Table’ 8. nual operating, ‘expesditurés by . type of Program , i .
abt

: id type of. expendigire, 19 7 ’ > ae tre,
v . : y ° . Bara woe - 3 Average
cee et Program and} NO ak Aggregate # Perg » per.
“type oF expend?ture : i mouge- _ work: op: a
. y ~|: _— = Cin" thovsands) total: : (in thoujands) q -
“ALI workshops/at1 ’ eos 2 Te
oPfant ; 8 te 3 305750 i3-; p6i TS
. Equipment ’ . qa. 6,544-. - 2°,
; Wage’ and. salaries : a aod 216,376 “+58” To ge
..Fringe benefits . We et "18,49; Be wel2 ¥
- Cost of prodict terials oe, ~ 51,007 - 2 14 . ao “
Other work Program“@Xpense. =, t 9802 toa 0 pose Fy
Supportive activities expefise ~ 420° tgs
- Total expenditures -, _ 30 199° 004 - 207 Bye
- Regular, program workghops - . oo! _ me
Plant -: . 6 630 ue. -
"> Equipment oa Qo, , * 4,340 .
» Wages. and ‘slardes foots : ~ 187, 56]
~~, Fringe benefits . _ 4

- Cost of production naterials
Other work program expense
‘= Supportive activities ex pense
Total expendi tures

. fe
“Work activities enters -
ant
Equipment | ot . .
* Wages“and'salartes *. (tt.
Fringe -bénefits a

# - Gost of production materials
” Other ork program expense a a
a Supe tive’ activities expense” . » a
. 1 expenditures’ vos

or

“eo Tra Thd/or evaluation piogregs .
© Plant ,

a orn
: Equipment” - . : a a
Wages’ and safaries * ot. a fos 78°. 6
Fringe benefits .? \ tos

-. Cost of production naierials
oipes, work program expense “a
: portive activities’ expense

‘A _ Total. WL exvenct tures

I WBH

“ye

ag oe Rppenitx TabTeE 52-51 EC coe

Woter” nts may not add to total because “ofgrounding, Averages may not. +
“oo ait 0. total because of differences: in, Tuner of workshops reporting. items.”

os 63

rol, 7 eh v at



- et
‘XI, OTHER ISSUES

' The Sheltered Workshop Survey had ag its major function
the collection of data gn the Operation of the workshop but
a secondary purpose was to, solicit the opinion of workshop
directors regarding three speciad concerns:

‘ a ..
tt .. The effects of the’1966 Amendments to the FLS,
: in the establishment of the work activities
center as a program Separate. from the regular
program’ workshop; . .

+ he advisability of a waye subsidy or supplement ,
for severely handicapped persons employed in
workshops who were unable,to earn the statutory:

+ minimum wage bécause of their physical or mental
limitation; and 7 wo

. + The elimination of: the term "sheltered" in ,
reference to workshops for disabled/handicapped
, ~ workers. * a “
~

. oA. Impact of 1966 FLSA Amendments of Work Activities ,
- Centers Ln , . . " Lop

iY . 7 .
The response was restricted to certificated workshops,

the ones most affected by the establishment 3£ the new

~ ¢goncept. Respondents were divided into two groups: Nork-
shop establishments operating work activities centers only
and, those operating dual programs (regular program workshops
and{work activities centers . . a .

x ‘ .

- Both groups had almost identical responses to all
questions, About three-fourths felt ‘that the work activities
center concept was both necessary and 'beteficial in relation
to the needs of handicapped clients (Appendix ‘table 140).-

The regulations of the Secretary of Labor establish,
criteria based on client earnings and productivity for
. determining whether facilities qualify as a work activities
center. . Regulations in effect at the time iy the study
(1973) stipulated that average annual clien
. could not exceed $850, or if the wage payments to clients
- were primarily based on piece-rates, average annual, client
2 earnings could not exceed $600. The criteria were designed
« , to assure that higher functioning clients were properly

143.

those operating Under the FLSA program, because, they were ,

productivity | ~



/

«0 ° - .
The motivation for the Greenleigh Study was based on

testimony during the Congressional hearings pertaining to
Rehabilitation -Act Amendments which suggested that;°

> ~ workshops provide s'

. wages; ~ . .

» = Capable clientsare not placed in competitive
employment by/ workshops; and :

- long-term or extended employment in workshops

. ‘lagks dignity as human services outcome. -

par ‘working conditions and
.

The findings of the Greenleigh Study generally serve‘as
reinforcement for the conclusions of the DOL, Workshop Study
and are referenced -as appropriate in the main body of the .

report. Of special interest was*the multi-faceted role of

. the Sheltered workshog which émerged froit the “study: ~*~
,

: As a provider of rehabilitation services and/ér
* problem reduction to individual handicapped
: °

_ . clients; ue
- - + As a deyelopet of job opportunities and Place-~
“ ment for handicapped clients in*the competitive
 ] a employment market;

As an employer, for severely himited clients and
others for whom job Opportunities do not exist®>
> .in-the communit¥; and‘ ? _

+ As a socialization, information and recreation
r center for handicapped people who have very

‘ limited access to the rest of the munity in
moe which they reside, . pee ]
~ \

., ' 2. The “Comprehensive: Needs Study ‘of $ndividuals with
the Most Severe Handicaps" by the Urban Institute was
designed to identify the most severely. handicapped Popula-
tion and to evaluate the feasibility of serving this gyoup
ma ithout having vocational objectives. his group included
- only those’-persons whose handicapping -condition was so
evere that they could not reasonably be expected to be.
rehabilitated -for employment, but for whom a’ program of
rehabilitation services could improve tReir ability to live
independently and ‘functian normally within their family and
conmunity. : ‘ wt .

wet

. The ‘study was’ conducted through data file analysis
(including a review of state rehabflitation agency client
‘ files), client surveys, a review of.existing literature and
constituency impact, assessments. . .

we



"SHELTERED WORKSHOP STUDY = st cD

A Nationwide Report: on Sheltérea Workshops and their
Employment of Hagdicapped Individuals

Pa

aie

Jue 1977 ; ’
sos . 2 US DEPARTMENT OF HEALTH,
; Chuctionaweieeae :

-

YF ras oocumENT was BEEN REPRO-
OUCED EXACTLY AS RECEIVED FROM
THE PERSON OR ORGANIZATION ORIGIN:
" " ATING 1T POINTS OF VIEW OR OPINIONS.
. 3 STATED DO NOT NECESSARILY REPRE-
SENT OF FICIAL NATIONAL INSTITUTE OF

EDUCATION POSITION OR POLICY»

0

ba

. ,

d

.

. a V,

a VORUME |
|= ~. . WORKSHOP SURVEY
Po,

U.S. DEPARTMENT OF LABOR

“EMPLOYMENT STANDARDS ADMINISTRATION

EMPLOYMENT AND TRAINING ADMINISTRATION o



te wv. ; .. a :

. centers, representing 16 percent of total staffing. By way
of comparison volunteers accounted for 12 reent of all
‘ staff ih regular program workshops and @ pexcent in training
. and/or evaluation programs -~- supplementing administrative
and professional staff.in a majority of the programs
(Appendix tables 77=80). °° :
. = :

. Heo . . a4. .
ae Training and/or evaluation programs were lowest of the
\ three programs in professional and administrative staff
- ratios (clients per “staff person), refleeting the greater
emphasis on services. Work activities centers were highest
din all types of staff, « nt

SoA The ‘ratio of total staff to\clients was about 1:3 in

+"—“~tregular program workshops with the mentally retarded group
having a slightly higher client/rate and the blind group
lower than the norin, (Appendix, #able'81).° ~

’ The mentally retarded asd men ha ifindss groups showed
. + * the lowest staff-client ratio (fewer clients per staff
. person), the reverse of regular ae workshops.

The mental @11ness group also had the most favorable
ratio (1:4) in the training ahd/or evaluation programs.
ed e =

=f
fe

B. Professi Mal Staff .

too, .
pisos . Thé questionnaire listed sixteen -types of professional:
so staff positions. Relatively few of the workshgps failed to

report professional staff and a ‘majority of workshops
j@S ' reported full-time -or. part-time/staff in about half the

professional staff positions listed. Certificated workshops
showed a pattern of staffing in| which a higher percentagé
~ had part-Fine professional staff personnel than full-time
. in a majority of the occupations (Table 19). : -

, : eed ao :
The most common staff ‘position was evaluator. Three-
. fifths of the regular program workshops, half of the work |
9 ‘activities centérs and four-fifths of the training and/or ~
.evaluation programs reported ¥s tape of staff (some work-
shops had both part-time and’ full-time personnel).

. Vocational cdunseling was next, followed by job .
placement specialist; these positions were found more
‘frequently in training. and/or evaluation programs. Work

- activities. centers were consistently lowest in all types of
professional staffing. | so

estat
pe



. Regular program workshops

‘the generally per eived level of function’ of olients in the

ao
a te .

2... Ratio of annual client earnings to ‘het income from
work program .

Net income was determined by subtracting expenditures .
fdr productign matemals and supplies from-gross income .
from the work program. The ratio of client earnings to net |
income, also’known as the "payout ratio", is one of, the .
indicators of adequacy of client wage paymerits considered -
by DOL field staff in evaluating the workshop program. an
* -
Regular program workshops averaged a payout yatio of
50 percent and work activities centers and training and/or .
evaluation programs averaged paying approximately two-thirds
of net -income in:wages to clients (Appendix tables 47 and 56).

3. “Ratio of annual client wages to total wage and
salary expenditures . .
Fy

Wages @aid to clients’ in regular program workshops. _
represefited, 53 percent of total wage and salary:expense,
28 percent’ in ‘work activities centers and 39 percent in

. training and/or evaluation programs (Appendix table 59).

4.. Average annual productivity of clients

Client” produét}vity was determined by dividing annual
gross work program income less cost of purchased materials
by the average daily client attendance for each type .of :
program (Appendix tables 47 and 56): 7 .

. Average annuéi-

. re so productivity
All programs ; $1,846

3,992 t

Work activities cénters  - .

Training and/or evaluation programs

~ %
The average annual productivity of clientsehin work aa
activities centers was only 12 percent of’ that fof clients in
regular program workshops, and clfents in training and/or
evaluation programs averaged production of about one#fifth

of that ef regular program workshop clients. The produc~ ‘
tivity differences of the. three programs was consistent with

ye

. nd b . . Je



,

LL

Work ‘activities

. x ve Nt
on o
. : Q : |
, - « :
Table 11. “Average straight-time hourly earnings. of clients od
. . by'major ‘disability, and type of workshop program,
. . May 1973 . .
- . ‘+
= T — 7 .
a aa , . ’ s - . ’ «?
: ot : : Certificated a Noncertificated | 4 . :
Major ‘disability and - . workshops. . ~ "workshops aa 2
type of program : z | Average, - i + - Average ~~ : ,
/ . -__, Clients hourly-\.° | Glients howrly :
= * Num er:Percent earnings. “Number:Percent earnings Coot,
All clients , ‘ 83, org, 100 $.71 ~ 5,773. 100 sw $.71
. “7 . ‘ vos y , . . _ a
Mentally retarded. : . . , .
. Regular programTM ~~~ . . v6 re . .
workshops °, +} soe 8,246 9.9 94 oc, 910 15.8 :
“Work activities , . we . a .
«centers — 323343 ° 39,0 ° 13570: "1,716 29.7 Y :
Training pa/or . . : : Oo, . * . .
evaluation programs’ 6,449 ° 3.8 52 4 553 9.6- .
* casiatig ill ye 7 > . . .
Regular program ' * oo 7k ‘ Ltt. -
. ‘workshops 4,743, 5.7). 1.11 252° 4.4
Work“activities te o . ~ oo. ot .
‘centers . 5,312 6.4. 246 . 299° 5.2: | 48 aa
. Training and/or.’ , pe \ . é rs of
evaluation, programs 3,237 # 3.9 f ee 2 274 '4.7 . * | 1.06 a
to mo . peor . bo . : . .
‘Visually impaixed ~ . : , “ot , .
Regular program aan —_y an .
 _ workshops’ 23,598 . 1 325°." 5.6, 1.62
: 8



<7

fy

woe ¢

av ae

fe!

: oo: :

This move was accompanied -by the development of

extended: employment work activities centers. and regular :

program ‘workshops -for mentally retarded persons through

parént- association-operated “programs, '
tc. -

-_ _ ~

she
umber of Department

By’the end of fiscal year 1966~-the >

' of Labor, certificated warkshops had grown! to ‘885 employing

- an'estimated 47,412 hjiiicapped persons.’ The 1966 Amend-
ments to the Pair- Lah@J Standart Act established a wage

floor for handicapped:persons of 50, percent of the statutory

frindom wage ‘rate and a requirément for payment lof wages.’,

Commensurdte to those paid honhan@icapped workers.in indus-

‘

‘. tation, whigh had a |

try for essentially, the samé
The 1966 Amendments also,

: exceptions t¢ the 50 percent wage ‘floor:
and ther severely
. ox feraining -programs;. and empioymen
activities cen
S80, seVére as ‘tpomake, their
tial’, The FLS¥ revisions, se
for, the more productive. work
to serve tthe ‘severel
“be-mostiy tperapeutic. :
. ‘This. Rew gap tit df ‘workskidp
. profesSignhals -ahd organizations,
.’ government ‘agéncies)
“vided in workshops. Gs
vagereditation:of facilities, and‘services.
nation&l acerediting, ‘organizatiaqng; duc
On Atcreditation. of Rehabilitatian; Facil
National -Rocre@itation -Coungit for Facil
Blind and OthenwWisuaily Aandicapped LN,
trias of. Anieriga‘ (GIA), and the ‘Accre
"Facilities for. the"
of State Administrat
passed a tesolutién

it. for

y et whil
y handicapped. pérso
Cc cit

7

“4

s ‘creat

significant imp.

act. on,
id othex .tehi

abilittation fac

>

of: workshqps

ay

y handicapped’ individuals
workers ‘eiigaged in-work which ig incidental.

ed:
~ineluding
“fot the quality o@ ser
eater atterition. wai

quantity and quakity of work.
authorized’ tue establishnient of

Multi-handicapped
; handicapped .
‘to’ evaluation .
clients of work

ters whost physital or’ mental impairment is .
Productive Sapacity inconsequen-
rved"tg provide a’ wagé floor

ing‘the workshop

ss work may

aagonocyn by:

‘ederal and‘ State _
vites #eing pro-

focused of =

ough various

Jas the Commission ./

ithes. (CARF) ,. the.
ities Sérving the
IAC), Goodwill Ihdus-
; ditation’ ‘Council for”
lentally: Retarded 4ACFMR) .
ora tor; Vocational -Rehabil
in'1970. endérsing the’ need

- The. Council’
itation (CSAVR)
‘€or accredi~
. the accreditation
dlities. wl



In summary , there was not- a real consensus among

‘workshops as to the full impact of a wage subsidy. It was .
clearly-a desirable benefit for the client but might hamper
progress toward competitive employment. It was suggested:

',+that the low wages paid in the workshop had the effect of .
motivating, the client toward obtaining a better job. .
outside -- the exception might be the client for-whom the - oan
workshop provided terminal. or extended employment .

Tr@phould he noted that many regular program workshops

were already.providing a form of wage subsidy to clients
through "makerup" pay. Cliénts employed in sheltered work* .
‘shops are paid on either an hourly rate jor on a piece rate 7
basis: The, FESA ca&mtification program establishes a minimum a
hourly rate which must bé paid to all regular-clients. If
the clients working under a regular program workshop — *
certificate are paid on a piece rate bagis they mist be pail
at least an amount equal to the hourly ate stipulated. in

. the certificate; even though their piece rate earnings during
the workweek may be léss. The difference between client
vearnings on a piece Yate basis for. the week and the actual
, wages paid to the client’ constitutes, ;"Make-up" pay. There -
is no wage guarantee requirement for clients in thé work
activities center or in’ training and/or evaiuation programs. -

f

About two-fifths of the regular pfocram’ workshops
- provi make-up pay for their clients. Of the. clients
ree g make-up pay most received less than 10 cents per
‘ hour during the survey week (Appendix table 138).

. Most of the workshops. _ (78 percent}. paid the make-up +
» wages from their own funds. THey did not receive special

. +, Qrants or other subsidy for thisy purpose (appendix table .

139). 7 . . .

. . the wneed for a wage supplement or ‘subsidy was-clearly -
indicated by the study in order for the. client to achieve aie . -
goal of self support. ‘Wage data from the survey week showed
that virtually all of the céients in cértificated work on
activities centers were earning less than the FLSA minimum.: n

. rate and 93 percent earned less than half of the statutory
rate; the average heurly wage comprised’ only 23, “percent of°

o the statutory minimum, — oo ‘ a

a : In certificated regular program ‘workshops: 74 percent

of the clients had average hourly earnings below the FLSA — mo
- minimum, and 18 percent earned less than 50 percent of the .
* minimum. . _— -



. ea

Average hourly’ wages varied substantially for ‘re lax _
clients in programs ‘classified. by primary disability @toup .
.served. The range from blind group earnings of $1.72.an
hour to mentally retarded group earni@s of $1.41 repre-
sents a differential of 61 cents or 55 percent. The wage
variagge for work. activities center clients and frainees
and evaluees | was less significant. - >

‘Regular’ clients in'’workshops which’ were members of -

:Goodwill Industries of Amerjgay (GIA) or’ NationaleIndustries
for the Blind (NIB) had average earnings which were highey
thant the amount for their, group (general and blind respec— oo

tive#]). The amount: an cent increases for regular .
clients, in GIA and NIB hops werg: greater than the total
regular ¢lient group ‘for the 1968- “1973 3 periods .
. sess e - .
8s ~ re ~~ 7

‘
*
«

a a.



-. 4 . . .

. Eighty/percent of the cliénts were served in privately

: operated workshops and 20 percent in publicly operated work~

shops. A major portionsqf the clients in publi¢ly operated

+ workshops were in work activ#ties centets and two-thirds of .
these. centers served primarily mentally -retarded persons.

Only seven percent of the clients weré ‘served in
noncertificated programs except that 17 percent of the
* clients in single program regular program workshops and 38
percent of the clients in-single program training and/or
. evaluation program establishments weye in noncertificated
workshops. - . ‘

Cc. ‘ Workshop Classification by ‘Primary Disability Group

. :
Workshops were grouped according to the primary
- disability or disabilities -represented in the client popula~ :
tion served. Data were collected separately for disabilities B,
with substantial numbers of clients -- those that served a
substantial numker of clients with one type of disability
Y were classified by that disability, and those that served
more than one, major disability type but not a majority of
any @ie type were classified as "general" workshops. Those : . .
‘workshops that, served a major disability group that was not’ *
large enough in numbers in that type of workshop were. . _@
gfBuped in a "migcellaneous" category (e.g., Cerebral palsy, .
cardiac, orthopedic). These classifications (groupings)
were identified throughout the report as "primary. disability
. groups" to describe the type of disability of most (but not
necessarily all) of its clients. YY .

. la

Of the total workshop programs reporting, one-half
were classified as mentally retarded programs and one-third
were classified as @@neral programs. (Appendix tables 1 and 2).
Each of the other groups -- blind, mental illness, alcoholic,
on ‘and miscellaneous -- represented six percent or ges for ,
each category. i > To

Of the regular ptogram workshops about one-half were
classified ‘as general workshops, one-fourth as mentally .
retarded and 12 percent as blind workshops. : :

Nearly three-fourths of the work actives centers
were classified as progfams for the mentally retarded and
nearly one-fifth were classified as g€neral workshops. . ‘

General programs constituted half of the training :
v and/or evaluation programs while slightly more than one- , .
‘third were mentally retarded group programs.

