1. State of the Nation: Sub Minimum Wage Employment First Maine Coalition November 14, 2014

2. A National Lens on 14(c) APSE TASH HR 3086 USBLN National Federation of the Blind National Council on Disability State efforts: NH, MI, RI, MA, MD, VT

3. APSE (circa 2009) As an organization that promotes national, state, and local policy development which enhances the social and economic inclusion and empowerment of individuals with disabilities, the Executive Board of APSE is calling for the complete phase out of sub- minimum wage for all individuals with disabilities by the end of 2014.

4. In calling for phase out of sub-minimum wage, APSE recognizes the importance of undertaking such action in a way that is carefully thought out: – Leading to movement of individuals currently being paid sub-minimum wage into individual, integrated employment opportunities paying minimum wage or higher, and’ – Avoiding unintended consequences that would not only damage efforts to expand community employment, but result in actual loss of rights and opportunities for individuals with disabilities to full integration and inclusion in society.

5. Therefore, elimination of sub-minimum wage must be accomplished based on the following principles and concepts: Phase out of sub-minimum wage should occur over time, In conjunction with the phase-out of sub-minimum wage, a national effort must be undertaken to improve the overall quality of community employment outcomes both in terms of individual outcomes (wages, hours, diversity of employment), system outcomes (efficiency and effectiveness), and proper funding of services and long- term supports.

6. – The movement of individuals into non-work day habilitation facilities, instead of into community employment, is not an acceptable outcome of the phase out of sub-minimum wage. – A key focus of efforts to phase out sub-minimum must be ending the use of sub-minimum wage for students entering the word of work, including: a) elimination of the use of 14(c) certificates for students currently in school; b) elimination of placements in jobs using 14(c) certificates as a post-secondary outcome. – A federal cross-agency task force should be created to develop and implement the phase out of sub- minimum wage in conjunction with implementation of a cross-disability national Employment First Policy.

7. TASH TASH supports the immediate need for federal legislation that will result in a planned phase- out and elimination of section 14(c) of the FLSA. As part of this phase-out, no person with a disability who wishes to work should be denied the assistance they need to secure employment in the general workforce at minimum wage or higher.

8. The elimination of Section 14(c) should be done according to the following principles: A. Sub-minimum wage should be eliminated through carefully planned phase out that ensures the desired outcomes are achieved for the vast majority of people with disabilities who are impacted. Some unintended, negative consequences may occur, but these should not be widespread, nor should they be predictable and therefore avoidable.

9. Desired outcomes are wage equality and integration. No plan for elimination should be supported that inadvertently inhibits the achievement of one or both of the desired outcomes. Results of the phase out of sub-minimum wage should include no decline in employment rate among people with disabilities impacted by phase out (i.e. those working at sub-minimum wage immediately prior to phase out).

10. H.R. 3086 112 th Congress, 1 st Session (2012) “To phase out special wage certificates under the Fair Labor Standards Act of 1938 under which individuals with disabilities may be employed at subminimum wage rates.”

11. Sec. 3 Transition to Fair Wages (1) DISCONTINUANCE.—Effective on the date of enactment of this Act, the Secretary of Labor shall discontinue issuing special wage certificates under section 14(c) of the Fair Labor Standards Act of 1938 (29 U.S.C. 214(c)) to any new entities not currently holding a certificate.

12. (2) TRANSITION.—All special wage certificates on the date of enactment of this Act— (A) by private for profit entities shall be revoked 1 year after such date of enactment; (B) by public or governmental entities shall be revoked 2 years after such date of en- actment; and (C) by non-profit entities shall be revoked 3 years after such date of enactment.

13. (3) REPEAL.—Effective 3 years from the date of enactment of this Act, section 14(c) of the Fair Labor Standards Act of 1938 (29 U.S.C. 214(c)) is repealed and any remaining special wage certificates issued under such section shall be revoked.

14. National Council on Disability Transformation of the 14(c) Program Recommendation: NCD recommends the Congress should pass legislation phasing out the 14(c) program as outlined in this report. Recommendation: NCD recommends that the U.S. Department of Labor cease issuing all Section 14(c) Certificates thirty days after passage of this legislation.

15. Recommendation: NCD recommends that the Department of Education undertake rulemaking to prohibit schools districts from establishing placement in a setting whereby the student will receive subminimum wage as a goal in any IEP.

16. Recommendation: NCD recommends that the Department of Labor undertake rulemaking to phase out all existing 14(c) certificates to providers of employment services according to the following schedule: All individuals in certificate settings for ten years or less shall be transitioned within two years All individuals in certificate settings for ten to twenty years shall be transitioned within in four years All certificates shall expire in six years, and all individuals in certificate settings longer than twenty years shall be transitioned within six years.

17. USBLN Many USBLN® member companies have taken proactive measures to hire qualified individuals with significant disabilities who had unnecessarily worked in segregated environments in which they earned significantly below minimum wage. Once entering a competitive work environment with reasonable accommodations and training, these qualified employees are able to maintain and exceed performance standards, often earning well above minimum wage, in an integrated setting.

18. We maintain that all qualified employees, including those with disabilities, should receive equal pay for equal work as do their colleagues without disabilities. As an organization, the USBLN® is committed to this end. 2012

19. National Federal of the Blind The Case Against the Section 14(c) Subminimum Wage Program Prepared for the National Federation of the Blind by Samuel R. Bagenstos suggests that 14 (c) is an anomaly in the post-ADA world, and calls on Congress to repeal it.

