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<b>Some disabled workers paid just pennies an hour – and it's legal<br>
<i>By Anna Schecter, Producer, NBC News<br>
</i></b>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.<br>
<br>
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.<br>
<br>
"If they really do pay the CEO of Goodwill three-quarters of a
million dollars, they certainly can pay me more than they're
paying," said Harold Leigland, who is legally blind and hangs
clothes at a Goodwill in Great Falls, Montana for less than minimum
wage.<br>
<br><br>
"It's a question of civil rights," added his wife, Sheila,
blind from birth, who quit her job at the same Goodwill store when her
already low wage was cut further. "I feel like a second-class
citizen. And I hate it." Section 14 (c) of the Fair Labor Standards
Act, which was passed in 1938, allows employers to obtain
<a href="http://www.dol.gov/whd/regs/compliance/whdfs39.pdf">special
minimum wage certificates</a> 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.<br><br>
<br><br>
Most,
<a href="http://www.dol.gov/whd/specialemployment/BusinessCertList.htm">
but not all</a>, 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.<br><br>
<br><br>
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.<br>
<img src="cid:7.1.0.9.2.20130621105908.0150ef68@visi.com.3" width=380 height=244 alt="Description: http://msnbcmedia.msn.com/j/MSNBC/Components/Photo">
<br><br>
<div align="right"><b>NBC News<br><br>
</div>
Harold Leigland, who is blind, with his guide dog on the bus during his
morning commute to the Goodwill facility in Great Falls, Montana, where
he works hanging clothing.<br><br>
</b>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. The franchise told NBC News it has also hired
workers at minimum wage from Helen Keller. A spokesperson for Applebee's
declined to comment on Section 14 (c).<br><br>
<br><br>
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. A Barnes & Noble spokeswoman defended the Section 14 (c)
program as providing jobs to "people who would otherwise not have
[the opportunity to work]."<br><br>
<br><br>
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.<br><br>
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.<br><br>
<br><br>
"People are profiting from exploiting disabled workers," said
Ari Ne'eman, president of the Autistic Self Advocacy Network. "It is
clearly and unquestionably exploitation."<br><br>
<br><br>
Defenders of Section 14 (c) say that without it, disabled workers would
have few options. A Department of Labor spokesperson said in a statement
to NBC News that Section 14 (c) "provides workers with disabilities
the opportunity to be given meaningful work and receive an
income."<br><br>
<br><br>
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."<br><br>
<br><br>
Harold Leigland, however, said he feels that Goodwill can pay him a low
wage because the company knows he has few other places to go. "We
are trapped," he said. "Everybody who works at Goodwill is
trapped."<br><br>
<br><br>
Leigland, a 66-year-old former massage therapist with a college degree,
currently earns $5.46 per hour in Great Falls.<br><br>
His wages have risen and fallen based on
<a href="http://www.dol.gov/elaws/esa/flsa/14c/18c4.htm">"time
studies,"</a> the method nonprofits use to calculate the salaries of
Section 14 (c) workers. Staff members use a stopwatch to determine how
long it takes a disabled worker to complete a task. That time is compared
with how long it would take a person without a disability to do the same
task. The nonprofit then uses a formula to calculate a salary, which may
be equal to or less than minimum wage. The tests are repeated every six
months.<br>
<img src="cid:7.1.0.9.2.20130621105908.0150ef68@visi.com.4" width=380 height=294 alt="Description: http://msnbcmedia.msn.com/j/MSNBC/Components/Photo">
<br><br>
<div align="right"><b>NBC News<br><br>
</div>
Harold Leigland works at the Goodwill facility in Great Falls, Montana,
where he earns $5.46 an hour.<br><br>
</b>Leigland's pay has been higher than $5.46, but it has also dropped
down to $4.37 per hour, based on the time-study results.<br>
He said he believes Goodwill makes the time studies harder when they want
his wage to be lower.<br><br>
"Sometimes the test is easier than others. It depends on if, as near
