percentage of pay
for workers who are blind or handicapped
even approximates the percentage of the
work force represented by employees who
are blind or handicapped. In other words, in a workshop where 78% of all
employees are blind or handicapped, they
ought to be receiving 70%, 75%, or even
80% of the pay. That is the fair distribution
I am talking about. But, Mr.
Chairman, you won't find that kind of
equitable pay distribution in the workshops.
We find that to be an unacceptable
condition.
Existing Law
The profile of the Connecticut workshop
just presented shows that work
opportunities for the blind and handicapped
are principally found in the
direct labor positions, whereas employment
for the sighted and nonhandicapped
is in management and supervisory positions.
Also, pay for the blind and
handicapped averages well below the
Federal minimum wage, whereas pay for
sighted workers (even those in direct
labor) is substantially above the
Federal minimum. These conditions arise
from two existing Federal laws--the
Javits-Wagner-O'Day Act, and the Fair
Labor Standards Act--both originally
enacted in 1938.
Under the Javits-Wagner-O'Day Act,
sheltered workshops are able to qualify
for noncompetitive government contracts
if 75% of the direct labor in the workshop
is performed by blind or other
severely handicapped individuals. There
are absolutely no requirements for blind
or other severely handicapped people to
be working in management or supervisory
positions. Similarly, there are no
requirements pertaining to pay distribution,
such as a minimum percentage of
pay for the blind or handicapped, or
some other concept to assure that these
employees are fairly benefiting from the
workshop's operation. The assumption of
the Javits-Wagner-O'Day Act is merely
that providing the Federal business will
result in jobs for the blind and handicapped,
and the jobs are supposed to be
direct labor.
As for pay, the requirements which
apply to sheltered workshops are mainly
found in section 14(c) of the Fair Labor
Standards Act. This section provides
several types of exemptions from the
minimum wage, all of which are applicable
to handicapped workers in
sheltered workshops. The exemptions
granted by the Secretary of Labor under
section 14(c) permit wages for blind and
handicapped individuals to be as low as
25% of the Federal minimum wage. Further
exemptions which apply to units
known as "work activities centers" allow
wages even below 25% of the Federal
minimum. Industries classified as
"regular workshops" are required to pay
the blind and handicapped workers at
least 50% of the minimum wage, but
exemptions for individual workers below
the 50% subminimum will be granted if
the proper forms are filed with the
Department of Labor.
The provisions of existing law just
described show that workshops already
enjoy a special status in obtaining
noncompetitive Federal contracts and in
operating under labor standards that are
less stringent than the requirements
which apply to their counterparts in
competitive small business. The question
which Congress should now examine
in the present consideration of extending
small business set aside contracts
to workshops is whether under existing
laws the blind and handicapped workers
are actually getting a fair shake. Are
these not-for-profit organizations actually operated "in the interest of"
handicapped individuals? The evidence
shows that they are not.
Collective Bargaining
Are sheltered workshops subject to the
jurisdiction of the National Labor Relations
Act? That is a subject which has
been hotly debated. Without the collective
bargaining rights which their
counterparts in competitive small business
have, the blind and handicapped
workers in workshops have no mechanism
to negotiate pay equity, layoff protections
and recall guarantees, improved
working conditions, fringe benefit
plans, or any other issue of labor/
management relations that may arise. So
employees in these workshops are largely
at the mercy of the managers, and their
only hope is that the managers will be
motivated by a benevolent spirit.
In recent years, both the National
Labor Relations Board and the Federal
courts have been asked to rule on
various union representation requests
presented by workers in sheltered workshops.
More and more the tendency of
the Board has been to assert jurisdiction,
finding that the workshops are
primarily conducting business activity
in the generally accepted sense. In an
unbroken string of four cases involving
workshops for the blind over the past
ten years, the National Labor Relations
Board has asserted jurisdiction, and the
appeals courts in two Federal circuits
have concurred that collective bargaining
in the workshops is a proper form of
labor protection for these workers.
In opposition to these rulings, the
workshops have claimed an exemption from
the National Labor Relations Act. They
have argued that Congress has consciously
given them a preferred status by
enacting the Javits-Wagner-O'Day Act and
the Fair Labor Standards Act, both of
which (according to the workshops) give
deference to the management of the work shops
in determining how their blind and
handicapped workers will be treated.
Believe it or not, the workshops
actually contend that the blind and
handicapped people who perform direct
labor are not even employees. But that
sophistry is not fooling the National
Labor Relations Board nor the Federal
courts.
A principle fact that shines through
the smoke screen of talk about rehabilitation
and therapy for the handicapped
is the productive output of the blind
and handicapped workers in the workshops.
Under the Javits-Wagner-O'Day
Act alone last year 15,000 of these
direct labor workers produced nearly
$300 million in sales to the Federal
government for their sheltered workshop
employers. Yet these workers only
received pay amounting to about $41
million, or 13.66% of the gross sales.
