The Train is Coming
Do You Want to be on the Train or on the Tracks?
Josh Wilson
What Train?
Section 14(c) of the Fair Labor Standards Act
• A certification written in 1938 allowing employers to pay subminimum wage
to persons with disabilities.
• The disability must impair the worker’s earning or productive capacity for the
work being performed.
http://www.dol.gov/whd/regs/compliance/whdfs39.pdf
Section 14(c) of the Fair Labor Standards Act
• Definitions: (United States Department of Labor, Wage and Hour Division)
• Sheltered Workshop or Work Center: Centers that have historically provided rehabilitation
services, day treatment, training, and/or employment opportunities to individuals with
disabilities. Work centers no longer refer to themselves as "sheltered workshops" nor do they
perceive themselves as offering "sheltered" employment.
• Special Minimum Wage (SMW) or Subminimum Wage: A wage paid to a worker
with a disability that is commensurate with that worker's individual productivity as
compared to the wage and productivity of experienced workers who do not have disabilities
performing essentially the same type, quality, and quantity of work in the vicinity where the
worker with a disability is employed.
http://www.dol.gov/whd/FOH/ch64/64k00.htm
Section 14(c) of the Fair Labor Standards Act
• Definitions: (United States Department of Labor, Wage and Hour Division)
• Supported Employment/Work: Term referring to work programs in which job
coaches work with individuals with disabilities who are placed in employment settings
(outside of the work center or rehabilitation center) with workers who do not have
disabilities. The job coaches typically provide extensive training and actually perform
the job where necessary.
• Integrated Employment
http://www.dol.gov/whd/FOH/ch64/64k00.htm
Section 14(c) of the Fair Labor Standards Act
• According to DOL, businesses in which someone would likely encounter
14(c) subminimum wage certificates include:
• “Community rehabilitation programs (CRPs) and work centers (formerly known as
sheltered workshops) which specialize in the employment of workers with disabilities
and may also provide rehabilitation…”
http://www.dol.gov/whd/FOH/ch64/64b00.htm
Section 14(c) of the Fair Labor Standards Act
• Reasoning For Law:
• Mechanism to provide employment to persons who without the exemption would be
unemployed.
• E.g. A worker functioning at a 50% productivity level working in a position that normally
pays $10/hr. would be paid $5/hr.
Section 14(c) of the Fair Labor Standards Act
• Advocates:
• Affords persons with disabilities the opportunity to work.
• Development of work skills that can be used in a competitive employment
environment.
Section 14(c) of the Fair Labor Standards Act
• Opponents
• Discriminatory
• The Right Training, Supports, and Opportunities Can Afford Persons with Some of the
Most Significant Disabilities to Work in a Competitive Environment.
• Integrated Employment Environment at Minimum Wage is More Meaningful to the
Employee.
• Skills learned in a Workshop are not Transferable to the Competitive Workforce.
• Integrated Environment = Stronger Support Network
Section 14(c) of the Fair Labor Standards Act
• Opponents
• Segregated Employment is more Costly.
• According to A Call to Action Report by Oregon’s Department of Human Services:
“…research data show that the cumulative costs generated by sheltered employees may be as
much as three times higher than the cumulative costs generated by supported employees—
$19,388 versus $6,618
• Average monthly benefit to taxpayers in a 2000 study was$795.65 according to Braddock, et
al.
• Higher Wages contribute to Economic Development.
Americans with Disabilities Act (ADA)
• Signed by George H.W. Bush in 1990
• Equal Opportunity Law for Persons with Disabilities
• Entities Required to Abide by the ADA Include:
• Private Employers (15 or more employees)
• Local, State, Federal Government
• Employment Agencies
• Labor Unions
Americans with Disabilities Act (ADA)
• Prohibits the Discrimination of Qualified Persons with Disabilities in:
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Job Application Procedures
Hiring
Terminations
Advancement
Compensation
Job Training
Other Areas of Employment
Americans with Disabilities Act (ADA)
• Reasonable Accommodation Must be Provided to Workforce when
Requested.
• Unless Undue Hardship Exists.
