Latest NCD report evaluates progress eliminating subminimum wage employment for people with disabilities

For Immediate Release                                                                          
October 16, 2018

WASHINGTON, D.C. – The National Council on Disability – an independent federal agency – today released its latest report on trends regarding American workers with disabilities being paid below minimum wage, recent policy changes impacting this employment model, and characteristics of for-profit entity use of subminimum wage work in their supply chains.

National Disability Employment Policy, From the New Deal to the Real Deal: Joining the Industries of the Future provides compelling findings from a national study of an 80-year old disability employment service model that has struggled to keep pace with a changing legal, policy, and employment environment.

The study also includes initial examination of instances in which for-profit companies utilize contracts that employ people with disabilities paid below the minimum wage in their supply chains –sometimes unknowingly. There are approximately 321,000 people with disabilities legally paid below the minimum wage in America today under the 14(c) provision of the Fair Labor Standards Act.

From the New Deal to the Real Deal is a follow-on study to NCD’s 2012 report, Subminimum Wage and Supported Employment, in which NCD recommended the phase out of FLSA’s Section 14(c), which in 1938 made legal the payment of subminimum wages to people with disabilities, and the phase in of supported employment options for people with disabilities.

Six years later, NCD renews its previous recommendations; evaluates the progress that the country has made toward that end; highlights the structural barriers that remain; and clearly identifies the risks should service systems not modernize. This report also highlights several successful examples of transformation in which providers have transitioned away from providing services in segregated settings that paid 14(c) subminimum wages to contemporary models of individualized supported and customized employment services that allow people with disabilities to work and thrive in competitive integrated employment (CIE).

Findings and recommendations in From the New Deal to the Real Deal are the result of site visits in six states and interviews with over 160 people in 26 states representing people with disabilities, their families, employers, advocates, supported employment service providers, direct support staff, private industry representatives, employer associations, university centers for excellence, technical assistance centers, sheltered workshop providers and their employees, institutions, federal and state agencies, protection and advocacy organizations, entrepreneurs, foundations, and other national and local subject matter experts.

“I am tremendously proud of this report because it draws attention to an outdated system that has resulted in the wasted lives, lost potential, and the unrealized hopes and dreams of people with disabilities, and instead shines light on a modernized approach that is in line with the high expectations that people with disabilities have for themselves,” said NCD Chairman Neil Romano.

Highlights of the report’s recommendations to improve opportunities for CIE, self-employment, and entrepreneurship for people with disabilities include:

• Phasing out of 14(c) on a six-year timeline, concurrent with a “phase-up” of systems changes necessary to bring people with disabilities into CIE.
• Department of Labor issuing a two-year moratorium on any new 14(c) certificates
• Increasing oversight of the existing 14(c) system until phase-out is complete.
• Retaining the current definition of CIE used by the Department of Education’s Office of Special Education and Rehabilitative Services’ regulations and guidance to build on systems-change success.
• Amending the Javits Wagner O’Day Act, which requires all federal agencies to purchase certain supplies and services from nonprofits that employ people who are blind or have significant disabilities, to better support employment of people with disabilities in CIE.

The report also makes data-driven observations on the need to build capacity and infrastructure for supported employment services; to change pay structures to promote recruitment, retention and advancement of a skilled labor force that can provide supported employment and related services; and to make improvements to the processes of vocational rehabilitation and other employment service providers who support people with disabilities.

Read the report at ncd.gov/publications/2018/new-deal-real-deal.

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About the National Council on Disability (NCD): First established as an advisory Council within the Department of Education in 1978, NCD became an independent federal agency in 1984. In 1986, NCD recommended enactment of an Americans with Disabilities Act (ADA), and drafted the first version of the bill which was introduced in the House and Senate in 1988. Since enactment of the ADA in 1990, NCD has continued to play a leading role in crafting disability policy, and advising the President, Congress and other federal agencies on disability policies, programs, and practices.