Need I say that the industry standard
for labor pay as compared to gross sales
far exceeds the 13.66% paid last year to
the blind and handicapped workers holding
labor jobs in the Javits-Wagner
O'Day program? I doubt that any labor
union in this country would settle for
such a paltry return for its members.
Recommendations for S. 2147
If Federal small business set aside
contracts are extended to sheltered
workshops, Congress should require the
workshops to provide better work opportunities
and fair employment practices for the blind and handicapped employees.
(1) An employment standard should be
established which is not limited to
direct labor jobs. In this respect, S.
2147 currently follows the limited
standard of the Javits-Wagner-O'Day Act,
requiring that at least 75% of the
direct labor be performed by blind or
handicapped people. We are suggesting
that a standard be established for the
entire work force, not just the direct
labor jobs. Seventy-five percent of all
work hours to be performed by the blind
or handicapped would be an acceptable
standard in our opinion. But the issue
is not the precise percentage. Whatever
the percentage, the Small Business Act
should not perpetuate an employment
standard for the blind and handicapped
which has proven to be a severe limitation
on employment opportunities in jobs
other than direct labor in the workshops.
(2)
A pay standard for blind and
handicapped workers should be established
to achieve job equity and fair
distribution of compensation. S. 2147
has no pay standard currently. The pay
standard should require that all workers
receiving compensation under contracts
awarded pursuant to section 15(c) of the
Small Business Act shall be paid at
least the Federal minimum wage. Beyond
that, an overall pay standard should be
included to assure that at a minimum
there will be an approximate balance
between the percentage of pay for blind
and handicapped workers as compared to
the percentage of their numbers in the
work force. In other words, if blind
and handicapped individuals represent
70% of the entire work force, then the
standard for that workshop would be that
the blind and handicapped receive an
approximate 70% pay distribution.
(3) All labor management and labor
standards requirements otherwise applicable
to similar small businesses should
apply to workshops seeking contracts
under section 15(c) of the Small Business
Act. The Small Business Act should
not perpetuate substandard labor conditions
for blind and handicapped workers.
Just as small business owners are
required to bargain with their employees
(if the employees elect to bargain and
the business is big enough) so, too, the
managers of sheltered workshops should
bargain with their blind and handicapped
employees, if the employees want a
union. So, jurisdiction of the National
Labor Relations Act and all other labor
standards that otherwise apply to small
businesses should apply to sheltered
workshops that participate in the
section 15(c) program, but only to the
extent that such requirements apply to
all other businesses. We are not seeking
an expansion, just equity.
(4) Workshops that participate in
section 15(c) of the Small Business Act
should show, in advance of the receipt
of any contract, that a working agreement
has been established with agencies
and industries in the community under
which blind and handicapped individuals
will be employed to fill existing and
future job vacancies outside of the
sheltered workshop. Then, actual job
placement performance in accordance with
such agreements should be evaluated as a
principle factor in connection with the
award of future Federal contracts under
section 15(c). This recommendation
would properly assist the workshops in
fulfilling their role as transitional
employment settings designed to prepare
individuals to compete in the non-sheltered work force.
Mr. Chairman, as I have stated in
several ways before, these four recommendations
have the combined purpose of
providing better employment opportunities
and fair employment practices for
blind and handicapped individuals who
work in sheltered workshops. I must
emphasize, however, that these proposals
are specifically tailored to the
objective of permitting workshops to
qualify for small business set aside
contracts under section 15(c). The
standards for eligibility of the workshops,
which we are proposing in these
recommendations, are clearly proper
requirements within the scope of section
15(c). We are not asking you to change
the definition of a sheltered workshop
under other laws or to strike down any
of the existing special or preferred
requirements that workshops hold claim
the purview of the Small Business Act
(and only for purposes of participating
in the small business set aside program)
workshops should be required to meet
certain qualifying standards aimed at
better work opportunities and fair
employment practices for their blind and
handicapped employees.
The authorization for workshops to
have small business set aside contracts
should at least obtain that goal. If it
does, S. 2147 will truly be a beneficial
addition to the growing body of Federal
law designed to provide more employment
opportunities and equal rights for blind
and handicapped people. Reports by
Congressional committees (both in the
House of Representatives and in the
Senate) confirm what I have said about
limited employment opportunities and low
pay for blind and handicapped workers
under present conditions as permitted by
existing Federal laws. Similar findings
have been made by the General Accounting
Office, the Department of Labor, and
even private research teams who have
surveyed workshops pursuant to Congressionally
ordered studies. In concluding
this statement I would urge you to
review these findings and thereby ensure
that the legislation you develop and refine in this
Committee will be
properly written to achieve better
employment opportunities and fair
employment practices for the blind and
handicapped in jobs provided pursuant to
section 15(c) of the Small Business Act.
Above all, the legislation you approve
and report to the Senate should not
perpetuate the limits and inequities of
other programs. I thank you.(back)(contents)(next)