as I can figure, they want your wage to go up or down. It's that
simple," he said.<br><br>
<br><br>
His wife, Sheila, 58, spent four years hanging clothes at the Great Falls
Goodwill for about $3.50 an hour. She said the time study was one of the
most degrading and stressful parts about her job. "You never know
how it's going to come out. It stressed me out a lot," she
said.<br><br>
<br><br>
She quit last summer when she returned to work after knee surgery and
found that her wage had been lowered to $2.75 per hour, a training
rate.<br><br>
<br><br>
"At $2.75 it would barely cover my cost of getting to work. I
wouldn't make any money," she said.<br><br>
<br><br>
Harold said he believes Goodwill can afford to pay him minimum wage,
based on the salaries paid to Goodwill executives. While according to the
company's own figures about 4,000 of the 30,000 disabled workers Goodwill
employs at 69 franchises are currently paid below minimum wage, salaries
for the CEOs of those franchises that hold special minimum wage
certificates totaled almost $20 million in 2011.<br><br>
<br><br>
In 2011 the CEO of Goodwill Industries of Southern California took home
$1.1 million in salary and deferred compensation. His counterpart in
Portland, Oregon, made more than $500,000. Salaries for CEOs of the
roughly 150 Goodwill franchises across America total more than $30
million.<br><br>
<br><br>
Goodwill International CEO Jim Gibbons, who was awarded $729,000 in
salary and deferred compensation in 2011, defended the executive
pay.<br><br>
<br><br>
"These leaders are having a great impact in terms of new solutions,
in terms of innovation, and in terms of job creation," he
said.<br><br>
Gibbons also defended time studies, and the whole Section 14 (c)
approach. He said that for many people who make less than minimum wage,
the experience of work is more important than the pay.<br><br>
<br><br>
"It's typically not about their livelihood. It's about their
fulfillment. It's about being a part of something. And it's probably a
small part of their overall program," he said.<br><br>
<br><br>
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.<br>
<img src="cid:7.1.0.9.2.20130621105908.0150ef68@visi.com.5" width=380 height=271 alt="Description: http://msnbcmedia.msn.com/j/MSNBC/Components/Photo">
<br><br>
<div align="right"><b>NBC News<br><br>
</div>
Sheila Leigland, who is blind, with her guide dog. She quit her job at
Goodwill in Great Falls, Montana, after her hourly wage was lowered to
$2.75.<br><br>
</b>"I feel really good about it. I don't have to worry so much
about him," said Fran Davidson, whose son Jeremy has worked at
Goodwill in Great Falls, Montana, for more than a decade. "I know
he's not getting picked on, and he's in a safe place. He enjoys what he's
doing, and he's happy, and that's what we like for our kids." Jeremy
started out working for a sub-minimum wage but did well on his last time
study and is currently earning $7.80 an hour, Montana's minimum
wage.<br><br>
<br><br>
But foes of Section 14 (c) have 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.<br><br>
<br><br>
"Meaningful work deserves fair pay," the sponsor of the bill,
Rep. Gregg Harper, R.-Miss., told NBC News. "This dated provision
unjustly prohibits workers with disabilities from reaching their full
potential."<br><br>
<br><br>
The bill is opposed by trade associations for the employers of the
disabled, and past attempts to change the law have failed. But Marc
Maurer, president of the National Federation of the Blind and a foe of
the sheltered workshop system, is cautiously optimistic that this time
the bill will pass, and end what he called a "two-tiered
system."<br><br>
<br><br>
That system, explained Maurer, says "'Americans who have
disabilities aren't as valuable as other people,' and that's wrong. These
folks have value. We should recognize that value."<br><br>
<i>Monica Alba contributed to this report.<br>
</i> <br>
Video:
<a href="http://www.nbcnews.com/video/rock-center/52257275/">
http://www.nbcnews.com/video/rock-center/52257275/</a><br>
<br>
<br>
<br>
<br>
Mr. Anil Lewis, M.P.A.<br>
<br>
“Eliminating Subminimum Wages for People with Disabilities” <br>
<a href="http://www.nfb.org/fairwages" eudora="autourl">
http://www.nfb.org/fairwages<br>
</a>Work: 410-659-9314 ext. 2374<br>
Twitter: @anillife<br>
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