Cn an u . . : ¢

. _ * 30° 38 ‘ oho a



, of ‘the programs providing this bénef:t most provided . a
five days of vacation per. year and the amount did not ‘change
with additional years of employment, It should be noted; “/.
however, that the workshop differs. from private industry * 7
in tHat thé average ’ “client/employee ‘generally has a telative-
ly short stay in the workshop. Data fdr the survey week .
(May 1973) ‘disclosed that the average $lient terure in certi-

ficated regular program. wofkshops’* and wrk activities ce berg.
‘was two to three years, and in trainin nd/or evaluatiog
programs - ‘less than one year. 4 -
Only 17 percent of the noncertificated viorkshops:,
provided paid vacatiqgs for their clients. .
1 .



r Lo 2 6

-) det Geographic Distribution of Workshops and Clients ~ - |

The geographic distribution of workshops generally .
follows the distribution of the total population in. the .
United States, with the highest number of workshops being
in the North Central area and the lowest number being in
______the West (Appendix table 11). The distribution of clients .
follows the same general pattern. The North Central region
. contains ,33 percent of all workshop establishments and .
. Sérves 33 percent of all clients; the West contains 17. .
percent of all workshop establishments and serves the same ~
1 percentage of clients.

+ * The distribution of workshops by State also follows
population density rates (Appendix tabla 15).. New York
has the highest number, followed py California, Pennsylvania, -
Illinois and Ohio -- in that order. Fourteen states’ had
fewer than 10 Yerkshops. bd

* K. Workshop Current Client Capacity and Potential

| One, of the objectiveS of the study was to analyze the.
current capacity of workshops and determine the potential
. * for serving more handicapped persons and/or other nenhandi-
#. ‘capped persons. o . an .

. =
.Workshops ‘were asked to provide estimates of:

. ® ~ Total number of ‘clients served during the |
a hain year (It should be noted that these data ‘°
, ‘ “may havé included clients who received
-- + rehabilitation services but were not employed
. in work programs) ; .
‘ to = Average daily client attendance during the
. “ year, by type of workshop program; ole
: . - Highest number ‘served during any one week;: -
- Maximum number of handicapped persons that
TMTM could be served daily -- taking into account
the size of the facility and assuming ade-
quate staff and work available; . .
* - Comparison of ‘maximum capacity to workshop
5 capacity in February 1967; and .
- Additional number of handicapped persons that .

_ could be served daily’ with present staff
a (assuming the availability of sufficient
. work). toe .



* : : }

; The average investment by type of workshop program wes
Substantially greater, for regular program worxshops than for

. work activities centers and training and/or evaluation

“programs (Appendix tables 30 and 31). . oe .
» coe ‘ Average investment _ : a)
~ 2% i Regular. .Work Training and/or
Type of invest- Program — activities evaluation
ment _ workshops «Centers - programs
coe : ° .
Ptant | . $177,033 , $54, 652 > $50, 200 -
i”, J . ‘
Equipment ao 50,915) 14, 125 ’ 1s, 067 .
- 7 qv .

When avetiage investments were compiled by primary .
disability group served the pattern shot elsewhere in the
financial data was reflected: -the regul program workshops
classified as, blind or, general had average plant investments
of $237,771 and $249,333 respectively, and mentally retarded, ~
and mental illness. group workshops had- ‘average plant i! ste
ments of only $54,734 dnd $36,701, -- a, vast dif ‘erence. 3 ia ‘

The average. equipment investment was'similar in range. The. ‘
‘differences seemed to reflect some relationship to the type .
of work program: The workshops serving mentally handicapped ’
‘clients were. mostly involved in subcontract ‘work usually “~
‘requiring less space and equipment than the manufacturing. *
‘and reprocessing operations the other twa types of work-
- shops (general and, blind grotps). ,

‘
@ 3 . .
bifferences in average - Sinvestinerit by work ‘activities’ - oF
w centers were ess significant except for blind group centers ’
but the number of blind centers was much lower than the 7
mentally handicapped groups. The greater average inveyxt-" aed
. ment in plant and euipment for the blind group may hi
been related to the affiliation “gh -regularaprogram work-. 2:
‘shops involvéd Po manufacturing r ex than gubcontract
work. . . . : oo . fy
The range of. average capital investment by primary’: .
disability groupein seaining and/or evaluation programs: .
was fairly limited fo! thefour primary disability groups . “
(general, mentally retarded, blind and mental illness). . °
which - served most of’ the cfdents in. the peograms. : \ { .



1 7 ‘ a . . ‘ . ve z* n *
ae Lot . . . . oe 1 1 ae
se Following is a comparison of the distribution of: . _
clients by work shop..employment size in the 1973 judy with , vate
-‘"the comparable ‘distribution found in the 1967 St of Work- ~ ¥
- shops by, the DOL: ot wo, . f

TE > Lae

_TM a, All workshops Percent, of clients in workshop wit!

. \" Number” Percent ~Few@r Fewer “ Fewer 200-7 ..

+ of '-- of * tin 20 than 50 .than 200 or more

“¢ : _Glients total clients clients clients clients 4

. Q , ‘ %
. Clients. in .

~aW pr. wor ae ° -+ 9 a “ -
/ grarisght . nd . ° ~ .

1967 "35,460 100 7 ' 3e 81 Hee
: oY . . ot 2 a ~b
-o 7 1973 °° 9876 100 - 14, 59 8a" 12 yo
clients jin. < : : .. .
‘ regular-, . sar? . 7s . m
‘program +. 7° 7 ye Lo .
work- os & . :
* shops: “

~ 1967 14,474 .100 . 57
. . , oa

1973. . 36,9783, 100°-. “a6
ier ries Air: no ara
" The ‘percentage of clients. in the fewer-than-20-clients .
workshops doubled fgf the total workshop operation’ and - 7-2
tripled for regular program workshops. The 196% ‘report dia .
not present data on*work activities center size separately : +]
~ because it was; relatively new concept’, but the rapid *’ so,
a. gpewth pattern presented laté ‘suggaatl) a substantial .
il crease int small k. activities centers. ~ .., .
’ aa ong wor Lo . uo - Vee — . Se
“+H.” Years, of -Operation-of Workshops’ |
roo 7 :

es? coe . -. . i
. ‘The age of the workshop: didTMnot dire@tly correlate , z
‘with the evel ‘client employment or servicgs provided, nn
; but ney’ workshops were shown to be.legs effective*in some . .
\ * functions: * The distribution of ‘workshops by years’ of . te
* Operation (Appendix table 15) shows that 11 percent were . =
one year ‘old or less and one-fifth: were less than ‘3 years ' =
id more ‘than. onerthird less than 5 years old. Work ~ ,
activities centers terided to be newer; more than half were 7
_less’-thah 5 years old,: compa: ith one-fifth of ‘regular Los
* program workshops. ° Phe Yess-than-5 year age indicdtes, * .
establishmant- fter enactpentTMof the 1966 Amerffments to the -.
FLSA. mye a no, Lo

Se ad A a gg ss -6 :



-o ‘ -
‘ ‘ . .

—~

More than one-third Of certificated training and/or

evaluation programs reported alpraye annual client wages of

less than $200. Clients in evaltation programs may partic-

ipate ina variety of activities, including counseling and

C- testing, which ate not, production work: and consequently
wages are not edrned.. Clients in a training program also
tay be invloved in- sPecial activities of. a, supportive os
service type which are-not likely to produce wages. Under~-
the Federal-State rehabilitation program clients of the
State agency who are in training and/or evaluation programs
can be provided training allowances or stipends by the
State agency. These; funds may be disbursed threugh the
workshop and, under these conditions, clients in- training
and/or evaluation Programs would likely receiv@wages, or

: allawances: paid as wages, for acceounting- purposes amd the
. amounts would bedrelatively small. . »

‘
More than one-half of: the, certificated training arid/or

evalyation programs had average annual client earnings

below $1,000-bue one-fifth had average earnings of $3,000

or more. oe -

a _ . a ae .
Noncertificated workshops: tenged to have significantly

\lower average client earnings in afl three types of a

Rrograms. . so -

\

Workshops which were affiliated with selected national
organizations were concentrated in the regular program work-
shop group. Nearly three-fourths of the certificated
regular program workshops that were members of -Gogdwill
Industries of America (GIA) had average annual client earnings
of $3,000 or more; more than 90 percent of the workshops

* affiliated with National Industries for the Blind (NIB) had

_ average annual client earnings of more than $3,000; and 36
pércent of the Volunteers of America (VOA) member’ workshops
had average Client wages in ‘that range _ (Appendix table 66). —

- More than half of the certificated training and/gr.

evaluation” Program’ operated by GIA and NIB member workshops
‘had average,client earnings of under $200. .



+: "3.4, Paid sick leave ~ . a ate

° Nearly one-third of the certificated regular ,program
worksheps, serving 45 percent of @he clients, provided paid
sick leave benefits; -but very few of the certificated work ‘
activities centers and training and/or evaluation programs
(less than four pe¥cent) provided that benefit (Appendix
“tables -114-118). ° Of ‘those programs most limited their sick’
leave to-one to five days. regardless of the number of years

of service., a. : cn .
c. Other Fringe Bengfits a . oat oy get ‘
Other fringe wet sguciere provided to cljents :
during the’ survey week clude the following: * - .
a, ~@ Workshops |_ Clienté (apa)
. . en 7 Percent _ Bercent
_ of . 7’ . of .
Benefit so Wunber total Number _total 2
. Total workshops - and ~~ — rs nnn meee 4 “
clients* + 2,355 100 91,194 "100" *
> . e
Life instrance: +" (208° 9 18,461. (17
Accident insurance ., 249°C ? 10,893 oo an
Worker's compensation | 1,650 7 66,227 73 »
Health insyrahce ~ . 187, 8 12,237 13
Retirement+pension plah + * 39, 2 . 2,683 -. 3,
“Social Security ©. ot 1,439 -- 61:* 59,884, ° 66.
Unemployment compensation 167 7 7,297 “8 .
_ Other oe 43 2 2,379 3° -
. oe 4 7 .
Workshops providing none. .
’e of the above benefits, st 432 18 15,414 17

'
| sndividual items wrll not add, ,to total because of duplication.

.Almost’ four-fifths of the workshops provided one’ or more t E
~of ‘the fringe benefits enumerated*, above; the most common was .
worker's compensation which was provided by seventy percent -  .
of the workshops to almost three-foutéhis of all clients in
_ the survey (Appendix tables 119-123). °. NO -



In response to the question regarding the effect on the
ability of work activities center clients to make overall *,
progress toward normality in ways other than productivity, “
46 percent saw no significant improvement; but more than one- ,

- third of the workshops reported that the ability had receded.

: ¢ significant change in the employment opportunities
for the inconsequential producer resulted from the sepa-
ration of the two programs, according to 82 percent of
the workshops commenting on that activity ~ (Appendix tables
150-153). .
. The effect of the term “work activities center" on ss
program image, community support and grant ‘funds was also ‘
- evaluated (Appendix tables 154-157). More than one-third °
of the group indicated improvement in program image but .
nearly two-thirds saw no significant change. Most of the
respondents (82 percent) reported no significant charge in
community support and a slightly lower number (73 percent)
saw no Change in grant funds.

Workshops which at the time of the surveys were
operating both a regular program workshop and a work activ-
ities center, and which employed both the inconsequen 1:
and better producers in nonintegrated programs prior ‘
February 1967, were also asked to comment’ on the effect of
the separation of the regular program workshops from wor]
activities centers as required by the 1966 FLSA Amendment
The activities selected for comment were identical to those
which were used for integrated programs. In this group a ~*~
much smaller pfSportion (one-third to three-fourths) '

’ indicated that they saw no significant change in the activ-

% ities listed, as compared to the intégrated program group . a
responses (Appendix tables 158-161). Most of the workshops ~~ -~
which did indicate change reported increases or improvements
in khat activity.

B. Wagesg Subsidy or supplement .

an “A ptogram of wage subsidies or supplements for
handicapped persons has been considered by Congress on many .
occasi in the past and a wage gubsidy bill was introduced ~
in thé 95th-Congress. The objective of such legislation is
to pkovide a minimum income equal to the Federag minimum ,
wage for handicapped persons employed: in sheltered workshops. -

a

me ee Ce



ad | . -

In this study the fitst two types (income from .
work and fees} were combined:into "earned operating income" -
which represented income generated (or produced) by the
workshop clients and the staff. , : ,

na Income |by major ‘sourcés - all programs *

- eo ¢
Regular program workshops depended on the work -
Program for nearly three-fourths of their operating income
while the work activities centers received less than a third
of their operating income from that sourge (Table 4).

Subsidy income was the largest source of s pport. 4
for work activities centers but the average ‘subsidy ‘per work-
shop was higher for regular program workshops than for work
activities centers._ sONO . ‘
Training and evaluation programs received nearly | .
One-half of their irlcome fromi.fees and the balance was
divided*almost evenly between the other two sources.

- The average work: program income for work activities’

centers was only ten Rercent of the regular program workshop t .
even though the average daily attendance size difference was

very slight -- 43 clients in regular program workshops and .

40 clients in work activities centers. - _ :

’ Fees for training and evaluation were not restricted
,to training and evaluation programs. Two-thirds of the.
training and evaluation fees went to regular program work-
shops and work activities centers, suggesting that a...
significant number of clients were receiving evaluation or
training without being in a geparately identified training -
or evaluation program. : . . :

3 fo
a on -
‘ - i .
- . f
€ “ . ,
a 7 ®
‘ * ‘ A
mo $2 oo: :
"43 . ets
: . . . ory
. o 7 . it 7 vo a



. . a x . FN
cay
ot 7. clibnt earnings by length of enploigent .
In compet itive industzy,” workers normally earn higher
. “wages as théy learn jthe job and gain experiénce. Sheltered
workshops differ signifitantly from industry in ‘émployment- -
pojicies: becau% the~client who progresses || learns the job of
and becomes: more productive, is the one most likely to be c
Placed in employment oubpide the workshop.’ The lower pro-
-ducet is more likely to remain in the workshop for long
periods of. training or preparation for community employment. .
Also;- ¢he- handicapping €: nditions’ of many clients are such——
as to ‘severely limit eir employability to the extent of r
requiring extended or indefinite sheltered employment; for
gome handicapped workersj this ggay be their last- and ‘inal . _
.* .gainful employment Posi ion... :
pat . a
_ : A later section cr) his report presents data on-placement
»of clients in competitive employment which indicate that most . .
clierts were placed had been in tha workshop less thgn a year. ‘
_ Clients employed in regular program workshops less tMan one .
. year had higher average’earnings than those efffployed ore to
five years’ (Appendix table 175). This seems to suggest that
. those clients who were producing and earning higher wages _ -
were placed outside ‘the workshop in their first year. whereas
. the lower préducing clients rem@ined in the workshop. Work-
shop clients earned: progressively 1 more.each year ‘beginning at
five years, } . 6 *

o

. Training and/or Avatuation programs place special
, emphasis on short-term, transitional services. The average rc
client. in these programs had been there less fhan a year and
-. t ‘almost all clients less than two years. Average hourly earn-
‘ings were lower for clients who had been in the program for.
-". | more than one year thah, for those who were there for one ar
‘or less. i . 7

.. 8../Hourly earnin _by sex and type of work
The hourly earnings of female clients were lower than
male client eagnings in m ny types of work, but the differ- . -
. ence was ‘not sighificant. | In regular program workshops
females ‘appeared to earn higher in jobs requiring dexterity
(@.g3, simple bench work) whereas male clients ‘earned more -
+ on jobs requiring greater physical effort (e. Ger salvége,
janitorial and haiptengnee Maple” 14), - . :



G.

2 client disability also seemed to be a factor...

H..

eg.

; ‘Honheandis

ev 7

“pos .

to ase the .p:
. ° . >

re nate ‘novel ‘Erom, the sheltered workshgp- .
¢ Into“compekitive employment in community jabs.
at.a rate Q recent -of the,total served :
4242 clients. placed repre- ~~ -
“third of, the: average. daily
st of -the. clients - *

placed. had been’ in, the workshop less ‘than ‘a. .
» Year’ and the. starting hourly Wage was $1.60 . *,
or higher - for the majority. -
' Less than 15. pextent of the clignts placed. in’ ‘
etitive employment had to feturn’ té the
WORKSHOP ‘for further frafning or’ other services.

The’ type of work provided in workshops 7
influenced training and wage earnings hut, the:

Blind a@TM@ other phy cally handicapped - “persons
were emplo¥gd- “hostly ‘in,manyfacturing and rend- -. |
vation wor and y" earned sobstantially - aioe
. higher wages than/the attentally~ handicapped who
were employed alrost exclusively | an subcontract

work. .

ee

“The most common job in the workshops: was bench

assembly work, possibly because ‘invrequired a ‘.

the least, investment in’ equipment and engineer- ~
ing. It is also likely that it was the most ~
suitable work (which was “available to the work-.
shop) for fhe mentally’ retarded worker, who. **
had’ very: jmited skills and potential. . vy
aa .
+ Lack of wor was a major problem in the regular | v
program ‘wor. Shop; work activities centers and .
training an x evaluation program# were also

concerned with securing suitable.and adequate ~~ -

work but, to a slightly lessex_ degree.

’ wae

The. size of the operating ‘pudget ‘in_many- work-
shops, especially those serving mentally ~-
retarded clemts, seemed inadequate to support’
the, necessary programs, ‘Support, funds gonsist- ,
ing of fees and subsidy income were mot

" . , \ oot .

>



Table . : ; . : ; a : Page

1. Numerical and percent distribution of .
. « ' sheltered workshops and clientgiby certi-
: *fjeation status and organizatil mn, by type -

_--~_7_0f workshop program, United States, 1973----=- 28
ae - &. Numerical and-percent’ distribution of — f :

! : -sheltered workshops and clients by type.

be of workshop program by certification

“. statu8 and-organigation, United,states,  .' | _
1973 ~------ Sasha hahahaha toate erate 29

, ww 3s Sheltered workshop current capacity and -
“& potential: for serving additional clients, .

“4, Annual, operating income of sheltered workshops
by major source, 1972 -4---~------.-----. Seana 44

5. Regular progkam workshops: Annual operating
income by major source and primary disability a
STOMP served, 1972 -#-------¢--------. on ee me TM~ 46

6, Work activities centers: Annual loperatjing
. income by major source and pfimary disabilipy
group served, 1972 mownnnnn nnn pecmnm nnn nnn nnn 48

7 Training and/or evaluation programs: Annual
_ " operating ineome by ‘major ‘source and primary _
. disabiJity group served, 1972 > chommercns 50

8. Annual operating expenditures by type of a
. expenditure, 1972. ater talatalatatalat ate wemsecan- - 57
3° : Average straight-time hourly earnings of
clients by primary disability group served,
, eo  \? May. 1973 See-----2+ a Pomeemennencnnamnne 70
_ . teeny ar)
10. Average straight-time hourly earnings of a
“ clients in certificated workshops by type of.
client and primary disability group served,
_ by ‘type of, workshop program, 1968 and 1973 --- 73

. _ alls. v Average straight-time hourly earnings of .
iN. +. ., | Clients by major disability and, ype of work-;

\ . . .

1973 --2------- a ao 2-2-2 -2---- ~ 439

shop ‘program, May'1973 ------------.~..--.. wot TT



=

5° .
. oy . 7 .
. ve “Client Applicants for Service, Rejections ang, Lay-offs
A handicapped person bécomes involved in workshop ~
services, including employment, through a variety of entry
methods: # referral by a sponsoring (fee paying) agency, by
another agency providing services, by,other ‘comunity .
agencies or individuals, or by self referral. Entry may ~
also be gained by transfer from amother agency, school or
institution. Eendicapped Persons may make application for
services -such%s training or evaluation and be transferred | ce
~ tq an employment program. upon completion of evaluation ‘ “os
and/or training. A client also may be placed in employment
in a regular program workshop or a work activities center
directiy from application status. .

