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‘Subminimum wage’ for disabled workers called exploitative

At a noisy warehouse off Veterans Highway in Millersville, Md., a young woman concentrates as she pokes black shoelaces into cardboard packaging. In another room, workers slowly count tiny bottles of hair products, placing them in plastic bags that will end up as samples in salons.

To some, these workers with developmental disabilities are getting valuable on-the-job-training and the self-respect that comes with employment. Others say they’re being exploited — because wages in the facility, run by a nonprofit, are as low as 25 cents an hour.

A nearly 80-year-old exemption in the U.S. Fair Labor Standards Act allows employers across the country to pay so-called “subminimum” wages to hundreds of thousands of people with disabilities.

One person was paid 68 cents an hour to assemble trophies, records from the U.S. Department of Labor show. Another received an hourly rate of $3.20 to do laundry for a uniform company. And one made $2.44 an hour to sweep, mop and straighten shelves at a thrift store.

A debate about the wages paid to these disabled workers has divided nonprofits. Opponents say the system is holding back participants, feeding a cycle of low expectations and dependency. Under the exemption, there is no limit on how long workers can hold the low-paying jobs.

“You set people’s expectations very low, you say this is all you could ever hope for – and then that’s what you’re stuck with,” said Chris Danielsen of the Baltimore-based National Federation of the Blind, which has been trying for years to eliminate the subminimum wage.

“What’s really between people with disabilities and their dreams, and having a normal productive life, is the low expectations,” he said.

Some nonprofits that serve people with disabilities defend the program – known as 14(c) for the exemption in federal labor law – as a tool to help workers find employment. The jobs provide a paycheck while the workers gain training. Without it, they might not get any work at all, supporters say.

“This gives them the ability to work and still earn money and gain self-esteem with medical and behavioral supports still in place,” said Vicki Callahan, executive director of the nonprofit Opportunity Builders, which employs the people working in the Millersville warehouse. “A lot of people who walk through this building would say, ‘I never thought they could do work.’ The fact is, they can – with support.”

In New York state, sheltered workshops where people work for below minimum wage are being phased out because they segregate workers with disabilities from non-disabled workers. That is causing widespread concern among families whose loved ones have benefited from and enjoyed working in the shelters. The state is seeking to convert the shelters into combined job sites for all workers.

All sides agree that the unemployment rate among people with disabilities is troubling. Just over 19 percent of disabled people work – compared with 68 percent of all Americans 16 and older, according to the U.S. Department of Labor.

Those who favor the 14(c) program say that without it, the numbers would be even bleaker.

“Many employers are not willing to give these folks a chance,” said Martin Lampner, CEO of Chimes, a Baltimore-based nonprofit that offers services for people with developmental disabilities.

Debate about the subminimum wage drew attention in 2012, when the National Federation of the Blind urged a boycott of Goodwill Industries because of its CEO’s half-million-dollar salary, but efforts to abolish the 14(c) program began decades ago.

Rep. Gregg Harper, a Mississippi Republican, has been an ally of the Federation of the Blind in the campaign. He has sponsored the Fair Wages for Workers with Disabilities Act, which would phase out the 14(c) program over three years.

To Harper, the low wages are a form of discrimination, one that is stopping people from reaching their full potential.

“We believe that what we’re seeing is just extremely unfair,” said Harper, whose son, Livingston, has the intellectual disability Fragile X syndrome.

The issue again gained a national spotlight in February, when President Barack Obama signed an executive order requiring federal contractors to pay all workers – including the disabled – $10.10 per hour.

Through the U.S. Department of Labor, employers can apply for a Special Minimum Wage Certificate, which gives them permission to pay less than the federal minimum wage – currently $7.25 an hour – to workers who have disabilities.

Most are nonprofits that serve people with disabilities. Some employ a handful of workers, while others employ hundreds, paying wages that can vary widely. The nonprofits often contract with businesses that need the services disabled workers can provide. These job sites, where people with disabilities work apart from others, are sometimes called sheltered workshops.

Employers calculate the pay of a 14(c) employee based on how much the worker can produce compared to a person who doesn’t have disabilities. For instance, if an able-bodied person can clean a bathroom in 20 minutes and it takes a disabled worker 40 minutes to do it, the worker would be paid half the prevailing wage in the area for a janitor.

Severna Park, Md., resident David Lawrence, 44, earned an average of 99 cents an hour last year at Opportunity Builders. The intellectually disabled man has been with the organization for about 20 years. Earning a paycheck is an important part of his life, said his father, a member of the nonprofit’s board.

“He doesn’t realize what he can or can’t buy with it,” Chet Lawrence said. “But the fact that he gets it is a very uplifting experience.”