This would impact organizations in Dayton, Springfield and Lebanon that participate in the federal program along with 45 other employers across Ohio.
Some day service providers who work with people who have disabilities say this change could eliminate opportunities for people seeking employment, while disability rights advocates are pushing for equal pay for equal work.
“This is a challenging topic,” said Pamela Combs, the superintendent of the Montgomery County Board of Developmental Disabilities Services. “We understand both points of view — that there are people who rightfully believe that everyone should be paid at least a minimum wage for their work. But then on the other hand, we do have our families and those that we serve who believe that employers will not employ people with developmental disabilities if they cannot meet competitive expectations.”
Subminimum wage
Section 14(c), which is a part of the Fair Labor Standards Act of 1938, permits employers to pay subminimum wages to workers whose disabilities impact their productivity for the specific work performed, but only if the employers hold a special certificate under the U.S. Department of Labor’s hours and wages division.
At the time it was created, the program was intended to help disabled soldiers, but it has since moved away from providing work to just veterans.
The 14(c) program has been criticized by advocacy groups for paying people with disabilities, at some establishments, pennies on the dollar.
A 2021 report by the U.S. Government Accountability Office found that most 14(c) workers earned less than $3.50 per hour, while about 14% earned at or above the federal minimum of $7.25.
Community rehabilitation programs provide daytime services to individuals with disabilities and represent the vast majority of 14(c) employers, according to Disability Rights Ohio executive director Kerstin Sjoberg.
“These sheltered workshops aren’t a typical employer in the way that you would normally think about it: like a company that has a product that needs employees,” she said. “It’s a nonprofit that wants to help people with disabilities learn skills, get jobs.”
Members of Disability Rights Ohio are among dozens of groups that make up the 14(c) Task Force that’s in support of the removal of the state’s subminimum wage program.
“The vast majority, if not all, people with disabilities can work at some level,” Sjoberg said. “If they are matched with something that is good for their skills and interests, if they’re given the accommodations they need to make that job work, they work and they work well.”
But changes could be coming to 14(c) on the national level, as well.
Changes discussed
Federal officials last fall announced the labor department would be reviewing the program.
This study includes stakeholder meetings with workers with disabilities, their families, organizations that hold 14(c) certificates and other groups that work with people with disabilities.
The review is analyzing options for competitive employment, the experiences of states that have expanded or prohibited subminimum wage and the potential impact of ceasing the issuance of 14(c) certificates.
Fifteen states have passed laws eliminating their 14(c) programs, and Ohio could join the list.
Republican Warren County lawmaker P. Scott Lipps is co-sponsoring legislation that proposes a five-year phase-out of subminimum wage in Ohio.
House Bill 427, introduced in April, would phase out the state’s 14(c) program over a five-year span and prohibit the Ohio Department of Commerce from issuing or renewing certificates.
Current 14(c) certificate holders would also be required to submit a transition plan to the Ohio Department of Developmental Disabilities if the bill passes.
“HB427 is the starting point of an important conversation in workforce development, which is how can we best support Ohio’s (developmental disabilities) community and transition it into the 21st century,” Lipps said in sponsor testimony about his bill.
Jan Dougherty, co-president of the Ohio chapter of the Association of People Supporting Employment First (APSE), said she and others on the 14(c) Task Force are excited to see the legislation progress.
APSE is an organization that advocates for people with disabilities to have equal access to opportunities in the workplace.
14(c) program shrinking
It’s difficult to determine the exact number of people working under the subminimum wage program in Ohio, Dougherty said.
The U.S. Department of Labor reports the number of certificate holders by state monthly, but employers with a “pending” certificate are not required to report the number of people they employ under 14(c).
There has been a steady decrease in the number of active certificates and the average number of individuals served by the 14(c) setting, according to the APSE.
From 2018 to 2023, the number of total certificates nationally dropped from 1,449 to 773. This meant a 64% drop in the number of people employed by 14(c) certificate holders, too.
The Government Accountability Office reported this decline may be the result, in part, of federal and state policies restricting the payment of wages below the federal minimum.
Combs said many county disability boards, too, have expanded competitive job opportunities in their communities, and state-led programming also exists to help move people from subminimum wage to competitive pay.