7 The acceptance of a handicapped person into a workshop
program is affected by a variety of circumstances and
conditions. Workshops were asked to provide data on the” -
ra number of persons making application for services,. the’
an number rejected and he primary teason ‘for réjection.
__ 1. Client applications and non-acceptance
XN

4

. Regular program workshops reported a total of 99,527
4 applications for services; nearly one-third were not
agcepted. The miost ‘frequent reason fer rejection was “lack
. of work" (Appendix table 28). . co
One-fifth of the 59,645 applicants for services in work ~—
\. \activities cénters were not. accepted, mostly because of lack
of space, but frequently beqause the client's ‘disability’ was
too severe. ‘ " a

’ . ‘ . ~ .
toyer 90 percent of the 59,885 applicants for training
_ and/or evaluation program services were accepted. Of the
“nine percent who were rejected most had disabilgties that
were considered too sevele. The lack of trainjng fee was
not a significant cause six: percent of clients not accep=
. ted were rejected for ‘this’ reason,.and only nine percent. :

“ beéause of lack of adequate funding. _

an . ‘ »:



art a . eg ° ” , fue 3
3. Comparison of* rage ‘straight-tine hour ly earnings - -
. . of clients in/1968 and'1973-°. Le

“ “ ! . '

yo, Ayprevious , study (1967468): tollected wage . woot
payment data on clients’ in certificated ‘workshops for a oe
“March 1968 payroll pet 4. Wage earnings for the two periods t
are, cgmparéd by type of workshop: program,, type of client and, .
* «. - prima: disability group, served (Tabl 10)., .Changes in aver=.. a.
ssc age daily .client attendance are also, 5! own to reflect the a
growth*ef programs and ‘the possiblé impagt of the growth. . tote
ae . _ : ~@- Ff °
- The largest “increase in clients ypccurred in work La
*. agtivities centers — the number of clients alfost ‘triblgd:
. @Work activities, center cliehts are considered ‘to be.'the. most ¥
_ severdly limited of all- types and conSequently they tended .- -,
to-earn lower wages than clients fn other programs. Phe . °°
expansd@io£* lower functi@iing clients had the ¢ffect of : .
7. “holding. down“the Overall average hourly wage even though *

average wages increase@ in each category except, individual
. rate clients, Clients ini.these centerS represented 36 per-
ecént.of all clients in’ 1968, ‘as compared to 49. percent ‘in
1973, fe ve Lo. . : ~

& ry ‘ : . soe .

“ : ‘Moos eee . a
Although ‘the statutolly minimum wage xate was not * a
: ingreased in the 1968-73 petiod, average wages, in regular’
a. "program yorgshops” increased by. nine percent, and im work |.
_ '. activities tenters by’ six percent. ; Average earnings in*

training and/or evaluation pfograms improved by 11 pekcent.:
. an ete a . po woe,
‘ Comparisdéntimust be confined to certificated workshops .
» .., only because the DOL did not. collect data ‘from noncertifi-" * ,

* catéd workshpps:in 1968 .Also average. wages paid to clients’ -_

' ,on individual ..¥xcéption certificates (in‘ regular’ program
werkshors) .are reported separately because: they: were Sepa-
4) M&ted inthe 1968 study. This had a Slight impagt on * ,
° average wages or- reghlar ‘program. workshops shown elsewhere -
.in this. section. , . wom “os

an . + i

La
_ A comparison % 1968. and 1973 data" by prima ne ‘
‘+. disability group séfved shows that th® blind grptp had

*. greatest overall increase in average hougly earnings; th

mentalty ;retarded group programs operating as ‘regular, -pr
—_ ise Workshops ‘and as training and/or evaluation @rogram
-4
S|

iso’ showed significant.gains.. °

, : . . to me
3 we te . .



oo o . : . : . om 1 i
, € - ue
e. eo NN . .
8 ce, ; . \. ’
soos . Table 11. Average straight- ‘time howkly earnings’ of clients 4 ©
. . oO : ~ by major disability and type of workshop rogram, a
: , May 1973 (concluded) cy ’ .
. _- . .@ m 3 :
ss - . Certifacated Noncértificated -
Major disability and - workshops workshops
. ~~ ““type of program Average 7 Average }
: : : Clients hourly ’ Clients hourly
se " Number:Percent earnings , | Number:Percent. earnings
. » . . . - = .
e. + Age . . ¥ .
ee Regular program . - ot . .
workshops - 1,269 1.5 * $1.33" 63 wv $1.87
is . Work activities . | ro . . .
centers . . 579 .7 245 | 37° -6 46 we
- Training and/or . | : - :
‘, : evaluation programs 53 a .73 j 2 * 10
[+ . i? . ° .
° Other it ° : . to a i 0
Regular program ~o , - , . ,
‘ . workshops . 3,237 3.9 , 1.57 299 * 5.2 1.59 *
Work activities y , . oe
centers : . 3820.5 «54 . 71 1.2 247. -
Training and/or . . . 7.
. evaluation prograiis 873, 1.1 tl -86 50 2 7 81
° - : * .
*Percent, Tess than T.1. . a . -
Source: . Appendix table 162. me . . sm
my . , ; 7 . . :
fos . _ . x
fa ts 2 \ .
. . ‘ . .
98 . ; rn ay sd Lo : 99 .
: Nene a
o ‘ ne i: TM . whos
- oo we ’ ‘ ~ ry . .
a pot : - : . : . ‘
_ wt * ; “ oS :



. # . . ene)

: ; . a : “
ra . = . .
DOCUMENT RESORE - ne
ED 189 508: cal a A “. §C 103 580 “s
- s . _ . 7 , oh . . .
. TITLE . Sheltered Workshop Study. A Nationwide Regert on
. - Sheltered Workshops and Their Employsent cf ~ *
; Handicapped Individuals. Volume-I. torkshop oe
seo C Survey. an 4 .
INSTITUTION Eaployaent and Training Tdministration (DCL),
‘ _Washington, DBC... :
PUB DATE Jan 77 oe . ,
NOTE . 149p.; For the statistical appendix, see EC 103, og
Mm: “os 58 . , os
en a . 8. cote ,
EDRS PRICE * 4&F-$0.83- HC-$7.35 Plus Postage. ’ ;
DESCRIPTORS Adults; *Zaployaent; Federal Legislation; *Financial
‘ . Policy; *Handicapped; Job Placement; Job Skills;
¢ Progras Administration; Research Projects; *Sheltered

Workshops; Surveys; Vocational Adjustsent; Yocational
Education; *Wages; Young Adults
ABSTRACT soe . §,
*, Presented are results from a survey’ of 2,530 .
sheltered workshop programs /serving handicapped perscns. Initiai
+ sections review the historical, developaent of workshops, federal
Tegulatipns affe ting worksheps, ‘and previous related studies, ‘pata
are provided on the following ‘topics: characteristics of workshops.
» and clients (including a table on numerical and perceit distribution
. Of sheltered vorkshops and clients by certification status and- :
. organization by type of workshop program, 1973); financial operations
. -. “Of workshops; wage payments to handicapred clients; client fpinge -
- benefits; client training and placement; staffing and prof¢sbional |
services; and additional issues such as the impact of 1966 Fair Labor

Standards att Amendments on work activities centers. (CL) e
4 . ~
~ . * .
’
t oC
. t
7 x
ca . * - e
. ; os . . , af
reo Prt tier eter etter tT eter eet Tee tee Terre eT errr rrr rT errr re
* Reproductions supplied by EDRS are the beet that can be made *
* . from the original docunent. *

. 40888448 chee ee seceseseses COSREEEERE FOSS SRE SSE NES RENEE EERE E ER EEEEEE
. . : : . . 4

-, - Loe . a — ,

a ‘



“A. Intpact of Workshop Production on Training

*? the work program generally represented the basi .
operation of most workshops except. for some training’ and
evaluation programs which were not production oriented.
tha ,work program provided three-fourths of the-.operating
“ineote in regular prograin workshops, and about one-third -
or’ less in work activities centers and training and/or OS
_ evaluation programs. Nearly two-thitds.of the certificated ..
regular program workshops indicated*that training was »
dependent on the type of goods produced im the workshop. « °
In contrast, one- -fourth indicated that skill training was
n@t dependent on goods produced. More than one-half of the .
certificated work activities centers and somewhat less than . fof
one-half of ‘the certificated traiming and/or evaluation no,
programs reported dependence ¢ on goods produced for training |
program design.- . . . t 5 a

- Be Training Provided ‘and Capacity for Training ° .

: A ‘total of 94,635 clients*reteived training in all - i.
workshop. programs during the reporting year -- about: one-_. .
third bf the total number served.* But training: programs .
“were gnly being utilized’at little more than ,two-thirds . .
,of their capacity (Appendix tables 92-96). ¥ . rn

‘ | Trainees were almost equally divided among the tired
programs which Was consistent with the distribution’ of fee
income report€d in Chapter VI. gonly, 37 ‘percent of the s
.clients who receiyed training were in’ separately . identified’ .-
training programs; the other two-thirds werp. in regular .
program workshops’or in work activities:centers. Clients’
receiving -training | represented one-fourth of. the clients

‘served during the year in certificated regular program _
workshops, more than one-third of the work activities center
clients and over one-half of the training and evaluation,

‘Program clients. - Loy ° .

The unused capacity to ‘train additional 39, ‘221 coe
clients was abolit evenly divided ng the three certifi-: “
cated workshop, programs. Nencertificated workshops ot
reported capacity - for training an additional 3,364 clients;
nearly one-half in regular program workshops,, 2a percent in .
training and/or evaluation programs and | one-fourth in’ work, . <7
activities centers. . . ° ,

t w- oo
+ -106- =: JD :



II.
III.

Iv.

Vv.

VI.
“vII.

" yrir.
Ix.
XxX.

xt.

a

TABLES OF conrénvrs . 2 4

vo LUME . i

‘LIst OF TABLES ------

_ STATEMENT OF THE SECRETARY ------- aa 1
' MAJORTM FINDINGS woropesapeececerenancarocoen 3°:

“HISTORICAL DEVELOPMENT OF WORKSHORS winnnn- 10
FEDERAL, REGULATIONS --------------- oe » °16N

PREVIOUS STUDIES ------- - crenata . OL

THE: DOL SHELTERED WORKSHOP STUDY ; .
’ A. Background +----------------~--. -- 25
‘Be Objectives of, the Study ----------- 25

CHARACTERIST Ics OF WORKSHOPS AND CLIENTS | s-” “27

FINANCIAL OPERATIONS ©F WORKSHOPS -------s-" > 47 /
WAGE PAYMENTS TO HANDICAPPED. “CLIENTS wan--= > 64 .
cftEn? FRINGE BENEFITS woonense ----------- - * 96
/PLIENT TRAINING AND PLACEMENT wie anne nena 195°
* STAFFING AND PROFESSIONAL SERVICES yocecon- 7 116
OTHER ISSUES wang need aa’
" STATISTICAL’ APPENDIX +
_ TECHNICAL, NOTES a ee A-iti
“LIST OF TABLES 2------------a-e-ntene nee” Acey
roe eo, a
“ add .
a
” , o a 7° .

mee



‘ ." followed by genpral clerical training. _

" Bypes. of Training provided

‘The survey questionnaire UBtea” 13 types of training
‘which had’ been’ previously identified by workshops ‘(Appendix |
“ tables, 93 and 94).. ree { . .

Janitgrial-custodial * services was, the most common’ type

~ Of training provided’in all workshops, possibly because of
“the Idw skill requirement of most. jobs in that category and
their suitability: for mentally, retarded’ clients with limited
ee potential. Other service occupation training (e.g.,
building mdinteriance, food handler) was found frequently in
Work activities centers -- Where mentally retarded clients

» are’sérved in large number's; food service ranked second~and
building maintenance fifth in- popularity. ,

. : Machirte | operator training, ranked second in regular
" program workshaps and-third ih work’activities centers

The type of (training provided in most workshops appeared
>to be geared'to the lower functioning client who had’ been
-. ..,evaluated by the workshops or hy State rehabilitation agen-"
ciés and diagnosed as, not being capable of benefitting from
‘the type of formal,’ structured skill. ‘training usually
provided.in teade and’ vocat ional schools. . -.

* one ‘

oe , he 19,73" study of sheltered workshops pieparea by
‘ Gteenleigh Associates.for the U.S. Department of; Health,

an Education: and Welfare 1/ reported that in a sample of work-

, shops studiéd a majority of the clients ‘were not involved
. iff skill training programs: but, were engaged in. developing.
4 work’ hagits and job, performance _ (genera) skills. - . et
. . ° “In summary, it may therefore Be more - -realistic to
. classify most. workshop training as work preparation rather

. , than ‘skill training. ~ uK’
’ ° Sok - . . , oy
. I Greenleigh Associates, Inc., The Role of the Sheltered

Horkohoos in the ReRabilitation of the Severely Handicapped,

. New York, New York, May cin A

. we . 1



Table 1. framerical and percent “distribution of
‘Status and orvanyzatton by Sy of ver

Type of workshop pregram t

+ Total

Certificated
works!

sheltered Workshops and clients by cerkittéation
rkshop program, United States, 973

. : t
Number of reporting wortthop estab

- Vsheents 1/ “27 1,786"
Total number of workshop Programs 2,530
AV) regular program workshops 2°. 88
au wort activities centers ¥,167

All training and/or evaludtion .¥

Regular program workshop only

Work activities center only

Training ansier evaluation pro-* .
grams only - . ”

lar program workshop and . .
“re activities center nd traf 126
Regular progrea workshop a trata - .

ing and/or evaT@ation programs 203
wort activities center and train-
and/or evaluation programs . ”
ar pi ae
ectivities center and Sretntng .
and/or evaluation programs ~ 13

Number of clients, total _ . 98,076
All regular program workshops = 36,978
All work activities centers 46,273
All training and/or evaluation ~

Programs . 14,825
Regular program workshop only - 74
Work activities center only 34 732

Training and/or evaluatton pro- 8

* grams only . 2,901.

_- & Regular progra workshop and
work activities center 7,810
Regular program workshop end tratn-

and/or evaluation programs.‘ 17,876
Work activities center and train’ e
neste and/or evaluation poe . 3,580
Regular
activities center a training
and/or evaleatton aaa 16,403
a

progress “51

\
“100

af J
100
100 *
100

100
100

Jao, +

1,623
1

2,355
787

1,093

ori
30181
ius

13,568 -

12,262
31875,

1,797
7 688
17,619
3,450

16,403
“a”

a - 163
93 VWs
92 on]
4 4
37

ny “55
a
“ 28
ew - 3

° <
7 “6
“ 3
100” -
Clients

93, - 6,882
9 2,737
4 2,828
92 287
83 2,512
92 2,757
ez 1,104
98 Vee
9 257
% + 1390

q~

Sea
D

-.s 8 @

78,089
32,534
33,110
12,445,

17,807
22,973

1,420
6,426
16,843
2,879

15,741

. Tadap Teated ‘total.
Average daily client attendance.

Source: Appendix tables 1-6. .



7 S . * , = wo, og ’
. . % A are
. ? oy
Male drivers earned the highest hourly" wages: in, regular ae?
_progralr ‘workshops followed by,clients jnvolved*in the manu< . oa
. ““faqture_of new goods» h»as tops, brooms, brushes, machine / .
‘. sewn items, Mattrdshee and bedsprings. only 12 _percefft of
. the male clients, we; oyed gn manufacturing compared /* . /
with °40 percent 4 becnbrack and. 32-percent in salvage Te.
: “work. ale client employment “distribution-- -. .
a Sligh*ly, higher propertion of subcontract ~ . *
‘work and wise whe an gua Pecubttions; ‘less in- manufacturing .
2. and... é -work: The ‘mest common job was *

° 9ying Pi ,c tents
and 37 percent of the ‘female clients; but clients in that’*

. , .type of york-edrned Tower wades | than in most ‘other jobs. - aa
mr .
Bench. work was even trore ¢gommon in work activities wee,

“éenters, providing employment “for 73 pergent of the male.
trglients and‘ 78 Percent of the female clients (Tabié 15).

‘ yg

oa ‘Subcontract work was dominant with 84 percent of the male : -
0 workers and 86° percent of the female workers involved. .
. Most of the oth@r. jobs paid better wages than did, é
subcontract work’, . 7 yoy “4
. 7 ot . a - a c _ ‘ tay 7. ‘
- . OS } : a ee,
S i i . nd , . > ae - a =
— ¢ . eat . -
~ : . eo . . ~ -
. a : ~ ; - - :
: . ~ . . . e , -
. can : .
. ed oo ie . °

. . ‘ . > .
. ¢
‘ pe .
> - : - :
' _ ¢ Pye aw
a << . L .
+ ve a - - . wae ‘
a ca ‘
° : : 2 : a4
tbe . a ee te, :
. . . “hy . . .
‘ ees & - ry . < we
. . ar an oe
: . é So”
’ 2° A: ’
aa a 07 . a Bm,
‘



oxy

)

”

37000

‘ Table 12. Average dtraight- jime. hourly earnings
a of clients by sex and race, by type of .
4 , : - certificated workshop -program, May 1973.
a : ve a
.- . 4 wee 1, a .
5 . s-- Male A Female ~
Type of workshop program : Number: Average: N er: .Average
‘and race of client | « of : hourly : f : hourly
- : - :clients:earnings;clients:earnings
— x : -
Regular program workshops .. _ oy, .
All clients 15,777 °.$1.28 12,509 $1.22°
White 11,703 1.23 9,367 ° 1.18
Negro , 2,597 1.45 2,066" 1.36
Spanish-surnamed . 786 1.41 453- 1.31
Other , 381 1.20 361 1.09.
Work activites centers — , _-
_ All clients 22,839 37 19,089 237
‘White / 19,286 ,. -36 . 16,206
Negro ~ 2,466 +39. 1,980 .38
Spanisti-surnamed 557 -40— 411 «39
“Other 155 - .39 145 +45
° Traiting, and/or’ evaluation
programs ~~ C. : ]
° All clients . 7,362 64 5,442 ° -b1
White: . 5,526 +62 4,034 59
_ Negro ~ . » 1,313 +70, 1,072 -69
Spanish-surnamed ~ 304 70, 171 -63
Other -~ 7 116 71 92 63
. , ~ ‘
. : - °
. 7 \
1 ‘ ..
‘ vt :
Source: Appendix table 167.
ty . « .
- ry é « _
. 88 : -



— ___she1i

ee . _
A. HISTORICAL DEVELOPMENT OF. WORKSHOPS. ,
: ~ ;

Sheltered workshops were developed: in responsé to a
need to ‘provide employment, training and other. rehabilitation .
_. $rvices to severely. handicapped. persons. The workshop. ', .
Operates ‘as a work oriented rehabilitation facility with a ~
controlled working environment and individual vocational
goals which permit the physically or mentally handicapped ,
persoa to wark at his or her -own capacity and be paid
accordingly.

es, » of
ve tet Ft ‘.
ns

tered_workshops.
more than 160 years ago. The first knowh workshop, estab-
lished to“ prpvide employment for blind persons, was organized
in . 4838 ° at Perkins Institute for the Blind in ‘Massachusetts.