• “Action requiring significant difficulty or expense when considered in light of factors such as
an employer’s size, financial, and the nature and structure of its operation.”
http://www.eeoc.gov/facts/fs-ada.html
Olmstead Ruling
• Case:
• Two Women Who Were Held in a Psychiatric Institution Unnecessarily.
• U.S. Supreme Court Ruling in 1999:
• Public Entities Must Provide Community-Based Services to Persons with Disabilities
when:
• Such Services are Appropriate.
• The Affected Persons do not Oppose Community-Based Treatment.
• Community-Based Services Can be Reasonably Accommodated.
Olmstead Ruling
“Requires States to Eliminate Unnecessary Segregation of Persons
with Disabilities and to Ensure that Persons Receive Services in the
Most Integrated Setting Appropriate to their Needs.”
http://www.ada.gov/olmstead/
HCBS and “Community”
• CMS Issued a Final Rule Effective 3/17/2014 defining Community for
Home and Community-Based Services (HCBS).
• Applies to all States providing HCBS.
HCBS and “Community”
• Community-Based Settings Must Have the Following Qualities:
• “The setting is integrated in and supports full access of individuals receiving Medicaid
HCBS to the greater community, including opportunities to seek employment and work
in competitive integrated settings, engage in community life, control personal resources,
and receive services in the community, to the same degree of access as individuals not
receiving Medicaid HCBS.”
ANCOR Member Exclusive Webinar January 31, 2014
New HCBS Rule: What Providers Need to Know
Barbara Merrill, V.P. of Public Policy
HCBS and “Community”
• Community-Based Settings Must Have the Following Qualities:
• “The setting is selected by the individual from among setting options, including nondisability specific settings and an option for a private unit in a residential setting.”
• “Ensures an individual’s rights of privacy, dignity and respect, and freedom from
coercion and restraint.”
ANCOR Member Exclusive Webinar January 31, 2014
New HCBS Rule: What Providers Need to Know
Barbara Merrill, V.P. of Public Policy
HCBS and “Community”
• Community-Based Settings Must Have the Following Qualities:
• “Optimizes but does not regiment individual initiative, autonomy, and independence in
making life choices, including but not limited to, daily activities, physical environment,
and with whom to interact.”
• “Facilitates individual choice regarding services and supports, and who provides them.”
ANCOR Member Exclusive Webinar January 31, 2014
New HCBS Rule: What Providers Need to Know
Barbara Merrill, V.P. of Public Policy
National Council on Disability (NCD)
• “An independent federal agency charged with advising the President,
Congress, and other federal agencies regarding policies, programs, practices,
and procedures that affect people with disabilities.”
http://www.ncd.gov/about
National Council on Disability (NCD)
• In December 2011, Began Reviewing Issues Related to Section 14(c).
• Letter to the President of the United States on August 23, 2012
• Recommended a Gradual Phase-Out (6-Years) of the 14(c) Program
(Subminimum Wage).
• Gradual Phase-Out Suggested Due to the Time Required to Transition Persons to a
Supported Employment Environment who Have Been in the Program for a Long
Time.
• Determined over 420,000 Persons with Disabilities are Participating in the 14(c)
Program.
National Council on Disability (NCD)
• Findings:
• “Sheltered workshops are ineffective at transitioning individuals with disabilities
to integrated employment. According to the 2001 investigation by the Government
Accountability Office into the 14(c) program, only approximately 5% of sheltered
workshops employees left to take a job in the community.”
http://www.ncd.gov/publications/2012/August232012/
National Council on Disability (NCD)
• Findings:
• “According to the Centers for Medicare and Medicaid Services, Medicaid-financed prevocational services to sheltered workshops are, “not an end point, but a time
limited (although no specific limit is given) service for the purpose of helping
someone obtain competitive employment.”