Nearly 50 locations in Ohio have either active or pending 14(c) certificates as of this month. Three of these workshops are located in this eight county region.
The labor department reported more than 2,600 14(c) workers under active certificates in Ohio, but APSE estimates 3,500 workers in totality.
For Montgomery, Greene, Butler, Warren and Clark counties, more than 80 employees are working under 14(c) certificate holders, according to the U.S. Department of Labor.
And that figure only accounts for the two active certificate holders — Better Living Homehealth Supplies in Dayton and Production Services Unlimited Inc. in Lebanon — not the pending license requested by TAC Industries in Springfield. Archived reports show TAC employed 69 people through the 14(c) program in May.
Production Services Unlimited did not return calls for comment for this story. TAC declined to be interviewed.
‘14(c) gives us those opportunities’
The sole 14(c) certificate holder in Montgomery County is Better Living Homehealth, which operates a day service location for people with disabilities on Kuntz Road in Dayton.
Better Living provides both 14(c) and competitive work to dozens of people with developmental disabilities, according to marketing manager Tracy Schoby.
The day center employs 31 people under its 14(c) certificate, according to the day service provider.
Better Living has multiple companies that contract with it for work. Projects assigned to the 14(c) workers can include assembling boxes, putting screws or nails into plastic bags, folding instruction sheets for packaging and more.
“Those are the kind of jobs that we end up with,” she said. “There’s not a machine that can do it, but it’s something that is labor intensive and it’s something our guys can do.”
Pay for 14(c) workers is not calculated by time and a set wage; rather, it’s measured by the number of steps they can complete for a job and their productivity over a period of time.
Workers are paid every two weeks, and payment ranges from $21 to $400 depending on the individual. Some 14(c) workers choose to work under a certain number of hours each week to maintain their public benefits, and Schoby says the day center is willing to work with any of its patrons who are seeking work opportunities.
Years back, many workshops that serve people with disabilities were able to send out groups of their patrons to local businesses to work. Those relationships have dwindled, and many patrons also cannot or don’t want to go out into public spaces for a variety of reasons.
“If you want to work and we have a way to get you to work, we’re going to find it,” she said. “But 14(c) gives us those opportunities.”
Schoby estimated that they’d likely lose the opportunity to employ 15 people if the 14(c) program were to be eliminated.
“It would really hurt the folks who want to work, but don’t want to or can’t work all the time,” she said. “They’re going to have to be able to do the entire job, or nothing at all.”
But day programming isn’t going anywhere, regardless of the presence of the 14(c) program. Day services are mandated by the state in order to meet Medicaid requirements.
When workers are not assigned tasks, they can be found all throughout the center playing basketball, listening to stories, or even out in the community during a Better Living field trip to a local lunch spot.
“The services are going to continue, they’re just going to look different,” she said.
Support for families, workers
Dougherty, who is also the mother of a son with a disability, said subminimum wage devalues people with disabilities and puts their capabilities in a box. But the system has also built anxiety into families surrounding work.
“There’s so much fear,” she said. “They think, if they leave the workshop, they’ll never get to come back to see their friends. Or they have the fear of losing their benefits. They fear bad things happening in the workplace. There’s all these things the system tells us that no one ever tells you on the other side.”
If subminimum wage were phased out in the state or on a national level, the Montgomery County Board of Developmental Disabilities Services would work with providers and individuals on a case-by-case basis, officials said.
The state also has a support system in place for subminimum wage workers. Works4Me, a part of Opportunities for Ohioans with Disabilities, assists adults and out-of-school youth with disabilities in completing activities that help with securing competitive employment.
Ohioans who are eligible for vocational rehabilitation services and currently working in a subminimum wage setting or contemplating working in a subminimum wage setting for the first time can be helped by this program, according to Opportunities for Ohioans with Disabilities.
In addition, approximately 300 people have been working in competitive employment in Montgomery County through the support of their local board of developmental disabilities. These jobs pay minimum wage as their starting pay, Combs said.
These workers have job coaches and other long-term support funded through the developmental disabilities board and are placed with employers that can use the person’s skill sets and interests. Major employers that work with the county’s developmental disability board are grocery chains Meijer and Kroger.
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