. The early woxskshops were estabitinea and operated vo
primarly with ,private funds provided through churches and.
other religious or; quasi-religious organizations, ‘sych as
St. Vincent DePaul Society, Volunteers of America, and
Goodwill Industries of Ameréca (founded by the Methodist
Church). Most of the early workshops emphasized sheltered
employment” for physically handicapped and aged persans, and

alcoholics. . «
aa

. the Vocational Rehabilitation Act was " approved in 1921.
to provide rehabilitation services to physically handicapped ’
persons, but there was no real working relationship’ with .
Sheltered Workshops for the next thirty Years.
. The Federal’ government's initial actions with respect
to sheltered workshops occured - -during the first ‘administra-
tion of President Franklin Roosevelt.’: Under the Nafional
Industrial Récovery ‘Act, (NIRA) ‘industry codes ‘of, fair - ,
competition were @stablished to stabilize prices. Sheltered
workshops asked the. Federal gowernment to establish a code .
- for workshops because of difficulties. they were having: in t
selling their products without a "blue eagle" symbol which
denoted a fair competitor. A code of fair competition was
established for ‘workshops and an advisory committee of.
leaders in thé sheltered workshop. field was appointed to!
assist the administrator of the National Recovery Adyfinis-
tration. . However, the NIRA‘ was dectared: unconstitu: 1
by. the Supreme Court shorty afterwards. . ‘

z ‘the united States



a . : eo

B. _Income from Work Program [by Type of Work * moo A
= - —

Fa . ‘ .
oo. Four types of work were reported by workshops:’ .
‘ r : . - ~
Ss Subgontract - contracts with industry or other 7 .
. Suppliers to/ perform a production service such as assembly -
- of- components, and’ processing or repair of units provided
. by che confractor or manufacturer. ' . -

: le - can
: : nufacture of new goods c rime manufacturing of
-a commodity. ” 5 Looe soe ‘
. . oo . . _ .
Services rendered - services provided to governméht
.agencYes and'to private, commercial or industrial firms.

vt

: , Other -. including repfotessing of household goods ,.
salvage and sales. . - .
. . ’ aa vs so oa * .
Subcontract \work s’ the most common type of work.
found in workshops (Appendix: tables 75 and 76). More than

__ two-thirds of the’ workshop’ clients were employed in suBcon- ,
- | tract’-work> Most of the subcontract work involved simple
bench assembly operations such as packaging of ‘components
and collating. Virtually all off the work. activitiescenters, .

and two-thirds to thred-foiirths of the: training and/or
‘evaluation programs reported*income from simple bench work,
A similar range of regular workshops reported income from
os . bench assembly work with the chighest percentag& in mental

. ° illness and mentally’ netarded group workshops.

the, blind group workshops were.dominant in the

- manufacturing operations and the most popular products were . * *
’*. machine-sewn items, followed closely by mops, ¥ooms and
* brushes. . - > rn : te
; ” ° . ce bd
1. Jypes of work by workshop program . ~
‘ (a) Regular program workshpps a eo

. +" Nearly half of the-work program income in
regular program workshops came from the "other" category
salvage, reprocessing and sales. An additional one-fourth

was derived from manufacturing (Appendix tables 47-49). ~
Subcontract Work represented less ‘than one-fourthy of tha y- “6

total regular program workshop income from the work program.

. Regular program workshops which were members
of National Imdustries for the Blind had a substantial/in- .

V®lvement in manufacturing and members of Goodwill Industties

52 : 64. -

ee, oe oe



serene ee we

“Clients in training’ and/or. evaluation prograné are . _
msually-reviewed and evaluated périodically as’-a part” A _
- ‘bheir individual programs. The program is usually designed
!. to provide ‘wagé increases as the.client progresses. Virt-
: . ually all of, these” programs made adjustments in cliént wages
> . in the reporting period and half 6f° them’ made\sighificant
eo increases—in ‘the wages of, ‘percent or more

their clients. ‘

.O a “ Methods of detern! ing ciiént productivity .

ea LO

. “Yorkshops. used a variety of nothods for evaluathng ” ‘

! client productivity. In ,regular,)workstiops ‘more than one- *
third used, actual" coynts ‘of productivity of each client ae

.and another. third used rating forgs' o or Progress reports ol. -
Appendix table 64) a : .

_ & _ The most. -cammon ‘methods -in’ wokk! Agtivities ‘center were .
ve the’ s. as those ‘in regular’ program yorkshops’ ‘but'a ‘slightly
Po eae aes

I~ “ toe tRating® forms’ ar progress.’ ‘reports, ranked Highest i ine 7
* tyvaining- and/or evatuation eeene wi'th more, than ‘third °
ps" "uging_the. . ; “had. a

entages of centers used fyose. methods... ° - .

‘slgghtly low

. oe
‘.. 4 .

” Actual “counts ‘of ‘prpduotiyity’ ais “the Me: of -

the two methods ‘ahd fis: the ~mos$ effective. dn. gubgontr get .

and, manufacturing . ~work:in which ‘units are produce@ with some

“uniformity: ., ‘Client productivity , is mgasur ‘against broduc-,

a tion norms gstobjistied . for ‘Monbandgabpes: woCNPES-

~y .

\ a ‘Rating. forts-generally matittie a: variety’ pt performance /
, “ ‘" factors,.in ‘evaluating the client and aze tused-midst jnepro-
. duction which does ‘not have, a uniform praduct. This system
- was ‘also more, comma in, “workshops with ? \fessiohal ‘staff _—
who, adtjiriistex: anéyor fritexpeet: ‘the “Reports ot

- : About haié- of -thip “pboavar ‘program workshops that \ were
i -members of National Industries. for the -Biind’ used actual
so “counts. of productivity” while members ‘Qf; Goodwill, Industries .

+ of [America mostly ‘used ° ‘rating forms.:_ yh

. . ,
Se 3s » Workshop’ miiniingt ‘production poiley _ 17

a Host. workshops had no minimum Productivity requirements »

*which clients were required to meet.,in order to stay in the ae
. workshop (Appendix table 67). .The ‘work activities center

geherally’serves as “enphope © of last resort” for: severely,” x



-

yl S primary
disability group served by :

x Table 10. Average strai htZtine. ‘houPty“earnin Ss of clfents. n cartiftcated shel tered workshopy
+ by type of, Client and prdgmary disab nd are se

et by workshop program, 1968 and 1973

i workshops
oon ; ", ;
All cli@its by yf 6f clients ‘ , . i.e
“All chien (211 prograns . 39,524 - 83,018 -43,498 0 |. $.76
> + Regular cli eT BP 6° “th ~ a
Work. activities center’ clients ark 3125 41 922 27,797 197 .
-e, . Trafnees and/or evalueés 7,971 ~ 2,777 4,806 60- "(57 a . i ,
Individual exception clients _ 2 7826 = 5,538 + 2,712 * 96 69 .67.° oC 02)° (3)
. — a Sy .
“Ai clients b ima . or a : . .
. ais sabirity ap ser Served . : ra
. owe .
- General so ° 16,482 33,096 16,614 ool 96
© Mentally retarded 13,722 38, or oy re &
an Alcoholic + 1,285 . & ag” 19 1.3
“Blind 7 ‘# 3,521 3,508 (eo 3500601, ar) 18 .
: vantal_VIness ys _- 6,006. 43292 BO 8
~ scelTaneous ° 856 J .
1) Totals gy BE Be AE ‘eo ATE ve 7 ne
P+... Reqularclients te wen eee ee RH
Se ga een’ ery . -
 @eneral* _* 9,181». “15,963, 6,782 4 (1526-1008. 12 10
: hental ly retarded 83200 2,257 1,419 77 98 Lay 18-19,
"| Alcohotic ~ * 1,052, - 831 (eat) (21). }-24 1.36 ¢ 12 10
a Blind * 2,769" 2,849. a AQ 1.72 .23 15,
Mental 11 1ne8: > 168 az . eae «383 1.01 1.23 +22 22°
Misce} Laneou: Loe 600°.” 525)" (88)" «1.07 1.5% 44
© Total s * ate mat ie . a TT TB a)

Se

ae
.



-

}_.. " .. thems__Data have been summarized and compared for. three

» . -.- : - oy
\ . 7 “+ Growth Growth
. ” Certificated | Number “1968-73 Number 1968-76
vwgtkshop March June Num-  Per- “June . Num- Per=
programs 1968 1973° ber ‘cent 1976 ,. ber. cent-
. an 7 + .
Regular pro-, -.. se eo, . .
a -  gzam work- “s : y ' a . -
. shops “+ \ 660 $,056 . 60 1,327 ; 667 101, ,
. ‘, are activ- .- 7 J) : , . red we
. ities -cen- . sed - ate = . a
“ters ...¢, » 468 1,418... 203. 2,252, 1,784 € 301,
Training and/. . . _ : o . . a “

Grams 657 ¢n-> | ty 839 1824 ge

op _Tosal all moos - ; .
7 programs.’ 1, 128 413 20 178 «4;478 a

. . a . . ody “ * 7
mo . oa s a ey _ we
e. a =~ , . ‘y ve
no : . sy oe , oat . .
. of eee co wae . \ toe, ¢ a 7

tots A
ce i/ Training: and/or evaluation programs _ were not reported

I.” Growth of Workshops

- ‘The Wage and Hour “Diggesion compiles periodic data on |
the number of certificate workshops and clients served by

periods considered to be'significaht ih the workshop study -
March 1968, June 1973, and June. 1976, -- because’ ‘they, relate .,-
to data ‘analysis periods. . is of

ute

e growth of workshop programs in these periods was Ho,
mostly in work activities centers: .
* .

sor evalu-: . ween . . . . oe
ation pro-- so . . . . ,@- . lee a

7 : cd

%

, Separately in the 1968 Study, data fer those. prggrams w were - . ,
‘os inclyded “in the regular pRogram workshop totals ae gt
?
S per es we Ss. Depaxtmen?” of Labor, Division of Wage Hous -- “Ue
" Statigticy. Q co
‘ . to.
re or et .
: a eo ietet A * a
eo, aa 74 — .
* a . 7 re . ‘ : > 6g
, . : . not co : ‘ ,
ee ‘ ‘ * . moos, a8 :
. , ’ , ote . _ Ba , ‘ la .
. . ' tos aaron _



”

* 3,585 1,286
Total income’ 2 - _" , ¢ 6,400 | 4,261 ° 6.70 &. 2,714 -

Table: Se lar Program Workshops: “annual operating income by © +
* . ajor ‘source* and primary disability group, i972 . foe .
> % . ‘ . a Ve a *.. ° , an :
. . ~ Le OF — — Primary asabliity group . ; fin _
co Income, source - Fy a a "Mentally : : Mental : : ,
Vioe et 3° _.*_¢ General : retarded : Blind : illreess : Alcoholic
os : ; : ~~ , a we .
ot Average cliénts per program: l/ 60. - 23. * 41, 28° 2 26 we,
an ; a oy - .) @
aveFige intone per rogram: ‘ ’ : . . nd
* Work® income $292,000 $ 42,000 ‘$534,000 $42,000 $1574 000 :
‘Train evaluation ", ‘ . noo.
< fees. : 2 . ‘74,006 31,006 44,000 - 49,000 327, 000 .
- Subsidy ingpme, 0,000. | 49,000 -147,000 - 36,000 -. 21,400 Sy,
J Petal income 2/- wo 384,000 98,000. 663,000 . 76,000 162, 000% so .
aw. o ; os, . ro ot
. Average ifcome Rer client , a . . . . . ; . . . ‘ ‘ ,
served: wy my my , . :
Work program “N 4,867. L gag. s 13,0244 y, 500
_ Fee income Mee 1,233, 1,34 ‘1,073, 1,428
Subsidy income. - ’ . 1,000 . 2,130

fe:

“ . Toy soe et ep O&

ae

. se :
1/ ‘Average aatiy elient attendance:

2/2! Avérages. do not add to total because of. diffrence in munbey *
y _Of programs teporting income »by source.

3

45. Sage raya tables 45- =49, t.

Only one workshop reported. fee income: a of
, . ve



a” ‘ see *, .

ote ' Clients - in, the other two ‘Programs had an even qreatét -
“tendency® to remain in the entry program. Only- five “percent
of work activities centers ‘clients transferred -, nearly :

two-thirds of them t ar program workshops 1d a third

. Workshops a mere three percéat of the clients were moved, to

, evailation programs and 43 percent , were sent to work sactiv-

ithes centers. on
a

ys ’ “About “oné-halé “the workshop’ program reported .ho client

to training and/or evaluation programs,. In regular: ptogram an

4+ ++ other programs. More than one-half went to training and/or i

a ‘transfers. This many have been .due to la¢k of professional *
staff-or to the’ lack of alterfiative programs. It is also
-” possi that e substantial number of clients had been-in *the *
wor! "program too short a period of time to permit the —
_ necessMry | development ofskills toe justify ‘transfer or.
change. . woe,
oa . / y . poe
. *, .
oe a Re
we, Be Log
. * ee! . . .
ene ot .
. ‘ .
eK te . / a
. eee, t -
. : ~ ‘
. ‘ « .
oe . ae . .
e . ‘
ot . ae . 7 ’
rn
a !
we : ». .
*, “e . ° ‘
. . ara ie“ . .
re : : an .
6 on
- « ol,
——TM 136 | _« .
5 3, . .
. - @ mys . :



>

a

‘

+ occupancy expenses,

3. Income by type of organization

* (a) Publicly and privately operated prograns

", AvéFage_income for privately operated -
workshop programs was more than twice as large as that of
the publicly ‘operated programs but there was very little
difference inthe average number’ of clients served (Appen-"
dix tables 47 “and 48). The lower average income could’
possibly be due to the funding system; for example, Some
of the public, programs. may have operated their own build-
ings in stdte institutions and did not report building
or the staff may have been; ‘provided
from a’central sourde without income and expenses’ béing
shown ‘by | the workshop. 3°

(b), Single and multiple ‘program establishments

More than two-thirds of the establishments in
the survey were single program operatiois. The multiple
program establishments had a-consistently higher_average’
income from all major sourcés (Appendix tables 45 and 46).
The average income per client: was $3,349 for.single pro-
gram establishments and $4,704 for multiple program:  ° 2
establishments. -The major difference was in fee income. sot
The multiple program est. ishments showed twice the so
amount of fee income per Tlient. This difference may have we 4
been due vier amount of professional services , , .
being provwf é"multiple progran establishments.

°

. 51 . - .



.

- - .. (b) Work activities centeys-,

. oy A comparison of average’income per work: activities
~ center and per client served showed a pattern similar to
the regular program workshop but the work activities center .
total operating- income per client served was only 36'to 42
percent of the regular program, workshop average (TableTM 6).
The greatest difference was in the work proggam in which
*, the three major groups -- meral, mefitally retarded and ee
» mental illness -- showed &ge income per client of only 7 .
one~fifth to ofe-thira’ ° regular program workshop —_ an
‘inco : . oe a

° ,

oy cs The nefaity retarded group centers, representing

‘75 percent of,all centers, had average subsidy income which

« .was less than half the corresponding average for regular
program workshops, and fee income was two-thirds that of ~
regular: program workshops. . .



"4, Hourly wages:by major disability of clients
: Y 2

Clients, in yorkshog. programs were classi fida by their °
. pximary or major handicapping condition. This designation

- is separate arid distinct from the classification of work- -
. shops by the major disability of most ‘of the clients served.

Four disability Aypes - visually, impaired, mentally
retarded, mentally.,ill, and orthopedic -- ‘constitqted, 83. : -
percent of* the’ workshop client pépulation (@able . i
Clients in each of the othar disability groups representéd we
less than 4 percent. The aged group which.accounfed for
‘2 percent @f the client population, was ‘found mostly in- * _
regular program workshops and had earnifigs above the’.
average for,that program; the alcoholic group represented

‘2 percent, yirtually all-of whom were regular. program ° . :
workshop clients with above:average earnings. The cerebral 8

_. ° palsy client was found mostly in work activities centers ‘;
* and earned jess than the’ average center client: : . a

_ as, an -t
Two percént of, the Clients had a cardiac disability and ‘
earned, above average wages in regular. program workshops. .

Clients with ‘neurological disorders accounted fer another
2 pergent and ‘their earnings were about average in regular.
program workshops and more than average in work activities
centers and training and/or evaluation Brograms. The - .
smallest djsability group, those with respiratory disorders,

+ earned above average wages in regular program workshops.
.-Client earnings were tabulated separately for an
‘certificated and noncertificated workshops. The impact of
éertification seemed gregtest for’ mentally retarded clients.” .
In work activities centers average mentally ‘yetarded client) ft
earnings in noncertificatg@ cehters (24 cents) were 3l:per-" ,
cent lower than eainings certificated centers, A similar vl

difference existed in regular program workshops fa yage
M@fferentia} of -28 cents or 30 percerit. The la of'cover- -
age. by the |FLSA would have permitted the lower wages. . .
oe Ty ” so} ae a“ S|
| ° The most significant. variation among disahétity types ‘,
was the substantially higher e@rnings by physically hardi- = -
capped clients compared ta earnings of mentally “Mandicapped, .f
clients and néurologicaily impaired clients. The physically .
handicapped ate consistently found: to be more productive in >

ithis study. - \

. wo ‘ ‘ .

. “oo a re
cet. “ ; a 91° a ae ; ,
. cag en Ae

a ea ; See rs PE tc

oe



5
Table 14, Average “straight—time hour] earnings -of @lients in
. certificated: regular progrdm workshgps by sex and’
* type of work, May 1973 . ay
. . "4 y. :
. ‘ot rT Male > Female
Number :Averagé : Number: Average -
Type of work. , : of : hourly :~ of ‘: hourly
2 : . 4 om sclients: earnings: clients: carming® .
ae | af — >
ATL clients -;. . 15,777 - $1.28 R, 509 $1.22
Subcontract work rr es \ $1.22
Simple bench work — ° ‘© 4,713 1.05 4, 663 , 1.077
Mailing services 83 -95 ag 1.02 +
Salvage - 152. 1.61 7‘, 1.46
- Repair 122- -96 12 1.10
Sewing a 55 1.36 263 1.36
Printing . 76 1.33! . 67 1.17
Soldering 38 1.41 «4 4. y
‘Machine opdration 694 1.38 165 «1.36,
Other . 459 +2600, 2517 1S
; a : . # a
. Salvage and ranovation work _ - oo,
Drivers ; 6-601 2.03 .18 1:51
Drivers' helpers, dock workers 1,366 1.32 20 ,1.30 ,
Sorting . “ 521 1.17 14294 1.24.7!
Baling * : 234 1.20 19. 1.22
Cleaning, laundering, ptessing 245 | 1.25 694@ = 1.13
Sewing, pricing 76 1.32 "4645 1.27 °,
Furniture repair, @finishing 675 1.35 . 53 1.41 :
Other repair, refini shing , 864 1.32 106 1.38 +
Other \ “598 1.30 471° 127°
. \ . yoo
Manufacture of ‘new gdods . a - § en
Mops, brooms, brushes\ 564 4278 °° "106 1.68 |
Machine sewn items Co - 192 181 324 . 1.55,
Mattrésses, befisprings| 88 .1.59 22 1.62
Other machine Product ign 429 * 1/24 107 1.48
Handicraft itenis 7k) 1.14 154- +294
Other 375 , 1.27 ‘ 188 1.07
? " .
Yiscellaneous geoupat {on , . . : .
erical 174 1.61 554+ 1.66
Janitorial, maintenance, | 1,002° 1.31 143 1.10
Food service | . 93 «1.11 1881.22,
Sales . 578 r.47 1,481', © 1.38
Forestryf nursery, farming \ 118 . 1.04 - 26 +78
Other | ' , iu \ 313. Leggy 209 1.43
Sourde: Appendix tables 1179-185., _ ‘
oe *
_ — ~
* . A .
- 106
1 86° - .
. ‘ o
f ' re
5 .



. a SQ
Nn :

.

In the acceptance of clients in all programs financial - —

-support did not appear to be a ‘significant factor.

2. ‘tlient lay-offs for lack of work

Py

The. problem of lay-offs was also explored in the survey

to determine the exten

, frequency and degree of lay-offs

. of clients.

The response by the workshops indicated that

Less than one*third of the regular program workshops

reported client lay-offs.

| _.this was not..a_major problem (Appendix table 29)..... __. oof

Only four percent, of the clients

served were laid off and the length of lay-off was less .
than four weeks for nearly two-thirds of the clients involved.

The problem was even less significant in the other two
programs. Only 12 percent of the work activities centers
reported lay-offs involving 5 percent of their clients.

Less than’ ten percent of+the training and/or evaluation
programs had clients laid-off during the year, and an
insignificant one pércent of their clients were involved. al
In both programs most of the lay-offs were 6f less than

four weeks duration. , ! .