http://www.ncd.gov/publications/2012/August232012/
National Council on Disability (NCD)
• Findings:
• “Individuals in supported employment who had previously been served in
sheltered workshop settings do not show a higher rate of employment as
compared to those who had gone straight to supported employment without ever being
in a sheltered workshop.” (Employment Rate)
• “However, research indicates that those who had previously been in sheltered
workshops had higher support costs and lower wages than comparable individuals
who had never been in sheltered workshop settings.” (Lower Costs)
http://www.ncd.gov/publications/2012/August232012/
National Council on Disability (NCD)
• Findings:
• “The 14(c) sub-minimum wage program is utilized primarily by non-profit or stateoperated social services providers – specifically, sheltered workshops – rather than
private, for-profit businesses. According to the GAO, 95% of all workers with
disabilities being paid less than minimum wage under the 14(c) program were
employed by sheltered workshops.”
http://www.ncd.gov/publications/2012/August232012/
National Council on Disability (NCD)
• Findings:
• “Research indicates that employees receiving supported employment services
generate lower cumulative costs than employees receiving sheltered workshop
services and that whereas the cost-trend of supported employees shifts downward
over time, the opposite is the case for individuals receiving sheltered workshop
services.” (Lower Costs)
http://www.ncd.gov/publications/2012/August232012/
Executive Order
Federal Contractors
• February 2014-The President signed an Executive Order Requiring Federal
Contractors Pay Workers at Least $10.10 per Hour (Includes Persons with
Disabilities).
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DOL Proposed Rule Issued June 2014.
Public Comment on Rule Open through July 17th, 2014.
Final Rule Expected October 1st, 2014.
Expected January 2015 Effective Date.
So What’s Going on With Other States?
Rhode Island
• The Department of Justice (DOJ) began Investigating in January 2013 for
Violations of ADA/Olmstead.
• DOJ issued a Consent Decree and found the State to be in Violation of the
ADA and Olmstead in January 2014 for the following three Populations.
• Persons in Sheltered Workshops.
• Persons in Facility-Based Day Programs.
• Persons (Youth) in Transition from Secondary School.
Rhode Island
• DOJ Findings:
• In Rhode Island, approximately 80 percent of the people with I/DD receiving state
services, about 2,700 individuals, are placed in segregated sheltered workshops or
facility-based day programs.
• By contrast, only about 12 percent, or approximately 385 individuals, participate in
individualized, integrated employment.
http://www.ada.gov/olmstead/documents/usvri_%20fact-sheet.docx
Rhode Island
• DOJ Findings:
• Placement in segregated settings is frequently permanent: nearly half (46.2 percent) of
the individuals in sheltered workshops have been in that setting for ten years or more,
and over one-third (34.2 percent) have been there for fifteen years or more.
• Individuals with I/DD in sheltered workshops in Rhode Island reportedly earn an
average of only about $2.21 per hour.
http://www.ada.gov/olmstead/documents/usvri_%20fact-sheet.docx
Rhode Island
• DOJ Findings:
• According to state data, among youth with I/DD who transitioned out of Rhode
Island secondary schools between 2010 and 2012, only about five percent
transitioned into jobs in integrated settings, even though many more of these youth
are able to work in integrated employment and are not opposed to doing so.
http://www.ada.gov/olmstead/documents/usvri_%20fact-sheet.docx
Rhode Island
The investigation found that the state has over-relied on segregated
service settings to the exclusion of integrated alternatives.
http://www.ada.gov/olmstead/documents/usvri_%20fact-sheet.docx
Rhode Island
• Rhode Island has agreed to provide:
• Supported employment placements that are individual, typical jobs in the community, that pay at
least minimum wage, and that offer employment for the maximum number of hours consistent
with the person’s abilities and preferences, amounting to an average of at least 20 hours per
week across the target population.
• Placements will impact approximately 2000 persons (700 people in Sheltered Workshops, 950 in
facility-based non-work programs, and 350 students leaving High School).
• Supports for integrated non-work activities for times when people are not at work including
mainstream educational, leisure or volunteer activities that use the same community centers, libraries,
recreational, sports and educational facilities that are available to everyone.
http://www.justice.gov/opa/pr/2014/April/14-crt-350.html
Rhode Island
• Rhode Island has agreed to provide:
• Transition services for students with I/DD, to start at age 14, and to include
internships, job site visits and mentoring, enabling students to leave school prepared
for jobs in the community at competitive wages;
• Significant funding sustained over a ten year period that redirects funds
currently used to support services in segregated settings to those that incentivize
services in integrated settings.
http://www.justice.gov/opa/pr/2014/April/14-crt-350.html
Oregon
• In October 2011, DOJ began investigating ADA/Olmstead Violations.
