One of the nation’s best-known charities is paying disabled workers as little as 22 cents an hour, thanks to a 75-year-old legal loophole that critics say needs to be closed.

Goodwill Industries, a multibillion-dollar company whose executives make six-figure salaries, is among the nonprofit groups permitted to pay thousands of disabled workers far less than minimum wage because of a federal law known as Section 14 (c).  Labor Department records show that some Goodwill workers in Pennsylvania earned wages as low as 22, 38, and 41 cents per hour in 2011.

Section 14 (c) of the Fair Labor Standards Act, which was passed in 1938, allows employers to obtain special certificates of Minimum Wage from the Department of Labor.  The certificates give employers the right to pay disabled workers according to their abilities, with no bottom limit to the wage.  Most, but not all, special wage certificates are held by nonprofit organizations like Goodwill that then set up their own so-called “sheltered workshops” for disabled employees, where employees typically perform manual tasks like hanging clothes.

The non-profit certificate holders can also place employees in outside, for-profit workplaces including restaurants, retail stores, hospitals and even Internal Revenue Service centers.  Between the sheltered workshops and the outside businesses, more than 216,000 workers are eligible to earn less than minimum wage because of Section 14 (c), though many end up earning the full federal minimum wage of $ 7.25.  When a non-profit provides Section 14 (c) workers to an outside business, it sets the salary and pays the wages.  For example, the Helen Keller National Center, a New York school for the blind and deaf, has a special wage certificate and has placed students in a Westbury, N.Y., Applebee’s franchise.  The employees’ pay ranged from $3.97 per hour to $5.96 per hour in 2010.  Helen Keller also placed several students at a Barnes & Noble bookstore in Manhasset, N.Y., in 2010, where they earned $3.80 and $4.85 an hour.   Many businesses that follow this practice by saying that this gives people with disabilities opportunities to work and feel worthwhile.

Most Section 14 (c) workers are employed directly by nonprofits.  In 2001, the most recent year for which numbers are available, the GAO estimated that more than 90 percent of Section 14 (c) workers were employed at nonprofit work centers.

Critics of Section 14 (c) have focused much of their ire on the nonprofits, where wages can be just pennies an hour even as some of the groups receive funding from the government.  At one workplace in Florida run by a nonprofit, some employees earned one cent per hour in 2011.

Defenders of Section 14 (c) say that without it, disabled workers would have few options. A Department of Labor spokesperson said in a statement that Section 14 (c) “provides workers with disabilities the opportunity to be given meaningful work and receive an income.”

Terry Farmer, CEO of ACCSES, a trade group that calls itself the “voice of disability service providers,” said scrapping the provision could “force [disabled workers] to stay at home,” enter rehabilitation, “or otherwise engage in unproductive and unsatisfactory activities.”

Salaries for CEOs of the roughly 150 Goodwill franchises across America total more than $30 million.  And Goodwill and the organizations that run the sheltered workshops are not alone in their support for Section 14 (c).  In many cases, the families of the workers who have severe disabilities say their loved ones enjoy the work experience enjoy getting a paycheck, and the amount is of no consequence.

But hopes for a new bill that’s now before Congress that would repeal Section 14 (c) and make sub-minimum wages illegal across the board.  The bill is opposed by trade associations for the employers of the disabled, and past attempts to change the law have failed.

What an outrage this is to all disabled workers and disabled people.  All these companies who say they will only continue to hire handicapped workers, if they can continue to pay them sub levels of income are treating these people as second hand citizens.  No matter what excuse they use to try to justify this practice and its continued legality, it comes down to just one thing…greed.

These companies are exactly like those that shipped their businesses overseas, so that they could cut their labor costs down to pennies and you can all thank each other for allowing this to happen.

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