Lge

. : 8 ry

- . . ’ ne

. » - . oa
.Clients-in training and evaluation-programs averaged
wages which fell between the other two programs but this
group is not generally included in wage subsidy consider-
ations because they are considered .to be in transitional -
‘or progressive status in which their productMe capacity
is expected to improve through ‘waining Orgother rehabil-
itative services; in contrast, the work ‘activities center
.client and the regular program workshop client may fave .
reached his oy her maximum Productivity level. :

Cc. Change of Name Consideration

The term "sheltered" in "sheltered workshop" suggests
special treatment, i.e., protection, and some clierts and”
professionals object to the term as "negative, or demeaning:
The workshop questionnaire solici suggestions for an _
alternate term to "sheltered" workshop. } ; _—

Of the 17786 workshops responding, however, less than
half favored changing the name. A significant number of .
respondents favored replacirlg the work "sheltered" but’
retaining the word "workshops". Substitute names suggested
in order’ of frequency, were: (1), rehabilitation workshop;

(2) employment, workshop; (3) industrial workshop; (4) train~

ing, workshop and (&) vocational ‘workshop., /

Suggestions were also mage for a total’ name change
_ which included the term "rehabilitation", "work", "voca—
tionai" or "employment": ’ :

~ oy all

“there did not appear: to be enough -support, for any .
Specific alternate term to justify a change at this.time.

- rn

‘ “oe . .

..

,

; or
‘ ‘ ° ; 7 . + Pd
. mo - ove 7 a os
. . a i
sy: , « i / . a ’ -
—_ . . le 20 . . . .
: . - 149 a -_ .
ve . . 127 , . . . : "Cs
os vo _ Cae a
: oo. *

w



: y . ’

F. Client Placement in Competitive. Employment

,

The ultimate goal of. the sheltered workshop is to place
*the handicapped person’ in gainful employment in which he/she ,
will (be able to function at the optimum level) of productivity
consistent with his/her skills and capability. .The ideal
level of accomplishment is the placement ofthe client -in .
competitive employment ®utside the . workshop at an hourly
wage of not less than the statutory minimum, rate. It should
be recognized however, ‘that for some severely handicapped
persons the goal of competitive employment ma¥ not,be realis-
tic because of their severe physical and/or mental limita-
tions or other complicating factors,

. The State rehabilitation agency usually represents the °
major source of referral of clients ‘to sheltered workshops.
One of the primary ‘measures of the effectiveness of a State
program is the extent of placement of clients in gainful
employment; the level of earnings of clients, placed is also
a most important evaluative factor.

. Placement’ of clients in jobs may occur as a ‘direct -
result, of the workshop staff efforts, the initiative of the
client, and/or the efforts of the State rehabilitation
agency (or other agencies) referring and’ sponsoring the

client. ° -

The total number of clients served. during thé réporting
year was 267,920, and of this group 32,242 clients (12 per-
* cent) were-placed in competitive employment -- outside the

wotkshop. The total-number placed amounted to about one-

. third of average daily client attendance. Two-thirds of
all workshops reported the placement of clients in competi-
tive employment (Appendix tables 97-99).

1, Placement by type of worksiygP program

More than three-fourths of the regular program workshops *

“reported client placements in community-employmen A total
of 13,737 clients or 12 percent of total served duping the |
year were “placed. Training and evaluation progra placed
12,439 clients (19 percent of the clients served in the
reporting year) and three-fourths of ‘the: programs ~

participated. ‘ ~. . .

+



1 .
<... Professional Services . - ein
Workshops also reported on a variety of professional

services which were provided clients either in-house or on:

a contract basis (contract services may have been provided “
in-house or out of the workshop on a contract-for-service , .

basis rather than staff provided). “os

+ The pattern of professional services provided logically

follows the professional staffing pattern.. ‘Services were
provided .inggouse for virtually all programs except for
medical and chological/psychiatric evaluation and diag-
nosis, those services which are generally provided_prior “to ‘

.the client's entry ihto a workshop program (Append? table
87). The size of the client ‘group and their needs for these
services may have been so limited as to make in-house
servites impractical and excessively expensive. .

The services provided most often in certificated
prdjrams were counseling, evaluation and training. Two
types of counseling, family and personal adjustment
counseling and vocational counseling, were provided in about

. threé-fifths of the programs; evaluation was standard in
four-fifths of the training‘and/or evaluation programs and,
three-fifths of the other two-programs; and personal adjust~
ment training was slightly more common than skills training
with more than two-thirds of the programs providing such
services. . , . .

’ -

, A comparison of professional staff with professional

services “suggests that some professional services may have + _ .

been provided by non-professiomal or para-professional

personnel. .

Job placement services, represents an example of

tj _Such

a possibility.

This service was reported by more than_

two-thirds of the workshops but less than one-third.

workshops listed personnel in this staff position.

of the
Also,

some professional services may have been provided by staff

functioning in more than one role, e.g., as counselor, .
evaluator and job placement’ specialist. Such a combination
would be very @ractical in the awerage workshop which serves =.
‘about 40 clients daily ‘and has a limited bud .for profes- ,
sional services@ The.trend toward training clients with .
greater limitations (growth of work activities centers) .
emphasizes the neqd for éxpanded professional services, : -
especially those services which are frequently required for .
the majom population to be served, the mentally retarded
client. Reports from other studies of the mentally retarded .-

> population ind#@®ate a critical. need for personal and social ~
counseling and training. . : . .

. .

-



. -

- Workshop directors were asked whether they favored the
establishment of a Federal wage’ subsidy for clients earning |
less than the statutory minimum hourly rate. More than

- three-fourths of those operating sheltered -workshops favored

a wage subsidy to clients; nearly two-thirds felt that the
subsidy should be based on a percentage of the client's

+ earnings (Appendix tables 129-131).

. .
Member workshops of the National Industries for the
Blind (NIB) and Goodwill Industries of America (GIA) were
even stronger .in support of a wage subsidy. even though the
earnings of their clients were substantial4y higher than the
average for all regular program workshops. More than four-
fifths of NIB and GIA member worksh ps supported the goncept

of a wage subsidy. a 5

Workshops were also asked about the anticipated effect
of a wage subsidy on client productivity and the. workshop's

of the effect of wage‘ subsidy f client productivity work-
shops were evenly divided, @ slight increase or decrease
was projected. by about 30 percent (Appendix tables 132-134).
Some felt that the increased earnings would boost client -
morale and result in higher productivity, while others felt
that there would be less incentive for the nonsubsidized
client to produce it other clients received the same pay’
received the same pay without increasing their individual .
productivity. , : :
. More than one-third ‘of the regular program workshops
and nearly fialf of the work activities centers anticipated
no significant change in client placement in competitive .
employment as a result of a wage subsidy but less than one-
third of the training and evaluation programs held that
opinion. The rest were equally ‘divided between those that
expected impairment and those that expected an enhancement
of: their ability bid place clients in competitive employpent
(Appendix tables 135-137). - -

: \ .

ability to place clients in competitive employment. In terms



' ee - \
fn “@ . a ry
- a
, - PREFACE ae . -
* . . . . . e (
_ This report was designed to provide a comprehensive a
analysis of policies, prégrams and servicés of sheltered . ‘

_workshops serving handicapped individuals..A profile of “ . —

the types of -handicapped persons served, an analysis of . ue

“wage earnings and fringe benefits, a review of the. .

financial structure and the makeup of the staff, and othér

ra + pertinent information were developed! from a survey of the oa :

+ sheltered workshop universe in 1973 by the partment of . »
, Labor's Employment Standards Administration. \. .

The purpose of the study was to provide spdcific
information which will permit ‘an evaluation of the
-effectiveness of sheltered workshops by various i
fe intluding standing committges of the U.S, ‘Senate id House

: of Representatives ,and the Advisory Committee on S$ eltered, |”.
Workshops of the Department of Labor. wf, .

‘ Funding for the study was provided by the Employment .
and Training Administration which had an interest in . .
evaluating the feasibility of . utilizing shelt wed workshops
in:training "disadvantaged", nonhandicapped persons. .

< The study, was conducted’ under the direction of :
Jack I, Karlin, Director, Division-of Evaluation and.
Research. The report ‘was prépared by Claude WwW. Whitehead.

yoo |
. ’



: e
° 2

E. Collective pargefning

Although the right of workers to bargain collectively
with their employers has been recognized for many years
’ handicappéd workers in.sheltered workshops:have generally
fabled to accomplish any degre: of collective bargaining.
In order to be effective in Ollectjive bargaining an . -
. empleyee must have alternatives, i.e., other employment
possibilities. The ha Zcapped employee is in a weak
bargaining positian because the workshép is’ often the only
.source of employment, at least at that period of time. Also
the lack of drganization among workshop clients is an#@her ~
possible barrier to collective bargaining. : .

Organized labor has always been active in working with

national organizations and through Congress to gain better

benefits and improve working conditions for handicapped

workers. Informal diScussions with sheltered workshop

directors indicate a minimum amount of effort to develop

collective bargaiping in local shelteged workshops. Several *

workshops in the North Central Region have collective bar- nd
. “T~gaining agreements with their staff- -and/or-maintenance-and.. .--—- -—~

transportation workers, but their client semployees are .
J , generally. not included in the agreements. a .

-

Only 13 workshops reported collective bargaining’
agreements covering a mayority ‘of their clients. Most
-¢ these were regular program workshops. A total of 758- client's
(or 0.8 percent) were covered “by the collective bargaining
Agreements (Appendix tables 124-128). In a ition three
+; workshops had collective bargaining: agre més covering some
of their clients -- probably the long term client /employees
in ‘tthe regular _Program workshops.

. .



_ val: WAGE PAYMENTS TO MANDICAPPED CLIENTS
= . . - . . 7 .
Avérage annual earnings of handfcapped clients in
sheltered workshops were reported for the 1972 or 1973
calendar a@ fiscal year period used by the workshop, and

hourly earnings for the payroll period including -
May t, 1973.. . \
A. Annual age Payments ~ . eo,

¢ In Chapter VI of this report annual wage payments to

- handicapped client/employees were compared to total opera-
iMw expenditures ana total wage and salary expenditures.
This section investigates differences in wage, payments to
clients by type of program and primary disability group.

1. Distribution ‘of workshops by average client
éarnings . &
‘ ‘Average annual earnings of clients were calculated
‘for each workshop participating in the survey by dividing .
annual wage paymewts to clients by the average daily client

+ attendance estimates reported by each workshop.

. - In_the distribution of workshops by average annual
client earnings (Appendix table 65) nearly one-half of the «
certificated regular program workshops fell in the range of 7

~ $3,000 or more bug ten.percent were: in the less. than $1,000- -®
group. The workshops reporting average client wages of. less

» than $1,000 tended to be smaller in size whereas those

reporting. average earnings in the upper range were; 1ar ger.

The distributi@y of certificated work - activittes
‘centers by average annyal-client earnings shows. that’ more

,000 or more. ‘his distrib on of centers in the above
_ $1,000 range is not consistent with “the level of earnings
. refled@ed in tHe hour ty wage data presentéd later in this |
section which: show average hourly earnings by type of ~ r
‘‘aclient. Projections of the hourly wage data to annual wage ,
. amounts suggest ag average by workshop program of less than
‘one-half of the level shown tin the annual data reported. -~
“since the hourly wage data are considered more reliable, it
‘appears that reporti. errors may have been. “caused by under+
stating the average daily“¢lient attendance estimates;.and/or +
annual client wage ewpenditures may have Ancl ed wages for -

. non-clienteemployees = thus creating san ‘overs tement of
average ‘client wages. : . ‘ -
7 . ‘ or : — . ; .
. , a . . a’
Ay . . , 64 . . . aos

“Neha fifty percent of the center haq’ average client eampings °
of .

-



.

Zs jaining and/ot Evaluation Programsi Annual operating income by
jor source’ ‘and primary disability group served, 1972,

«

oe 5 i —prinary disabiitiy ‘group 1/

Income, source’ : . Mental: : Mental

,*.. : General retardation : Blind : illness

~_ “ .

Average @lients per ‘program: 2/ ‘ 32 26 130 «448 (f

pAverage income per. prSyran: vio ® . \ mo . -+ é
“Work -program income °$ 52,000 $27,000. $18,000 $ 50,000°.
Training and evaluatign | jo.

. a /
fees * / ao . 87,000 40, 000 31,000° 206,000
rN

_ Subsidy income * 49,000 38,000 Cd

ys 27,000 79,000
“Total. income 3 3/- . "103,000 . 7,000 31,000 7000
Average income per client 2/

Work program.income - voy 1,625° ~- 1,038 _ 1,385 .
.Fee ingome . . . 2,719 1,538 * ” 2,385
Subsidy - income

P) . “1,531° ‘. +-1,A461 1 2,076 ,
; fotal income 37 so 7,120 “52,576 | _. 27385, ° 738

.- a or :

’ = .
Ricoholie and miscellaneous 2 sgroups. were a) small to ne compared,
amb:

.°

‘Average daily client attendance. .
Averages do not add to total due to differences. in n er of programs.
» reporting income by source. . .

7
y

Source: Appendix tables 45-49, , . : A 62

. . . a
. ‘

61 ~ -O oe . . : . . _ -_ a



et

“ale , ence in the average level of expenditures:

* , . *
. ‘ . on '

a | , cos
A distribution of fringe benefits. per‘client served
“daily in*the reporting year also shows a. significant differ-

Average annual’

Lf . . _ Average _ expenditures for
~ daily client fringe benefits
. . attendance “Amount Amount |
Type of workshop . per}. - per - per
‘ program . workshop workshop client ©
- . ra =r 7 == :
Regular program . , . .
‘workshops . . 43 . $6,906 — $161
Work activities «enters 40 857° - ‘21
-Training and/or evalua- : wo,
tion programs . 29 » 1,489 , 51 -

B. Provisions for paté Holidays, Vacations and Sick Leave"
~ F -

. The percentage of workshops providing the three benefits
was highest for holidays, possibly because the entire work-

shop closed, ang lowest for sick‘ leave.

The provision of these’ benefits may have been reflected
in“angual expenditures reported but because there are many
. workshops with relatively small operating budgets the .
- accounting system may not: have recorded these benefits as a
separate cash expenditure.

« 1. Paid holidays .
. . . ’ oo
More than'half of the certificated regular program’
workshops, representing nearly three-fourths of the clients,
had provisions for paid holidays (Appendix tables 104-108).
The larger percentage of clients indicates that the larger
shops were providing the benefit-more often than theTMsmaller
ones. Most of the workshops providing such benefits aver-

aged six to nine paid ‘holidays per year.

-One~fifth of the certificated training and evaluation
programs, serving:slightly less than one-fifth of the clients,
als6 paid clients for anaverage of six td nine holidays
per year. i : a

.

. * . ‘

‘ only one-sixth of the certificated work activities °.
centers’ accounting for an equal proportion of the clients,

~ pravided for paid holidays =~ mostly foy six to nine days
annually. : . ae

.

’

ce Oe



“* po
“h

lation size

. The study findings. are difficult td ;
of the many variables including client volume’ (target ' -

gumnarize because |

financing and administration.’ The Compre- ~ uO
ive Needs Stuay has relevance to the workshop study, ,
because it deals, with the problems of severely’ disabled

persons, a large percentage of whom could benefit from
+ servic@® generaily provided in sheltereu workshops including -

to buildings,

seling, and social. work.
study -- housing, transportation, mo
social attitudes, economi

personal ‘adjustment training, family. and personal goun- . I
Major barriers: identified in the _ :
ty; physical access Se el
disincentives ‘and . .

‘ °, funding resources’ -- were also identified By the Greenleigh
x research sponsored by the Department of
tion and Welfare as barriers to clients .

Study and o

“ Health, Ed

ve seeking services ‘and/or employment in rehabilitation o
a facilitiés,“ "especially workshops and- work activities centers.

* little hope for employment *

because ofthe complexity of their needs.

The Study concludes that the severely aisdpiea have
‘in the competitive labor market - -

It recommends vos

that, the workshop movement’ be expanded to accommodate an
estimated@ne million severely disabled persons who could

ey?

7 benefit from extended, long-term Sheltered employment. ~

x



All overtime hours worked.in a workweek must be bata for At
“ not less than one and one-half times the regular rate‘at*
which the worker is paid. ‘Under FLSA, workers must be paid
-* at premium gatés for all hours wo! d over 40. Under PCA,
workers are required ‘to be paid a tbrenium xates for all .
time worked- over .8 hourS a day’ or, 40° hours a workweek, which-
ever results in the greater number of overtime hours. with’ .
respect to work performed , Overtime, pay may be

unger sc
‘ required by the FLSA: or-the ontract Work Hours and Saféty
or all

Standards Ac which may also” require overtime pay’
time, worked over @ hours a day or |40 hours a workweek, which
of overtime hours. Under

ever resultsjin t greater numbe

SCA, fringe |]
$2,500.

D.

Worksheds are required’ to keep records a ;
Regulations, 129, CFR Parts 516 and 525.13. Re s 6f Glient
productivity,} time Studies, piece: rate “determinations, ~~
client wage reviews, industry prevailing ‘rate findings, and"

records on pr
- : : . .

\

et out-in -°”

icing of work are included in the requirements. |



7 . - . ; Loe

. Eighty-three percent' of the certificated regular

“program workshops provided worker's compensation insurance
as. compared wth tworthirds of work activities centers and
training and/or evaduatio programs prbviding that benefit.

, Social Security coverage is not mandatory for employees
in nonprofit organizations but wogkshops can waive their ‘
exemption and provide coverage for clients employed in the
“program. .Clients working’ under Social Security coverage for ‘
16 quarters at a specified minimum earnings level can become aa
eligible for disability and retirement-benefits. ’ This is- .
especially important for the client with no previous empkoy-_ an
ment under Social Security coverage (Federal Insurance
Contribution Act). More than three-fourths of the certifi-
cated regular program workshops provided this benefit. te A
More than half of the work activities centers and traifiing |
> and/or evallation programs participated in the Social a
Security program. - Two-thirds of the clients in all programs 7.
were Covered. . ty ; :

w
: '

A Accident insurance for, non-job related injuriés ranked”

»-®nird with participation by- it percent of each Of the three
workshop programs. . o. .

About one-fifth of the regular program wiexkshops
provided life insufance and ‘a like number provided health
‘insurance, but an insignificant number (one to three .

- percent), of work dctivities centers and training and/or *

evaluation “programs reported that benefit.

. * Retjrement and pension programs were not common in :
workshops, probably becaus® clients are generally considered .
to be short-term employees. - None of the work activities, °
centers or “training and/or evaluation grograms and only
five percent of the regular program workshops reported the »
provision of this benefit -for their spients. . ‘ a

s, AS previously indicateé, clients in sheltered workshops ar
are generally excluded from unemployment insura e, except ¢ t
where they become regular employees (not receiving rehabil- -
s: itation services). As consequence, only 15 percent of the >
" regular programs workshops had unemployment insurance cover- .
age, and only 3:percent of work activities centers and' a
training’ and/or evaluation programs. : . o

s . tee oe tos . - _



yo ‘ae

. ow .

The. concentration of aisabiliey. types in. workshops .
seemed to-reflect the ‘gengéral level of physical and/or mental
function of the’ type of client. *Blind/visually handicapped

’ elients were’ found mostly jn regular program workshops where=
as most of the mentally retarded clients were served in work‘
activities, centers. Mental illness clients were distributed *
almost equally among the three programs but three-fourths
of the orthopedically handicapped clients were found in
. Fegular “program workshops. . ,

e

F. Sex of Clients . oe vs =

eR

The May 1973 payroll data also ‘indibatea the sex of .
clients: fémales comprised from 43 to 46 percent of clients

-¢ an the programs and amales from 54 to 57 percent (Appendix
table 14) . 7 : he

G. Average Daily Chient Attendance x0n) ~ . : . .

’ Workshops reported an average daily client atténdance
| ~~ “for the year-of 98,076 clients~in -ali-programs-. (attendance ...
during the survey week of May~1973. was 88, 791 or 91 percent
‘ . of the anual average daily attendance) ,
.. - os ¢ ad
‘The average di ily attendance per workshop establishment .
“yeporting, was 55 chients. The average daily client atten- .

1

\ _ “dance per, workshep program was as follows: . . . id -

| . : Regular program workshops ~ ! 43 : . 7 . _ 4
| . . «f/f.  Work-activities centers 40 .