• In January 2012, Disability Rights Oregon and a few other Entities Brought
Suit against the State of Oregon.
• In March 2012, DOJ joined the Class Action Lawsuit Against the State of
Oregon (Lane v. Kitzhaber).
• In June 2012, DOJ Issued Findings of Investigation.
Oregon
• DOJ Findings:
• The State’s failure to develop a sufficient quantity of communitybased employment and vocational services and supports for
individuals with intellectual and developmental disabilities who are
unnecessarily confined to sheltered workshops.
http://www.ada.gov/olmstead/documents/oregon_findings_letter.pdf
Oregon
• DOJ Findings:
• The State’s direction of available resources to segregated sheltered
workshops rather than to community-based services.
• The State’s use of systemic criteria and methods of administration that
unnecessarily require persons with intellectual and developmental
disabilities to attend sheltered workshops in order to access and
receive employment and vocational services.
http://www.ada.gov/olmstead/documents/oregon_findings_letter.pdf
Oregon
• DOJ Recommendations to Oregon:
• Develop sufficient supported employment services to enable those who are
unnecessarily segregated in sheltered workshops to receive services in the most
integrated setting appropriate to their needs.
http://www.ada.gov/olmstead/documents/oregon_findings_letter.pdf
Oregon
• DOJ Recommendations to Oregon:
• Develop an effective plan to appropriately serve people in integrated settings when they so
choose.
• Plan should:
• Substantially increase the number of persons offered supported employment and
decrease number of persons unnecessarily placed in a sheltered workshop.
• Ensure that youth in schools or transitioning from school are provided supported
employment and not unnecessarily placed in sheltered workshop settings.
• Ensure Vocational Assessments encourage supported employment.
http://www.ada.gov/olmstead/documents/oregon_findings_letter.pdf
Oregon
• DOJ Recommendations to Oregon:
• Incrementally shift funding from Sheltered Workshops to Supported
Employment.
• Create a plan to transition persons in Sheltered Workshops to
Supported Employment.
• Do not allow a person who is qualified for Supported Employment
to be placed into a Sheltered Workshop unless they desire to.
http://www.ada.gov/olmstead/documents/oregon_findings_letter.pdf
I’m Tired…
Workforce Innovation and Opportunity Act
(WOIA)
• Passed by the U.S. Senate on June 25, 2014.
• Passed by the U.S House of Representatives on July 10, 2014.
• Prohibits Persons with Disabilities Younger than 24 to be Paid Less than
Federal Minimum Wage without trying Vocational Rehabilitation Services
First.
Workforce Innovation and Opportunity Act
(WOIA)
• Requires State Vocational Rehabilitation Agencies to dedicate 15% of
Federal Funding to Transitioning from School to Work.
• Exceptions:
• Persons Already Being Paid Subminimum Wage.
• Persons Ineligible for Vocational Rehabilitation.
Employment First Initiative
• Office of Disability Employment Policy (ODEP)
• “Under the Employment First approach, community-based, integrated employment is
the first option for employment services for youth and adults with significant disabilities.”
• APSE (Association of People Supporting EmploymentFirst)
• “The idea that employment in integrated settings within the community should be the
priority service option.”
http://www.apse.org/employment-first/resources/
http://www.dol.gov/odep/topics/EmploymentFirst.htm
Employment First Initiative
• Office of Disability Employment Policy (ODEP)
• Employment First Leadership Mentor Program
• Provides Technical Assistance to States to encourage Integrated Employment as the Primary
Outcome for Persons with Disabilities.
