Bill banning paying disabled less takes effect this month

 

Laura Randa started her search for a new headquarters with a list of 232 possible locations across the country before Delaware jumped to the top of the list.

“Our final decision to move Toivoa and Toivoa Coaching’s headquarters to Delaware was made when Delaware passed legislation to eliminate subminimum wage for people with disabilities,” Randa said.

“We hope to make Delaware the capital of the digital therapeutics industry,” she added. “That includes training and hiring 1,000 certified mental-health coaches over the next decade” to address the nationwide shortage of mental-health clinicians.

Section 14(c) of the Fair Labor Standards Act authorizes employers, after receiving a certificate for the U.S. Department of Labor’s Wage and Hour Division, to pay wages less than the Federal minimum wage to workers who have disabilities for the work being performed.

The General Assembly in late June 2021 passed legislation in a near unanimous vote to phase out subminimum wages.

Final implementation will happen at the end of January. The bill was named the Jamie Wolfe Employment Act in honor of the tireless advocate of rights for Delaware’s disabled who passed away in 2018.

“We adopted a delayed approach to implementation to allow both workers with disabilities and employers a transitional period,” said House Sponsor Rep. Debra Heffernan (D-6), whose district covers much of Northeast Wilmington. “This was to help facilitate a smooth transition, enabling individuals with disabilities and their families to find meaningful employment or training in a new setting.”

Heffernan said “jobs for people with disabilities has been a prime focus for me since first being elected. One of my first bills, in 2012, transformed Delaware into an Employment First state.”

Individuals with disabilities in Employment First states receive state services, including members of the service-related industry. 

They are considered for placement in integrated employment making minimum wage or above before other placements (such as in sheltered workshops).

“Having a job is one of the most important steps to living a productive and independent life,” Heffernan said. “Paying a worker with disabilities less than minimum wage is pure and simple discrimination. Getting rid of the subminimum wage and sheltered workshops allows our state to acknowledge the value of every Delawarean with and without disabilities.”

“We have seen a few employers drop out of the program and a few more cutting back on how many they hire,” said Jim Greenwell, vice president of finance for Milford-based Kent-Sussex Industries. 

It is a private nonprofit vocation rehabilitation organization that provides employment and training services to individuals with intellectual, mental, physical, and emotional disabilities who live in Kent, Sussex, and lower New Castle County.

Greenwell said KSI has about 90 program participants at different stages of entering the workforce. About one-third are working in the community for 20-40 hours per week. 

KSI has been paying in-house program participants the minimum wage for the past eight years or so, he said.

The General Assembly passed a bill in June 2021 that would raise the minimum wage by at least $1 per year until the state rate reached $15 in January 2025. Since the start of 2021, Delaware’s minimum hourly rate has increased from $10.50 to $13.25 as of January 1, 2024.

 “We are a little smaller as an organization than we were eight years ago, but I think we’re doing pretty well,” Greenwell said. “We’re seeing a little bit less of a hand-up with fewer opportunities than eight to 10 years ago, but [eliminating the subminimum wage] means the disabled can receive a more competitive wage that allows for greater independence for those who work.”

Toivoa and Toivoa Coaching are working with University of Delaware Professor Rita Landgraf to launch a 12-week program in the next few months that will certify disabled participants as coaches to help others with disabilities struggling with mental-health issues.

In addition to Landgraf’s teaching duties in the Health Behavior & Nutrition Sciences area, she also is director for UD Partnership for Healthy Communities. Landgraf previously served as Delaware’s Secretary for Health and Social Services under former Gov. Jack Markell.

The federal law allowing the disabled to be paid less was passed in 1938, and the new law follows a 2020 recommendation by the U.S. Commission on Civil Rights that 14(c) certificates be phased out.

For disabled, work is work

Delaware has nearly 200,000 residents with some kind of disability, according to the Centers for Disease Control and Prevention, said Randa, who is also a board member of the American Association of People with Disabilities (AAPD).

A far lower number are employed under 14(c) certificates.

The disability association in November 2023 joined 25 disability organizations to send a letter to the Department of Labor calling for an end to the practice of paying workers with disabilities less than their peers.

“People with disabilities deserve to be paid a fair wage regardless of their work environment,” said Maria Town, the association’s president and CEO. “This practice has endured for 90 years. It’s time for it to end.”

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Over the past five years, the business case for hiring persons with disabilities has become even stronger, according to a research study released in November 2023 by Accenture in partnership with Disability:IN and AAPD.

Specifically, companies that have led on key disabled inclusion criteria over that time saw 1.6 times more revenue, 2.6 times more net income, and two times more economic profit than other companies surveyed, the report said.

Nationwide, workers with disabilities in 2020 were paid 74 cents on the dollar compared to their non-disabled peers, according to the progressive Century Foundation.

“New research from the Government Accountability Office shows that the average wage of [the 120,000] people with a disability working under a 14(c) certificate was less than $3.50 per hour, less than half of the federal minimum wage,” the AAPD letter said.  

The letter went on to say research from U.S. Commission on Civil Rights also shows that Section 14(c) has often resulted in the segregation of disabled people into sheltered workshops, despite the fact that integrated employment and community settings are more beneficial and productive for all workers.

Peter Osborne is an experienced business journalist and ghostwriter and consultant who helps executives and businesses raise their visibility.