Training and/or evaluation _

* -) programs” , Tod 29> oy

. » More than one-thita. efethe regular rogram. workshops
and work, activities, centers had fewer than. 20 clients “{ADA)> +
and three-fourths had fewer than 50 clients. . : .

/
The training and/or _evajuation programs tenes Od be .- rare
“even smaller in client. Size - this was not very signitie ’ .
cant..because 85 percent ‘of ese programs were ongrated ; as
parts of multiple program’ al lishments.



e

.

3. * National ofganization member workshops | ,

. . ad .
“The placement “of clients by certificated regular program °

workshops which were members of national organizations shows
‘an interesting variance: Natiénal Industries fox the Blind
(NIB) workshops, (averaging highest client wages) placed only
four percent of~ehe clients they served annually while Good-
will Industires of America (GIA) workshops faveraging secorid
highest client wages)’ placed’ 11 percen.‘of clients served.

Placement froh training and/or evaluation programs was
“22 percent for both GIA and NIB members, two Percentage |
points above the average for certificated programs.

/ 4. Client tenure ~

A!
The average client placed jin competitive employment | oe
from certificated regular program workshops had been in the
workshop between three and six months; three-fourths of the
clients, had been in the workshop less than a Year. Half,o
the “ckients ‘were placed zn jobs for whith they were traine
and only 14 percent of the placed clients had to return to
the- workshop for more training. awn
* Work activities center clients placed .in competitive
jobs had stayed 6,to 12 months in the work activities center
~.on the average; most of the placed clients had less than
two years in the centey; slightly less than half were placed
in jobs for whtich they trained and the recidivism rate was
16 percent. . : o
- ‘a
Nearly two-thirds of the clients placed} from training .
or evaluation programs had been in the program six mohths
or less. .More than one-half of the clients were placed
in' jobs for which they were trained and only 10 percent
failed in their initial job placement. : oo

5. Beginning wage rate J ,

One of the criteria used for measuring successful
placement of-clients is the starting’ hourly wage. (The
statutory minimum hourly wage 3 rate was $1.60 at the time of.
the survey). . : <<

Ninety percent of certificated ‘regular program w6tkshops

placed most of their clients at $1.60 per hour or aeore; more .

- than one-fifth reported starting wages of at least $2.00 an

hour (Appendix table 200). ; ry
. . é 134 ae ce
. woe 13 oo . a .
ae oe
‘ ral as



sources provided a major share of th ‘subsidy in the-other
disability group training and/or ev#luation programs except
for the blind group which reported, almost egual amownts from-
_ public and private ‘sources. /

EB... Operating Expenditures
>

Workshops reported: annual @perating expenditures by
major category for the reporting year (Appen@jx tables 52- °
58): Expenditures, are influenced’ by tle amount of opérating :
income available In ay undertermined number of workshops,
income and- expe: itures were, separated into two “categories: .
fas i Ran
. Industrial operations - - related to the work .
Program, ‘and
= Rehabilitation services ~ related to the pro- .
* _ sional -serviges provided to clients,:

. ‘ . in luding evaluation. and ‘training. :

Income from the work program is “generally used to pay
expenses related to the industrial (or work) operation, ana?
income from fees is used to pay the-expenses related to. the -
provision of rehabilitation services. Subsidy income is ~ .
allocated to underwriting the deficit jnd¢urred in either, ~ o-
operation but the majority of workshops appear to use subsidy ~
revenue to support the rehabilitation services program.

Financial’ data collected in the survey did not séparate |
expenditures into” the -tw6 divisions, because of eh difficulty
anticipated due to-workshops not maintaining separate ‘account=* _
ing for the‘two divisions. The workshops are required by
_the Fair Labot Standards Act to maintain separate records . _
for work activities centers operated with other workshop pet
programs, but there is no requirement for separating work ~
.program and rehabilitation services costs. - _

et

_ + Workshops are generally - relatively small operatipns,
especially work activities ceriters::which had average Opera-~ |
ting expenditures of $67,000, and training and/or evaluation -°
- programs in which the typical pYogram had operating Lot
expenditures of $79,000. . vote coe, . ood

1. Major expenditures by type a “ : . os .

Table 8 summarizes TM Gependitures by major source and
average per eprkshop.- The five to six percent plant and we
equipment: éxpenditures reported do not’appear to include“ hed
capital investment. However, some workshops: which do not- 5 _¢
havd speeial "capital" funds as a resourse may rely entirely ~*~. +=:
on earned or’ subsidy income for all plant and equipment ,
expenditures. . .

56



OTT .

+

4

130

_ Table18.

, workshop program

. . \

Qistribution of clients reférred
. . and Training’ Programs in 1972 by

by Marfbower Development
outcome and type of «.;

. Dropped -out

. 3 : 3 Successfully < 3 Placed in
‘ 3 : : completed. :before completion: .competitive
. 3 3 . : - training sof training employment
‘ Type of program x Number, : :Number + Percent :Number 3, Percent jumber : Percent
, ; 2 Cf : ‘Total : of : of total: ‘of fof total: of : of total
.:workshops« referrals:clients:referrals: clients ireferrals: clients:referrals
. All ‘programs 4 244 3,855 1,815" 47.1 954 ‘24.8 1,086 28.1
Certificated programs - .
Regular program ~ - 7 . , * a
workshops 117, .- «1,754 782° «44.6 504 28.7 468 26.1
Work activities Los ~~ . oa
centers 35 163 87 53.4 40. 24.5 36 22.1
Training-and/or »~ « ‘ ~ v
* evaluation . = ’ .
. Programs’ . . 70 1,495 787 , 52.6 331 22.1 377 25.2
Non¢certificated ' ‘ . me
Programs oe : : .
Regular program °
workshops . 10 . .361 116 =, 32.1 62 17.2 _ 183 50.7 7”
Work activitiest’ - ' toe . .
centers 5, . 10 3. 30.0 6 60.0 1 * 10.0
*‘ Training and/or -¢ ‘ Z .
evaluation . .
programs — 7 72 40. 55.6 . il . 15.3 21 29.2
z ‘ “ . ~ mn - ny :
Source: Appendix‘*tables 102 ‘and 103..



rs . * Fa « . . 5 . .
pute on ; : . $x, - *
a . wee r Ole. oan,
Y ty 4 : cof . . f°
4 _ . . Table “10. ‘ Average « strat ht-tine hour] earnings ‘of clients in certificated sheltered ‘workshops | =
. . . soos aby type ot of cl ent and pri Pond LY group served,,by workshop, program, 1968 and 1973
. oe ; eo (comtinded . : ;
7 : . ® oo i“ c . ‘ows
~ Type of client, and. primary Average di . La Average hourly Client earings
* disability group served by” . r yt Change
oo “workshops — < Anount f Percent
. . et, ~ .
dork ea en center tlients : ye
. . woe, 4 a . ’ 4 .
General * D2 1,942 6,84] 4,899 252+, $.42, . $.40 $(.0) + (5;
_ Mentally retarie: 9,997 30,429, 20,432 204. | 382% 38 (02° 6
. + Blind oo - 8 9 24: 274 rr «13 32
hentat dings . 1 He . Ree * 3,054 497 »- “45 107 18
_ * Miscellaneous "1,479 4) (36) : a "40
we Total. *. vs » ET FT 922:., Se ‘ TIT 4 e
, * os oo \ , prot . . . a
; Trainees and evaluees _ . . | ‘ .
+S Genera” © 104 7,357 ., 3,253 nn 08, 14
J. * Mentally’ retarded so 1,872 | 3,923 .- 23051 To 44+ 82 18
: Blind mt . 7273 185 “9 ( 88) - (32) 91-476 (-21) (23) TM
Riset anni ~ , * 1198 ‘ ae 34 66 fey / 09. 14°
scellaneousTM Do 6 : 12) - _(81) 45 239. *(.06) © _ 13
. - Total - 2. ONT TT ae / 37 , ve
, : Individual excéption clients . ye . > me . Po
‘general: (255 2,935 «1,680 134 a2 0.02)" BY
Mentally retarded sy 021 2,068 1,047. 103 55 61 06 It
Stind 391 141 (250) (64) 94 ‘91 +03 3)
Penta ines” : 67 +66 ow . 1"
Soe] laneous 61 +63 .02:, >
_Totat® a (702), By

a
“



a er’ . . g

fe . the,‘primary objectives of the, study were as follows:

ly, To’ determine the”feasibility of raising . i ?
za existing wage. standards for shejtered work-
. shop clients; , - oe se :
_£.2, To ‘evaluate the effects of separation of the
woe _ «+ work activities senter clients (incohsequen- 4
_ tial producers) from. regular program clients # . [
(bettér producers) as provided by the 1966
a * Amendments to the FLSA; ~ -
P . * 3. *fo determine the prevalence, extent and type
nan ot of fringe benefits provided to handicapped
2 cs , workers, and th ix participation in collec- . 7
Te, tive Bargaining; . ° -
. “To ascertain the workshops’ capacity for a
nnd ..gerving additional clients; \ . .
_i,....... Si: To evaluate the workshops', potential for

: _+, Serving disadvantaged; nonhandicapped =. % +

: * persons; .° - _ -
. . 6. fo determine the extent of educational
; .',  ,and/or therapeutic programs and services s
. ot : . required to enhance the movement of handi- .
" " capped clients into, competitive employment; -

. and .. : . “ 7

i, 7.2 To evaluate the impact of Federal gmployment

.. ‘and,training programs.on sheltered workshops. °

~ a Secopdary objectives of the study included:
weno: . .

“41. . fo identify the types of commodities: and .
- _+  {epervides available for procurement by-the .
aw * Federal goverhment uader the terms of the

a et, = .' +Wagher-O'Day Act- (Public Law 93-28); and ° - _F
oan -., 2.° to identify additfonal legislation~and/or . oF
. wt . legislative changes necessary to enhance Z
oe Lo employment opportunities for handicapped . .
a . . ‘persons.’ - .

. , : a te



- . . . f
_*% The cause of the-short workweek was not explored in
: thig study but reports and comments from directors of work
* activities centers and other authorities suggest several”
possibile redsons: Severély handicapped clients may not n .
shave the physical or mental tolerance for longer work ma,
periods; the clients may have been involvéd.in other
(therapeutic) activities during the day or\week; there may
+ not, have ‘been sufficient work to permit @«jonger workweek;
_ and the dependency 9f clients on others’ for transportation. \
may. have- required extensive busing of ‘clients on variable | -
or shortened schedules. Regardless of the reason, nearly a ‘
third of the clients in work activities centers were in pro- - a
: grams which averaged less than 15 hours a.week.-

. 7 : : ,
. The short workweek in training programs may have been .

caused by client involvement in classroom or other group /
instruction in addition to work, Clients in evaluation vo
programs may have been engayed in testing programs, as well.
ag work, as a part, of their evaluation oO

+ > . .

, 12. Method: of wage ‘payment: 7 a ‘ c
7 # > 7
. Two methods were .generally used in payimg wages toTM —
“elients. FLSA regulations establish minimum (floor) wage ~ Lye
rates ofily in regular program workshops but require payment: .
. in all programs of wages "commensurate with productivity", .
i.e., payment of wages equal to that of a fronhandicapped _~
worker doing the same quality and quantity of work. Work-- oa
shops may pay on an hourly rate basis or.on a piece-rate ~ .

_- basis but wage rates must be based on the productivity of

nonhandicappéd workers in industry in the vicinity:

Nearly two-thirds of the clients in certificated regular -
‘program workshops doing covered work were paid’on an hourly
rate basis; one-third on a piece-rate basis (Appendix. table .
186). Lott . : \ . -
“\

The .reverse was true in certificated work ac ivities . we oy
centers. Two-thirds of the clients:were paid on 2 piece-rate - wy
basis and one-third on an hourly rate. In training ‘and/or ‘
evaluation proggams the two methods were used about equally. =<,

a” - _ . . a” . “ .f
13. Skill level of clients i -] . st

Workshop respondents were asked to distribute total hours .
worked during the, survey week by the degree of skill requixed ~
on the work performed by their clients. . . ‘

a ‘ . : . . “ on =



met to,bé adequate: to support. the Shdustrial Pro-. foe,

woe. , . s
so . a ” * . ‘ .
uniformly. provgded to workshops; more than one- af
~“third-of the workshops reported no feé “income. _

./and- ut one-fourth shewed no subsidy income. .
Also‘fee income was generally réstricted to .

- rehabilitation services and ‘could not be used-, '

“to support long term employees.

a ‘The -annual operating budget for the average , .

+, regular program workshop serving‘mostly mentally.- °  .°
retarded clients was only $98,000; and $74,000 :

+ was the average opérating income in work ‘ .

“Fees and subsidy incoi .

. of the operating budget jx ‘ogramrwork= —
shops, 68 percent in wofk ; .
and 71, percent in trainin /° ,

. programs. The level of séverity of the client's. .
disability and/or the level of service being . -
provided influenced support wlevels. — ,

The income’ from the work'program did not seém ,
’

. gram of the workshop, .especially in work a)
, ‘activities centers and in training andYor :. °° .°

: ‘evaluation programs.'where the’ ‘amount’ of wage, . .

e + payments tq clients represented two-thirds of .-

_ &he work program itome. An amount equal. to “

, ‘one-half of the work program income was paid ~
ser ,out-in client wages in regular ‘progrart’ :

workshops. °, “ :

- 1 . _ . _
I. The size of the client. ‘group’ p. the workshép a
., Seemed to imfluencé services, age-earnings , ,.bh |. -
-“" of clients and other bene@ts. , average a.
laily attenda nearlygone-third of the * .
‘workshops was fewer than 20 clients. ‘Three-
fourths of the workshop programs had fewer .
. than 40.clients in average daily’ attendance.,
_ The small size made it economically impractical
. to provide -coniprehensive services and limited
the size ‘of ‘the subcontract jobs-whidlthe +

woxKshop could undertake, ae ~,



oy, _disabil tty y group served by - c
aa workshops - A rw: 36 oi
: oe rt . oi ‘
. . oa . Pa a sf _ ‘ . an
Selected national orgaaizations > ioc ‘ : . =
tog “ft on ' » : N
- ry : a 7
f a {6 an a , : 1 ee
Regd laralients . * 5,919" 10,897 4,978 84 $1.31 $1.47 $16. - 12 _ eo
Work activities center os : a ie ; . . — a . we
clients 351 939 | 168 +38 35° (.03) (8) : aan Toe
: « Trainees -and/or’ evaluees - 1,301. , 2,710, 1,409 108 52 65 13 25 . .
Qs Individual ‘exception cltents | 591 867, 276 47 . 85 ~_ 78 - (8 . .
a awl clients, mt be lee MTT - Oe ny a
Natfonat Industries = . . . . . ~~ — .
= ‘or. 7 r . . -
. oy : ha a al Lae - oop
Regular clients + 2,217 - |» 24896 6m) 2 Be 1.54 1.74 - ~ 20 Bo ~
fb -~Work activities-center cHients ~ 8 “~ 82: TA 925 BBE 13 3} : 1 oF
. Trainees ‘or evaluees , 182 172 (10) (5) 1.04: 91 (.13 13): ed ‘
. ‘Individual exception clients © 321 ii 10) ° (ga oe "99 1.0¢ + 05 +.) _ 5 ! a
: “. AML clfents _ ooo) £m , @. - Tat Tt nee oe
y . .

‘

-

5 ~ . . - . ,
» . ° : . 1
‘ : e

Table Wy Average stratgnt- tins. bourly “earntth of élients in certificated sper fone workshops -

“by: type of client ,and “primary “disability ‘group “served, by workshop program, 1969 and 1973
we ; _ {Concluded} :

‘Hype OF client and primary. ¢

’



‘ . . + ,

5. ‘Hourly earnings by sex and race 5 y
fe J,

The workshop population was almost evenly divided ©. ”
‘betwéen males and females but male clients earned more than
female clients in‘most programs (Table 12). .Averaye hourly
earnings of nonwhité clients were consistently higher than ~.
those of, their white counterparts in,all three types of

works&op programs. ~ ° . Loma t
. ‘oe ‘ te . . , ~
. . ae
- afm.
ey a ne . . r .
. an
. . ‘
‘ .
5 = .
. + ' , , N , 07
toe 4.
. .
1
. . NS ~
, te
Un
:
: 1 i ~ :
2: poe
. a) 4,
son
i
- \ .
. ‘ \ - i
< . c .
s . 8 . .
. /
( ‘
. :
160° '
- . . ‘
: - . “,
* a2 5)



2% y?
. . *MAJOR FINDINGS — r a¢ . 7 ms me
- ’ . . . an at
_ . This study gathered data/ fro more than three-foutths .

of, all known sheltered workshops¢ A total of 2,530 workshop

programs (regular program workshops, work activities centers, .,
and training and/or evaluation programs) operating in 1,786 © '- °*
establishments ‘reported data on operations, ‘policies, proce- ‘
Gures and services. The’survey represents the most compre- — ..
hengive ‘analysis of sheltéred workshops ever undertaken.

A detailed description and evalvation of the findings. ‘
of the Sheltered Workshop Survey are présented in Chapters q
V-XI supported bv tabulated data presented in the appéndix.,
- The major findings were related to one or more 6f the: objec-
: tives of the: study: ° ad /
. . te . € a : e
ws. ‘ A. Client earnings increased very jittle in . | j
. ‘ the five year period since the laSt DOL

a s wage study. Wages of regular clients .
* increased by nine percent, work activities. °
. center client wages by six:percent, and
"training and ev@luation client wages by . >,
- eleven percent inTMthe period 1968-73! .
way of comparison average hourly carne
of production or nonsupervisory workdrs on
piivate nonagricultural payrolls increased
bY 38 percent in the same period. V/ .

Although the average hourly earnings of

clients in-each of the three workshop Qa

programs increaged the combined average 6

hourly earnings of ‘all workshop clients . ‘ an

‘ actually decreased by fqur percent in the 1

cA 1968-73 period. This was influenced by the .

\ . much greater ificrease in t size of the es

: Iowest wage group, work activities center '

” clients, compared to,the other two programs:
Work activities center clients represented
+36"percent of the workshop population in .
1968 and increased to 49 percent in 1973. ’
This group -+ generally considered, to be .
severely handicapped, inconsequential pro-. ‘
ducers -- continued-to show the greatest ‘a

ty : growth in the years, following the study.

Bo a . ~

. 7 . os .

I7 U.S. Department of Labor, Bureau of Labor Statistics,

Handbook of Labor Statistics 1976, Bulletin 1905, p. 186.



Nearly half at the MDTA clients successfully completed:
training and more than one-folirth.were placed in competitive
employment. ‘Certificated ‘regular program workshops and
training and/or evaluation, programs sdrved 84 percent of
all MDTA clients and they’ were more successful than non-
certificated programs in Glient completion of” training,,but
they were less successful in, placing clients in competitive

employment. . . wrt - on

Workshops affiliated “with Goodwill
America accounted: for three-fourths of the

tedustries of:

TA clients ‘

served in certificated regular program wow!

shops and nearly

half of all MDTA referrals. National Industries of the
Blind members had only one percent of'the MDTA referrals
‘(Appendix table 103). ° s

BE. Disabled Véterans Served

Most of the handicapped persons served in workshops’
come from the civilian sector. Disabled veterans are
usually. served by programs’ operated by e Veterans Adminis-
tration (VA) and wage payments to vetefan/ciients in VA
, programs are: regulated through the U.S. Civil Seryice
Commission.

Disabled veterans may have been peived -in-non-VA ~
workshops in instances—in which no ‘VA’ facility was convenient
to the client or in trainifig programs in workshops which met
VA standards or requirements.

A “total - of 1,040 disabled veterans were served ‘in all
workshops in the reporting year. .This number represented.

- 0.3 percent of all clients served (Appendix table 103).

Regular program workshops’ served the highest numbei; '
669° including 217 Vietnam veterans and 452 other veterans.
>
Three hundred and thirty-three disabled veterans were
served jin training and/or, evaluation programs, 181 Vietnam °

veterans and 152 others. »
.

,

.