• Iowa, Oregon, Tennessee, Washington
http://www.dol.gov/odep/topics/EmploymentFirst.htm
Employment First Initiative
• Office of Disability Employment Policy (ODEP)
• Customized Employment
• A way to modify a job to the benefit of the worker and the employer.
http://www.dol.gov/odep/categories/workforce/CustomizedEmployment/what/
Employment First Initiative
• Customized Employment
• Task reassignment: Some of the job tasks reassigned to a new employee. This
reassignment allows the worker to focus on the critical functions of his/her job (i.e.,
primary job responsibilities) and complete more of the central work of the job.
• Job carving: An existing job description is modified — containing one or more, but
not all, of the tasks from the original job description.
• Job sharing: Two or more people share the tasks and responsibilities of a job based on
each other's strengths.
http://www.dol.gov/odep/categories/workforce/CustomizedEmployment/what/
Employment First Initiative
• Office of Disability Employment Policy (ODEP)
• Job Accommodation Network (TAX INCENTIVES)
• “Effective Accommodation Practices (EAP) Series Manual”
• Resource of Tax Incentives for Businesses Employing Persons with Disabilities.
• http://askjan.org/
The Social Responsibility and Shared Value
Movement
• Corporate Social Responsibility
• Business Working to Benefit Social Causes
• E.g. Poverty, Hunger, Employ Persons with Disabilities
• A feeling of responsibility to address social issues without their necessarily being an
economic benefit to the business.
• Example: “Percentage of Sales Goes to Charity”
The Social Responsibility and Shared Value
Movement
• Shared Value
• Business Creates Economic Value and Social Value Simultaneously (Making a profit
while meeting a social need).
• Example: Walgreens Hiring Persons with Disabilities.
Olmstead
Social
Change
Initiative
NCD
Persons
Wanting
to Work
ADA
WOIA
CMS
Defining
“Community”
References
• Braddock, Hemp, Rizzolo, Tanis, Haffner, Lulinski & Wu (2013). State of the States in Developmental Disabilities, 2013:
The Great Recession and Its Aftermath. The Coleman Institue, University of Colorado.
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http://www.ncd.gov/publications/2012/August232012/
https://nfb.org/fair-wages
http://www.allianceforfullparticipation.org/
http://www.allianceforfullparticipation.org/state-teams/state-team-scorecards
https://www.disability.gov/
http://www.dol.gov/whd/specialemployment/workers_with_disabilities.htm
http://www.bls.gov/cps/minwage2011tbls.htm#1
http://www.dol.gov/whd/specialemployment/CRPWorkSheet.xls
http://www.imasocialentrepreneur.com/social-responsibility/
References
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https://bealocalist.org/Localism-101
http://www.thinkbeyondthelabel.com/Start-Hiring/Start-Hiring.aspx
http://www.dol.gov/odep/topics/EmploymentFirst.htm
http://www.ada.gov/olmstead/olmstead_cases_list2.htm
http://www.ada.gov/olmstead/index.htm
http://www.walgreens.com/topic/sr/disability_inclusion_home.jsp
http://www.dol.gov/odep/ietoolkit/communityEmploymentAgencies.htm
http://www.usbln.org/
http://www.ada.gov/olmstead/index.htm
http://www.ada.gov/olmstead/documents/oregon_findings_letter.pdf
References
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http://www.apse.org/wp-content/uploads/2014/01/APSE-Subminimum-Wage-Policy-Statement-10.091.pdf
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http://sharedvalue.org/resources
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http://www.dol.gov/whd/regs/compliance/whdfs39.htm
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http://www.nasddds.org/uploads/documents/Oregon_Fact_Sheet.pdf
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http://www.dhs.state.or.us/dd/supp_emp/docs/wise.pdf
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http://www.dol.gov/whd/FOH/ch64/64b00.htm
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http://www.ada.gov/olmstead/documents/usvri_%20fact-sheet.docx
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http://www.dol.gov/whd/FOH/ch64/64k00.htm
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http://www.ada.gov/ada_intro.htm
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http://www.ada.gov/olmstead/olmstead_about.htm
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http://www.eeoc.gov/facts/fs-ada.html
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http://www.justice.gov/opa/pr/2014/April/14-crt-350.html
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http://www.disabilityscoop.com/2014/06/18/feds-comment-subminimum/19453