20. New Hampshire House Bill 1174: An Act establishing a committee to study the payment of subminimum wages to persons with disabilities (2014) Statement of Purpose. The general court finds that: I. The state of New Hampshire is committed to ensuring that all workers earn at least the state minimum wage.

21. II. The state of New Hampshire and all of its state agencies are committed to employment policies that enable persons with disabilities to exercise self- determination, be independent, be productive, and be integrated and included in all facets of community life. III. Employers should be encouraged to hire qualified workers with disabilities and pay them at least the prevailing wage. IV. Employment in the general workforce is the first and preferred outcome in the provision of publicly funded services for all working age citizens with disabilities, regardless of level of disability.

22. Payment of Subminimum Wages; Persons with Disabilities; Committee Established; Membership; Compensation. I. There is established a committee to study and identify New Hampshire laws and rules that permit the payment of subminimum wages to persons with disabilities, and to recommend changing such laws to reflect the contemporary policy and practice of providing wages to individuals with disabilities that are fair and comparable to those wages paid to individuals without disabilities.

23. Duties. The committee shall: I. Analyze federal laws on wages, including section 14(c) of the Fair Labor Standards Act. II. Identify specific state statutes and rules that need to be changed to end the payment of subminimum wages to workers with disabilities. III. Analyze national and state data on the payment of subminimum wages to workers with disabilities. This analysis shall include the employers and provider agencies in New Hampshire that are currently paying subminimum wages and the circumstances under which such wages are being paid.

24. IV. Analyze the potential impact in New Hampshire of proposed federal legislation to phase out the payment of subminimum wages to workers with disabilities. V. Analyze the economic advantages and disadvantages to employers of phasing out the payment of subminimum wages to workers with disabilities in New Hampshire. VI. Analyze whether public funds are being used in New Hampshire to directly or indirectly support paying subminimum wages to workers with disabilities, and recommend a policy to end such practices.

25. VII. Develop a strategic plan to be used by employers and provider agencies to effectively phase out the payment of subminimum wages that includes a timeline, mechanisms to provide technical assistance and training to employers and provider agencies as they phase out subminimum wage arrangements, and access to employment services for individuals with disabilities as they are phased out of subminimum wage arrangements. Report due to the NH Legislature 11/1/14

26. Michigan (2014) Employment First is based on the expectation that individuals with disabilities can, with proper training, job matching techniques, assistive technology and reasonable accommodations, earn a fair and prevailing wage alongside individuals without disabilities in fully integrated settings. This philosophy lays the foundation upon which a productive, valued workforce of individuals with disabilities can be built.

27. Examples of appropriate policies supporting Employment First include, but are not limited to, the following: All service providers and employers will presume employability of individuals with disabilities. No public dollars should be spent asking if someone is employable but rather should be invested in up-front services that are focused on determining how an individual can be successfully employed. All Person-Centered Planning is required to include employment objectives for individuals with disabilities who wish to be employed.

28. All transition-age youth with disabilities will have an integrated employment outcome identified in their Individualized Transition Plan (ITP) and a coordinated set of supports and services to help achieve the desired employment outcome. All transition-age youth with disabilities will have community-based training and job exploration opportunities as part of their secondary education program. Funding will be allocated to assist Community Rehabilitation Programs as they restructure from sheltered employment to community-based employment settings.

29. Rhode Island The Department of Justice (DOJ) launched an ADA investigation in January 2013 into Rhode Island’s day activity service system for people with I/DD. The department’s initial investigation found that the majority of people receiving publicly funded employment and day habilitation services in segregated programs can work and want to work.

30. RI Settlement Agreement The key components of the settlement require Rhode Island to provide the following: 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;

31. 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; 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; and Significant funding sustained over a 10-year period that redirects funds currently used to support services in segregated settings to those that incentivize services in integrated settings.

32. Massachusetts Massachusetts’ approach to Employment First focuses on individuals with developmental disabilities and aims to end sheltered workshops. Individuals and groups will be transitioned to either community work at minimum wage or higher or to integrated day programs. The state plans to continue to move people from day services to community employment at minimum wage or higher over the next few years and to gradually phase out group employment. The state, overall, is eliminating sheltered work as an option and moving people from sheltered work to individualized community work, at minimum wage or higher, while making employment the first rule for individuals entering the developmental disabilities support system. This was achieved through a developmental services statute, policy #2010-2, effective August 1, 2010.

33. Maryland The Arc of Maryland called on the state to end the use of subminimum wages by 2017. The Arc calls for the plan to include: – An accurate picture of current employment, underemployment, and subminimum wage statistics for the state and also identifying measureable target goals;

34. Technical assistance, supports, and fiscal incentives to organizations currently using 14(c) employment programs to move to community- based and fairly compensated employment programs; Model Employment First policies for adoption by the community rehabilitation organizations;

35. The planned movement of individuals into employment programs embracing promising and evidence-based practices available today; Ongoing plans for baseline and trend data collection, analysis, and interpretation for purposes of continual improvement. Progress should be transparent and visible and reported in an employment dashboard; Addressing differences found in Maryland including urban, suburban, and rural settings as well as cultural and language differences found throughout the state of Maryland;

36. Imposing a mandated moratorium for transitioning youth in Maryland entering 14(c) programs; Assuring the work group disproportionately includes representative individuals and families such as transitioning youth looking for employment, individuals with I/DD currently in subminimum wage jobs, and employers.

37. Vermont Closed its last sheltered workshop in 2002 No small group employment or enclaves Average wage for folks with I/DD is $9.26 Average work week is 16 hours