_

t

ability and type of ‘workshop program,
"May 1973" (eontinued)

1 °

Majér-disability and
“type of program .~

Certifiéatea ae Noncertificatea :
_gorkshops \ _workshops
“ys Average . Average

~—'- @lients — ~ hourly Clients hourly -

Number: Percent earnings er:Percent . earnings

, Cardiac

se

Regular prograwt"~"

. workshops

Work activities
centers

Training and/or
evaluation programs

° Neurological ‘disorders -

Regular, program
workshops .
Work activities
centers / ‘
Training and/or
evaluation. programs

Respiratory disorders

‘ Regular program
.workshops
Work activities on
centers

- Training and/or ) .
evaluation programs

Ey tb 2

.

- L . i a? “. ‘
$1.46 GAB
52° "138
, -B1



b

IX. CLIENT TRAINING AND an)
. . ,

Frnformat ion" gathered in the’ workshop’ survey and: from: _ 7
ot! sources suggests that there are primarily two major « . - .
types of training, provided in workshops;

‘and work adjustment or

skill training,
Personal adjustment training. Work
adjustment and personal adjustment training -is discussed - .
in Chapter'X, Staffing and Professional Services. This . > - -
‘chapter is concerned with, skill or vocational training. not

Few sheltered ‘workshops are considered to be tradé
schools or vocatiorial educatidn facilities although some
workshops acteelly operate as a supplementary or comple-
mentary prog: ‘toa school. A majority of the workshops -
Operate programs which are primarily qn-the-job training
with limited if any classroom instruction involved;

The DOL in administering Section 14(c)’ of: the FLSA is
conderned only with: those training programs which involve .
production” of goods and/or services by the trainee (client) .
‘for the wor) ~(ivev, when-therets~an- employment relation="

Ship betweer*the client and the workshop).

If there is no

production in the. training Program then it is not subject
but such training may nevertheless, have .been
reported in this survey, because no clear distinction was

to the FLSA,

madé on the questionnaire.

Virtually all regular progr.
and evaluation programs indicat

workshops and training
thatthey provided some

form of training for clients; only. four;fifths ‘of the work . .
#vactivities centers jreported trairiing provision (Appendix °
table 93). 8 ' - .

. . ‘
‘ wot :
a a.
~ «. -
- .
s 7 a
~ . : 4 wt
; . ‘
dl ‘ - ‘125 ‘ .
- , 16 ,



Average straight- time hourly earnings of clients i
_ certificated training and/or evaluation Programs b .

, . sex and type of work, May 1973 .~*

Table 16.

Female

Source: Rppendix tables 179-1

=

. -

90

85.0

Ano

\ . 3 Male <F
. : Number:Average : .Number:Average
Type of work : : of : hourly of : hourly
:clients:earnings:elients:earnings
All clients 9362 $ 64 5,442 $_.61 f
Subcontract work - . ° ‘
“Simple bench work, 3,637, 63 3,075 61
Mailing, services 111 . 60 96 56
Salvage ad 136 -53 7.52,
_Repair _ 125 »51 13 42,
Sewing 1D 766 114 2960 C0
Printing 77 58: © 22 ~62
Soldering 20 1.07 19 295
Machine operations : 344 279° 77 -81
, Other 267 64° 117 -61°
“ > . . —
Salvage,and renovation work, : {
Drivers 22 86 3 - 442 .
Drivérs' helpers, dock wotkex® 171: -68 6 51 ‘
, Sorting ~ . _ 98 “49 151 +525 *
‘Baling . . a 24 56 s +68
Cleaning, laundering, pressing 41. 5 125 -78
Sewing, pricing. : 22 4 5 68 57
Furniture repayr, refinishing 178. 2 '.51 23 48° ‘
Other repair, refinishing 165. J .67 15 59
. Other ; 207 54 129°. 48, al
Manufacture of new goods . oo ‘ .
Mops, brooms, brushes 13 1.29 “8 1.08 .
Machine sewn items . 13. +65 43 , 63,
Mattresses, bedsprings - _ 4 80 gr 7.47
‘Other machine production 144 “479% 43 65
Handicraft items 157, 49 97 -40 -)
Other : 126 61 55 63
Miscellaneovs occupations o
Clerical 127 79° 261 80
. Janitorial, maintenance rc 521 -70 133 48
Food service “S250 65 295 61
‘Sales "te. \ 44 67 110 | «68
‘Forestry; nur gpry, farming ~* 54 369 1 ~80
Other 6 . - 350 57 269 57



‘y! Ly

_« Wage ary expense .was “the most impogtant item, of.
-yepresenti: than ‘one-half of the regular program work—-
* shop’ expen itures and two-thirds of expenses in work --: @

og activities centers and in training and/or evaluation * Jt

* inge * peneri€ expenditures yere rejatively- low compared’
) luStry standards. A-separat® chapter discusses the --.

. : limited benefits provided to ia. see ‘by workshops.

* Expenditures for production matefials were substantially :

++ higher in regular program workshops than in the other pro- ~ |
grams ;“Brobably due to the greater involvement ip manufactur-

> ing, in regular program workshops. : . - 0

see se supportive activities expense’ included expenditures for «
_ \ Aincit ry programs (@.g., recreation, meals, transportation .”
-"* ‘and therapy)’ and for rehabilitation department operation.
~~ The extremely low percentage d ayeragé suggests that some _
rehabilitation expenses were not separately reported; for
3 - example, the wage and salary~ expense included profes8ional
~ staff salaries which might ‘otherwise be reported eunder
rt supportive sactivities expense. oF Bn a

woe ee ‘

‘ “2,. Wage and ‘Salary expenditures ‘

This item provides an ‘indicator ¢ of the eles
_ préfessional staffing and administratiye supérvisiom pro-
-- vided-by the wosjshop. | A separate chapter is “devoted, to.
arfalysis. of jWage, paymerits to handicapped clients (which
+ xrepeesented ’” more than jhalf of ‘Salary and wage expense in -
-regular ‘program workshops but less than one-third in wopk
. activities centefs and wpeining and/or evaluation ‘Pregpene)
= ° ,

programs. ~ - 6 . : . *



. » ; _ . «

in workshops employing non-blind severely: handicapped- - -
persons was minimal At the time of the study because the ©
new provisions had not been fully implemented, Of 58 ..
workshops reporting mer-O'Day jrork only 13 workshops
serving other than blifd persons ‘were involved. The-total
jagner-O'Day work income for these workshops amounted to

nly $104,000 -- less than one-half of one-percent of the -
total. But 45 blind group workshops reparted a total of a
$20,030,000 in Wagner-O'Day work income. < An informal 1976
report om Federal government sales under the Wagner-O'Day- | ~
Program estimated sales potential at 50 million dollars _

for workshops for the blind and 10 to 12:million dollars_

‘for workshops serving other severely’ handicapped: persons :
in 1977. 1/ ; , pee aa .

State government work flow to workshops mostly. - a ve
developed from enactment of State Versions of the Wagner- .
O'Day Act in several states -- according to.infor! reports

from various State rehabilitation agencies. Workshops also’.
secured ’State work through direct bidding ‘on, contracts’ but -
the extent was not: determined in this study. A total of - “yc
_ 107 workshops reported a total of $3,575,000 in Stat@TM -
governnen ork representing 2 percent_of total work income.
Nongovernment work accoynted for 87 percent of the
work program income in régular program workshops and 98,
percent in work activities centers and training and/or.
gvaluation programs, (Appendix tables 50 and 51).
. .. ”, .

Ce Income from Training and Evaluation Fees . .

Neadly two-thirds. of the workshops reported’ incomes <
from fees. Of thé workshops which received' fees-43 perce!
were multiple program establisiments, and 57 percent .
operated as sjngle program estab ishments. The fee income .
“ae divided 63 percent to multiple-program_establjshments *

“37 percent to single program establishments. ~ «.. . ’
Workshops traditionally have been closely associated ‘ .

with the State vocational rehahilitation agénciés as ~ .

evidenced by special provision Ain the 1965 and 1968. Amend- -

mentS to the Vocational Rehabilitation Act and thé Rehabil-

_ itation Act of 1978, which authorized. and directed special "
programs in sheltered workshops.” In 1972 State rehabil--~- | a
itation agencies referred ‘199,000 clients to. réhabilitation vet

facilities including workshop’s and they: expended $110 million .
in fees to support rehabilitation services to those clients. . 5

17 Committee for Purchase from the Blind and Other Séverely ~- :

Handicapped, "Report of the Executive Director", “September ° .
1976, : , :
‘ 54 + . wo
: , .
_ 66 ne



IIs FEDERAL REGULATIONS °

A. Coverage . oy to

' Three Federal ‘minimum'wage-laws administered by the DOL
affect the employment of handicapped persons in sheltered
“work shops : . > . . .

* .fhe Fair Labor Standards Act (FLSA) applies to
employees engaged in- interstate commerce or in the produc-
a tion of goods for interstate commerce and to enterprises
__'_. engaged in commerce and in the production of goods for

> “"“Gommerce ag those terms are defined in-the-law.-On—June-24,-——

1976, the Supreme Court held in National League of Cities vy
Usety, 426 %.S. 833 (1976), that the minimum wage and over-;
time compeng$ation provisions of the FLSA are not constitu- *
+ tionally applicable to the integral operations of the +
and their political subdivisions in areas of traditiorial
governmental functions. To the extent that this decision
may effect sheltered workshops operated by States and their
political subdivision, employees of such institutions are no
longer ‘subject, to the Act's minimum wage and overtime require-
ments. The Supreme Court'sdecision does not apply to the ~

. Act's equal pay ar child labor provisions. Nor does the

‘Supreme Court's decision apply to the Age Discrimination in
@fent Act (ADEA), which uses the enforcement provisions
+ of the Fair Labor Standards Act.

The law applies both to handicapped workers and staff .
members who directly or indirectly engage in activities s
covered by the law; it includes minimum wage, overtime,
equal pay and child labor standards. FLSA is the major law ,
regulating wage payments to handicapped persons in sheltered’ .
workshops.’ The authority to permit the payment of wages ~
below’the statutory minimum wage rate is provided in Section
13(a)(7). :

The Walsh-Healey Public Contracts Act (PCA) applies to ”
workers employed on Federal government «contracts in excess’
of $10,000 for the manufacture or futnishing of materials,
supplies, articles or-equipment. Under REA, the prevailing ‘

+ minimum wage is determined by thi cretary of Labor on an
industry basis. The authority tc rmit e@ payment of
wages below the stAtutory minimum rate’ is provided in
Section 6. -



Pa

’

’ The genéral group, the blind group, an€ the

.

7 in average per major source.

sidy income. = . . .

72. ‘Income by primary disdbility “group

There was wide variation between, workshops

classified by primary disability groups served” in major

sources and in total-operating income:

’

(a) Regular program workshops

Table 5 provides a comparison of average

income per regular Program workshop, and, income per client
served by major source. Thg blind group’ showed the highést
income per client from the work program and ‘subsidy; and
the. lowest fee income per client. The mental illness and
mentally retarded groups showed the lowest work program

income per client -- only 11 to. 14 percent gt that’ of the
: ’ ‘

blind group. . .

Although fee income edid not vary widely among.
groups, ‘subsidy income for general group programs was less
than one-half that’ of the mengally rétarded -group and less

than one-third of the blind group. .

alcoholic group were most dependent ,0n work p
but the ‘mentally retarded group was’ more ‘depe:

” ‘The tnerital illness gtoup. had.by far the lowest | .”°
rved with little difference

average iincomé per client’ se

rogram income
ndent on sub- °



_.(c) Training agd/or evaluation programs |
: 2 , ao

‘The financiai opeyation of the training and/or .
evaluation programs is distinctly @ifferent from regular |
program workshops or work activities centers in, that the
focus on services rather than production is much greater.
Work program igcome is ingidental to the operation, and oe
employment wages are subofdinate to training and evaluation
services. mo! a ‘ ~ o.oo

. _ Fees consistechtly averaged niger per client in
‘general group programs which represent€® more than half of

the clients served (Table.7). The mental illness group ‘had. .
the highest fee ahd subsidy income per client but .represented '.
only 8 percent of the clients served.. The mental illness
grqyp appeared to get its best +support in: training and/or «= ~
evaluation progtams; it ranked. lowest in average income per |

ot

‘¢lient’served for the other twa Proggams. . ty

+ Not ‘all of the training and/or evaluation programs
recawed fees: only 58 percent of the general group, two-
thifTMs of the mentally ‘retarded group, less than one<half ‘a.

of the blind group and 54 percent of‘the mental illness ,
group. Even fewer programs received Subsidy incomes: one~
third of the mental illness group and the blind group,
one-half of the mentally retarded group and four-fifths of
the generab group. The data did not show how many programs ~
received both types of support but it appears that some of
the blind and mental illness programs did not receive either .
type of operating income. . 5 -



‘ “yy ; a “ : ‘ » :
‘ , na oo
oy . . Table Il. , Average straight-tame shour}y earnings of clients ‘
. Loe by. major disability and type. of workshop fogram,
. - “. Mal \1973 _ fcontigged) ve
” * : ° '
- . et . -
= a -
4. * an > Gertificated’ - Noncertificated tr
> Major disability and >__ workshops: workshops ~*~ . 3
stype of program - - > Average, . Average
. ed Clients - hourly Clients hourly
< Number;Percent . earnings Number :Percent earnings
a ~ » ° . .
“Alcoholic ’ . : .
“ ? Regular program. * - ” . . . ‘ 1
: workshops 1,203 1.4 $1.39 ’ 310.5 $2.00
Work activities ~ a . 7 _ .
. centers . 0 * 119. els + -56 11 +2 -38 +
Training and/or : + <7 : .
evaluation programs” 199° 42 84 _ @&o9 +2 -68
* ~ ferebral paisy a . . 7 i. os
12 Regular program ‘ . . soot ,
workshops ‘¢ / 1,042. 1.3 1.10 37+ 6 . 4.15
_ « .Work activities oo ; . ’ aod ‘
centers 13491168 235 a ee 132
a Training and/or . oa : , Sad
evaluation programs - 364, 4 . 56. 15. 43 . 61
Orthopedic disabitities | a
Regular program . Z . .
woo. workshops @- |, ° 2,747 3.3 = 1.48 238 04.1 1.55 -'
. Work activities é soe _ " -
centers . 436 5 50 9m 1.6 58
training and/or : .
- evaluation programs 608 .7 .77 47. 8 . "90
2° 94 ae “ | _ 95
. wed - _ . a
wot i - , .
| : } 6 . ; .



, . . . “ | t .
4 x When the ‘pair “Labor Standards Act, | (tsa) was enacted .
-in October 1938, establishing minimum wage, overtime premium

pay ‘and child labor protection for millions of workers, a

_ partial exemption from the minimum wage was made for . .
. handicapped individuals who were not yeapable. of normal pro-
ductivity. The. statute did not sét amin imum (floor) rate

sheltered workshops, as such, ¥ were ‘not
law. ’

‘A temporary certificate of exemption for handicapped.
workers, employed in sheltered workshops was issued ‘in
November 1938 providing that handicapped workers must be
» “paid an amoynt in the same proportion of the “minimum wage————————
which the handicapped individual's earning capacity -bears
to the earning capacity. of a nonhandicapped worker. .In.
March 1939, an Advisory Committee on Sheltered Workshops,
composed of- representatives of workshops, workshop orgariza-
tions, labor and industry was established by the Administra-
tor of the Wage and Hour Division. The first regulations
governing. he employment of handicapped persons ip sheltered
workshops were issued ih February 1940.

SS

, The enactment of “the, Wagner-O'Day Act in “¥93q gave .
blind persons. priority in the sale of workshop products to. ot
.° | the Federal government. This move marked the beginning

4.

7 organization . to aid workshops for the blind.

of a significant growth of workshops for blind arid visually
shandicapped persons.

established as an allocating and technical assistance

The mid-forties saw the Vocational Rehabilitation Act
revised to permit services to mentally retarded persons by.

-State rehabilitation agencies but this move had little

impact on. workshop services. Another decade passed befote.

- the efforts of. parents of mentally fetarded persons inflien-

ced movement toward. serving mentally: retarded persons. .: In
the early.sixties’ the development of day care and activity |
programs for mentally retarded persons began witl¥ local
Associations for Retarded Citizens actually establiShing ‘
and operating such programs. Many of these activity centers
eventyally d ped into sheltered workshops over the next.
-several years. oy . an

L

National. Industries for the Blind was a



2 .

£ Amerfica were heavily involved in "other" (salvage and
reproce sing) Work. In blind group programs-operating as
regular program workshops, manufacturing income averaged
$434,006 per workshop and represented 82 percent of the work’
program income. "Other" work income averaged $207,000 per

workshop in general group workshops, accounting for nearly
three-fourths of their work program income.

Subcontract work was more important /for the mental
illness and mentally retarded group workshops but the average
; income per’ workshop was only a fraction of the average income
from’manufacturing and "other" work, fhe méntally- retarded
group workshops averaged $27,000 for contract-work, ‘this
accounted for nearly two-thirds of tHe ‘Ww program income; .
mental illness group workshops, averaged $34,000 for subcon-

tract work representing 82 percent of their work program
income. ot a :

Income from services rendered
all groups. °

. . .
s insignificant in

(b)* Work activities centers

‘ Nore than four-fifths of the work income was
produced by subcontract work and the /average per center

. ranged from $17,000 to $19,000, with/very little difference

amohg, primary disability groups. .

x

(c) Training and/or evalvation programs
Sybcontract work wag also the major source of
-work income for’ training and eva¥uation programs, represent-
ing three-fifths of -the total7 k income.. When primary
disability groups were’ comparedj there appeared to be some
correlation between the size of client attendance and the
average subcontract, itfeome per/ workshop -- the larger the..
greater. the percentage subcontract work represented of the
work program income. :

ale
—
2. Governient and nongovernment work -

~ The flow of Federal government. work into blind
workshops was stimulated by the Wagner-O'Day Act of 1938
which made special provigions for the purchase by the Federal
_ government of commoditi¢s produced by blind persons. The Act
was amended in 1971 to Anclude the purchase of services and
coverage of the Act waS extended to include the products of
other severely handicdpped persons in addition to blind -

persons. The impact /of the Wagner-Q'Day Act on work supply



oa

a “os ~ oY oo,

‘ : . ‘, roONe
LIST: OF TABLES *
. : a
. - , ‘ +) . .
> Table hole Page’ *
12, Average straight- time hourly earnings of :
clients in. certificated workshops by sex. and :
rade, by-type « of ‘workshop—program,-May 1973 ; -- 32.
, 13. Average ‘straight-time ‘hourly: earnings of * :
clients in certificated workshops by age \
type of ‘workshop Program, May 1973 --- 34 *
14.. Average straight- -time hourly earnings of .
. -clients in certificated regular program ‘. /
workshops by sex and type of: work, May 1973 -- 86 ;
come
15. Average straight ‘time hourly earnings of
> . clients in certificated work activities
. , centers by sex and type of works “May 1973 ---- ss;
16. Average straight- time - hourly “earnings of
clients in certificat training and/or
‘ evaluation programs(by sex and type of work,
. May 1973. ---qp---n nnn ne anne * 90 ‘
‘ _ v. Annual’ expenditures, for fringe benefit's for
_ sheltered workshop employees by type of’ = .
_cs / ‘TM. workshop program, NIYT2 qnnnnn nnn enna wann i: :
, @ . ce .
18. Distribution of .clients referred by Manpower Jo.
a Development and:Training Adffinistration °* .
1 Programs in 1972 by outcome and type of oo, fof,
. workshop program ------9----------------— aoMe- © 110+ ,
19.- Percent of certificated sheltered’ + wkkshop’

reporting, $ull-time “and part-time profes-;
.sional staff in specified occypations by
“ type of workshop program, 1973 ------->~--5-+~



Table 9.

Average straight-time hourly earnings of «clients .
by prifdry disability group served, May 1973

¢

-

: Primary Micabirity
-group and

type of program .

General workshop group .,

Regular program .workshops

Work tivities centers

* Training and/or evaluat ion
programs .

»

“Mentally refardea group
‘Regular program workshops
"Work activities centers
‘Training and/or evaluation.
_ Programs

Spiers
nters

Blind:-group - :
Regular. program
Work acgivities
aini
) programs, a

. al

Mental illness g&ou
Regular program workshops

«Work activities centers”
* Training and/or evaluation
* programs. 4

Alcoholic group: es
Regular program workshows

: Work: activitjes centers
Training anc
pregrams

tye

and/or evaluation .

ee

or evaluation |

client. earnings’ V

1 2 a . + ons:
- Certificated . certificated 1.
workshops workshops_  ;
. “ng? ve a -
- $1.28 . $1.40
40 45 .
= : a
66 805 y
7 :
° . oF
. 82 . . +56. _
35 223°
wt OF, .
mon ” . 51 —
1.69 + 1.65 ;
+54 4f2 '
, “70 5 6
1.06 so 79 |
: 245 _ 343
- 0 75 1-039 fa
‘ te ° : . -
’ ’ . . a
1.31 + ery
yo” 4

2Y
3/ No wages reported

source:

Appendix table 166...

L/' Regular program workshop rates include regular <elients
‘learners, and individual rate clients.
centér rates include program and special rate, clients,
Inforrftion deleted to protect confidentiality of. data
.for fewer than three establishments. -

Work activities



IV. THE DOL SHELTERED WORKSHOP STUDY

' . . ©

“4 ‘ . . “
t

AL Background . “ : ‘ _

‘

This study of, sheltered workshops and handicapped a
» persons’ served by them represents a comprehensive and a
systematic collection and arfalysis of data in response to - =
+ requests and interests of several groups. Standing : °
committees of both the U.S. Senate and the House of: Repre+ an
sentatives have requested information concerning the : | ve
. operations and policies of sheltered workshops in ordér‘to .
have a better basis for considering legislation affecting . -
workshops. The DOL’s Advisory Committee on Sheltered Work- -
-Shops requested data necessary for an evaluation of the * an
"work activities center" concept established by the 1966 ’
Amendments to ‘the FLSA. ¢ . a
In addition, the DOL'S &mployment and Training * ‘
Administration is interested in the feasibility of utilizing .
workshops as a resourse fot providing training and job
opportunities for hard-to-place, socially "disadvantaged"
honhandicapped individuals. se

The DOL is sponsible for issuing certificates ‘to
qualified sheltered workshops and; for monitoring the com-
pliance of such workshops with the requirements of Section.
14(c) of the FLSA and the regulationa thereunder. In :
addition it has been assigned responsibility for implemen-
tation of Section 503 of the Rehabilitation Act of 1973
(Public Law 93-112) regarding employment of handicapped
Persons. by Federal government contractors. Sheltered work-
shops are expected to play a significant role in developing
qualified handicapped persons for the Section 503 program.

B. Objectives of ‘the Study ° * a :

“This study. was developed as a multi-purpose’ operation .
intended to assibt the many interested organizations and
agencies in evaluating the existing programs and planning |

‘for the improvement of services to handicapped: persons in
the future ~ - .



table\168): _ . : Soy
‘ roy : Number + Percent Average" -
: : a af of total - str time
Type of clients — clients -clieftts nought earning - <
~~ oF ‘ woe
Regular program. ~ - _ - en ~ .
workshops ° vote .t re
regular clients 3 _ 24,597 27,7 * $1.38”
leatner clients 7 331; 0, 004 2.04,.7
individual rate , | . a
clients 5,677. 6.4 © t * 467
Work activities « = ~- ee . .
centers soe . , :
program clients: ~ _ 43,195 48.6 . 34
special ,rate - te, to oa
clients “ "  , 1,206 “1.4 . 7 1.29
Training and/or < ~ ry , — ot
"evaluation programs — 23,785 15.5 © : -63 ~
"ALL workshop clients TM 28, ;791 ° 100.0 . 7

on

By type of client. ‘and type of program average. “oy .
. straight-time hourly earnings ranged from 34 cents per hour
for work activities center program clients to $1.38 an hour

-for regular clients, in regular program workshops . (Appendix

At’ the time of the survey the “agplicable. minimum wage
rate under FLSA was $1.60 per hour bat the average hourly
earnings of all clients. in-workshopsTM($.71) was less thah
half of the Federal-minimum. The average for regular

clients amounted to 86 percent of the statitory minimum, * ~~

for work gptivities center program. clients - 21 percent, and
- for trainthg and/or evaluat on program clients 39 percent.

* About one- -figth of the Clients. in regular program

- workshops were paid less’ than the 50 percent floot through

individual rate certificates.’ Two-thirds of -the clients
were paid less than the statutory ininimum and one-third - ‘the |
minimum or -higher. ,_ : Vo

*In work activities cekters * tho-thirds of the: Sent *
were paid less’ than 25 percent of. the statutory’ rate gnd’:
only five percent were paid at least 50. persent, the ~

statutory minimum, .

‘ One-third of. ‘the cupenta in training and/or evaluation
programs was paid less than 25 percent of the FLSA Statutory

' vate, 75 percent received ae than ‘half of the mitimum rate

and five percent. averaged

e. statutory finimdm 1 rate and
tghetg . .

,

“a :



“ 7 ¢
Three~fonrths of the reguiar program workshops | . -
.*  , reported operating losses for the annual period for which-. . o
they prévided financial data, and an additional two percent ,
". reported having no gain or loss (Appendix tables 69-71). °°

. . '
About four-fifths of the work activities centers Ne

sustained operating losses, bit one-fifth had .more earned : .

income than operating ‘expenses, Lo an . rand

. One~fourth of the training and/om evaluation. programs * °° ‘
‘had more+income .than expenses and.one-third reperted that: ad
. Operating sxpehses matched earned operating income. , {
‘  *  Many workshops develop anhv&l operating budgets based .
on total’ operating income’, including-subsidy. In, such ~, -
-operatians subsidy is cdnsidéred support income rather thane oe
~y, dgficit’ financing, : , . an Ts

G. Capital *tnvestment in’ Piant and Equipment’ me,
- Phe purchase’ of, byildings and equipment was reported .
. separately ‘from operating.expénditures in’ recognition of the’
. , differences in. funding methods. Buildings and major equip~
‘ment represent a long-term-investment.to be prorated over :
. @ peried “of years. In a profit-making business the © _—
‘ ", , depreciation of plang. buildings andggajor, equipment is we .
*, shown’ as ‘an expensd. Md is inctuded -in the costs of Qpera-.-
tign, but nonprofit .carporations Aincluding workshops) _ . q
, frequently ignore depreciation of buildings.and equipment, . 7
. bécgauge they are not concerned’ with taxes on profits and ~ .° v4
_— because of their method of purchasing or acquiring bpildings :
and equipment. .  . ee “ eee
s oe Stet oo. ee. 4 .
. , federal: guante, Pprivdte donations, gifts and other: - . ke
,. ‘@* similar resources and me hods have been used td buy or. cpn-’ - y
- struct buildings and: purghase’ major equipment.-. However,’ the ~~ Do,
number -of: workshops acqyiring budtgings and equipment : 7
- through thése methods of capital, finding wds not -identified :
in“the survey. Also, .some works ps “Lease or rent build” -
. ings, but Mea ek not knowM.», af og : ‘

, 4

‘ Lo 1 re 2 a I . ON
1 °*Workshops partici) ating in’the survey-reported capital crt
investment in plant and equipment, totalling $3073662,506 of. . -
> which $240,136,265 was plant investment. and $67,526,241 was
“equipment “purchasés (Appendix, table 29) - » Se . mo
~- d s : , ce eee :
: sete : rr) : ae

a . eo wf



. wage set’in the certificate may ‘not be less :

= , than 50 percent of the applicable statutory ~ so

minimum: wage. The certificate may provide for °

one rate applicable to the’ entire shop or See

f + different minimums for different departments,

It may also provide a learning “rate, a mini-
. mum wage lover than the apr3icable' department _
* or workshop rate but not less than 50 percent ~

of the applicable FLSA minimum wage. The . . 4
certificate rate applies to all covered

workers in the program other than those ”

. qualifying for a learner" or individual minimum _
rate. ‘ . a

Evi are

issued for covered clients in programs which

meet gpiteria in ‘section 525.7(b) of the

reg tions. “The regulations do not requare ”
—>---_-_that—a—minimum_wage_be- set-in -
’ for clients in evaluation or training. programs 7

* but if evaluees or trainees are to be. paid

less than 50 percent of the “applicable minimum .

. wage, the program must receive prior author- .
ization (or'certification) by the: State voca-
-tional rehabilitation agency stipulating that .
the program(s) mieets the standards of that : >
agency or ‘substantially equivalent standards. ‘

2. Evaluation certificates are issyed on a group

basis for clients in those programs which'use ~~ 1,
actual work to determine a client'sypotential. : .

*. Evaluation programs are limited generally to
six..months but the périod may be extended if ~
_ Properly justified,

3.0 ’ pyainin certificates aré issued om a group
basis for clients in those programs using
work for training a client in' a’ specific

. & skill or for work adjustment/general work

‘ training to develop acceptable patterns of

_ behavior in work situation. Training programs
are limited generally to twelve months but
longer periods may be authorized With proper

justification. , + a

10
rey
’



eo

. The growth in the-number of clients served in the .
certificated workshop programs in the 1968-73 and the 1968-
76 periods was also concentrated in work activities centers
-and it was greater than the growth of the other two programs
combined. The number df.clients tripled in the fivesyear

. period between the two
in, the three-year period.
the eight-year period 196

\ workshop client g

studieg and has more, than doubled

following the 1973 d®udy.

8-76 seventy percent of total

rowth,was in work aativities centers:
: ..

Over -

“

. 5 Tow Growth . Growth
‘ Type of Number 1968-73 -. Number 1968-76
' workshop March June Num-. Per- June Num- Per-
\_program 1968-* 1373 ber cent 1976 ber cent
Regular ‘ ma _
program . . . . .
worksHops 17,428 29,758 12,330 . 71 33,837 16,409 94
Work activ- . od ——
-- ‘ities cen- : : 2
ters. 14,125 42,403 » 28,278 200 _ 88,735. 74,610 528
Training a
* and/or . Rook .
evaluation 7 “
+ programs 7,9 15,187 1,218 90 22,88 14,899 187
Total ~ > ' - .
. clients 39,524 87,348 47,824 121 "145,442 105,918 268
Sourcé: U/S.' Department of Labor, Division.-of Wage Hour

o. Statistics.

of

Y- ”
. .- ;
,
+ ° ‘
7
aan
ne 35
. 43
e- ; . --
. Loe . a
, . -



Share, from private sources, and other grggHs depending on
- Pi
eA

.

The quest ionnaire- did not distinquish bétween the State
rehabilitation’agency and other public rehabilitation
agencies.in reporting the fee income, but reports from

other Federal-and State agencies suggest that-a large . “

portion of the’ fdes*may. have come from Stat¢ rehabilitation
. ‘agencies, especially in the regular: program workshops and
“.training and/or evaluation programs. Ow

A Secondary source ‘of fee payment, began emérging in
the early part of the seventies as the purchase of care,
provisions of the Social Security program were opened -up”

.for mentally retarded persons and other ‘sevéfely , handicapped
persons. Extended services were purchased from sheltered *
workshops, especially those operating as work activities
_ centers, _ -

.

Public, rehabflltation agencies provided 83 percent of °
* ‘the fee income for regular program workshops and 90 peroent -
for training and/or evaluation programs. ‘Two-thirds of .
‘work activities center fee income was derived from ‘thig ue
source. . vos -
2 : .
D.. ' Subsidy Income . . : a

« Three-fourths of the, workshops* reported subsidy income,

in a pattern similar to fee income. : an

s Séventy percent of thé subsidy in regular program
workshops, two-thirds in’ work activities centers and more
that three-fourths of subsidy in training ‘and/or evaluation

" programs was derived from public’sources. The average _
annual-subsidy in regular program workshops ranged from
$36,000 for the mental illness group workshops to $147,000 .
for blind group workshops. The amount of’ the’ subsidy seemed
.to have a degree of correlation with: the lével of work pro-,
gram income. For example, the blind group had the highest

-' volume of work program income and -the highest average sub-“
sidy; the mental illness and ménta retardation workshops
had the lowest work program income and the lowest subsidy
(Appendix tables 43-49). "ele . : : -

. »
The pattern of subsidy in work activities centers :

varied moye with the blind group ‘cénters securing the larger

ublic- sources for the major share of subsidy.

” The mental illness group training and/or evaluation -

* | programs’ repggted average subsidy per program of $179,000
of which 93 ‘percent came from public sources, but only one-
‘third of the programs ‘reported subsidy income.- Public

en ae ;



Tis PREVIOUS, STUDIES

. a final report was-

- workshop clients. . “4

. ‘In response to @ directive in Section 605 of the 1966
|... ", Amendments,t® the FLSA, (Public Law 89*601) a two-phase

, Study ‘pertaining to-wage payments to handicapped ,lient/
employeés ‘in sheltered workshops was initiated in 1967 by

~_ the DOL's Wage*and Hour Division. The first phase of that
“study was ‘reported to Zhe Congress in September 1967 and.

aff ttea in 1969. Wage and employment;
. data presehted in thidse eports(were obtained’ from shel=

~ tered workshops holdingycervificates that authorized them." .

__.. , to employ -handicapped . rkers at special minimum wage rates.

o , : .
_. The feasibility of raising existing wage standards in
“workshops was considered by‘the studies and it was concluded
. that "even for most regular workshop clients the, achievement
of a statutory minimum wage does ‘not seem realistic without
some assistance". The reports also noted, howeyer, that
thefe was a clearly demonstrated need for more vigorous, .
administration of the Federal wage program for sheltered

. The September. 1967 rep&t presented wage and employment -
data for two periods, one before and one after, February 1,
af 1967, the -effective date .of .the 1966 amendments to’FLSA.
The 1969 report also provided tabulations of wage and
ve employment data for two periods, October 1967 and March 1968.
* The 1969 study compared wages paid in the two periods.by
matched workshops and clients in order to measure the impact
of the second minimum wage leyel established by the 1966
, ’ Amendments on client*‘earnings in sheltered workshops.

1”



.Tablé 15. > Average straighttime’ f hourly earnings of “Mlients ‘in’
* Gertificm@med work. activities centers by: “sex and

* type of° work ," May 1973 - vo °

ay ee : Male 13. Female
- “ . - 3 Number:Average+: Number :Average.
. Tye of work : . of > hourly of : hourly
: ._:clients:earnings:clients:earnings
oe “en clients : 22,839, $ .37 19,089 ¢ .37
+, * Subcontract” Work . ——
_ Simple benchwor! 2
Mailing services *
. Salvage . .
Repair °
~~ Sewing : 7
. Printing , ,
: Soldering 2
_.. ... Machine -operations _
> * Other

’ hoa

* salvage’ ‘and rénovation work oh ..
. Drivers “+ 6 1.15 yes ‘3

Drivers! helpérs, dgck workers’ . '108 50 50, - )

z © Sorting : 193 28 184 3
Baling . ' ? 2905 4390, 16... .33
Cleaning,, laundering, Bressing, 17 37 55 +32
‘Sewing, Pp: prising : : 200 6 428 +730 -30
Furniture repair, refinishing 281 +32 ‘og ° 27
Other, repair, vefinishing © - 32 m4 tog _ 10° 17
Other’ a 207 an “9g “120 °  .28

a0 . ‘ ie ,
Manufacture”of new goods ao % —_ .
Mops,. drdoms, brushes a. 38  } .27, * 16 “19
~ Machine sewn items’. : 22 , 638 BO 244
Mattresses, bedsprings . mo. 2 “228 | 80 “.24
-Other machine production » * 316 +440 AT +32
Handicyaft items: . "+ 887 29 . 968 2290
Others 2 : . 381 +37) .* 231 2. «36
. ke. . : a Loot aad .

Miscellaneous opcupations St . ‘ los ry ~
*- @lerical , 37° 754 ees -60
Janitorial, “maintenance | 586 +46 (174- . 42
Food service, | So 87 344 280° +39
Sales. eT 6 Baw  - 98 40
Forestyy, nursery,, farming \ 134 42, ' 38 | .40
(gother. ’ . _ " 273 237, - 208 +40
Source: appendix tables 179-185. aan

ves 108°



TM VI. FINANCIAL OPERATIONS - OF WORKSHOPS

I, “it .
The primary objective Of the. workshop- is to provide - 7
. rehabilitation services including employment to handicapped ,
persons, and the financial operation has a major impact on .
__the effectiveness of the workshop in meeting its primary ,
“objective.

The workshop survey.collected data which permit an
analysis of the:financial operation. The data show that two _Js
types of funding exist in a majority of workshop operations:
"Capital funding" which pertains to income and expenditures
for buildings and major equipment, and “operating funding”
which pertains to income and expenditures related to the -
operation of the workshop organization. ~

° .

This section will review and analyze financial data: by
source and type, as reported by the workshops for calendar
or fiscal year 1972 or 1973. Informal comments from shel-
tered workshop directors and Advistry Committee members
suggest that these’ data may represent a more reliaffle
profile of the current workshop operation than similar
‘data for calendar/fiscal year 1974 or “1975 because the
impact of the economic recession (during 1974 and 1975),
caused wide fluctuations in workshop operations, especially
in the work program.

Any interprétation of financial data should take intéd
consideration the time differences and changes in the
economy \and -the Federal funding program which may have, | -.
occurred\in the intervening period. .

+ "A. Operating _ Income |

~
Warkshop o operating income derives from three major
source categories: . . .

> Income from work _progran - receipts ‘for the
production of goods and services by employees.’ >.

Income from evaluation and training .fees -

receipts for rehabilitation services Provided

to handicapped clients. .

. we oT Subsidy income + gifts, grants, ‘nembership » dues,

. endowments and allocations by community funding g.

. agencies to assist in underwriting an operating

deficit ihcurred by the. workshop, or to support a)
if Special operations within the workshop.

7 51S _



6. Hourly eaxnings by client age

a . :
_ Yn certificated regular program workshops client

earnings increased progressively with age beginning at age
16 at $1.00 per hour to $1.41 in.the 55 to 64 age range, and
declined slightly after age 64 (Table 13). In ‘work activ—
‘ities centers older workers also earned slightly more than. _
younger ones. The training and/or @aluation’ programs ;
showed no significant relationship Between -houylysearnings

ond age. oO . On a

Clients in work activities centers and training and/or -
©" evaluation programs tended-to be younger than the regular
program workshop clients.. Fewer than one-fourth of the
regular program workshop clients were less than 25 years .
old, whereas about half of the clients in the other two .

programs were under 25. . 4
‘ ; a’
‘ .# : : : ’ .
oN: 5
., . -
‘ 7 .
. . . . 7
. . . . 7 .
. \ . . 7 -
: . a
\
. « - " ’ .
~ oy i. ‘
.
. , - 4
, nO ’ t .
: : - 83 . .
a5
&- : .
- - in . -
ed ’ . we . ° “ ;
gf 2 . : f



¢ a > “oe . \
os - _ _ :
The’ typical work activities center paid out two dollars
‘in .wages to adminisPrative and professional staff for each
‘dollar paid in wages toa handicapped client; whereas the

‘regular program workshop paid only 66 cents in profeéfsional. ° :

and ddinigistrative salary .foy each client wage ddllar. -

Ir wages And salaries expenditures by primary’ disability
' group ‘workshops, the mental illness group spent $3.59 for
professional aid administrative staff for each,dollar-of
client wages and the mentally. retarded group paid out $3.22..
The blind group pazd lowest average professional salaries --
less than half«the professional salarigs in generalyand
mental‘ iliness group workshops, and salaries of administra- |
tive and professional staff represented only two-thirds —
the amount of wages to handicapped clients¢-. th ‘

Fl ‘Net Operating Gain or Loss oe

uo aon

76. percent of the workshop establishménts pdrticipating in-
tke Survey were privately operated nonprofit corporatisns,
The.nonprofit.status pertains to use and distribution df .
operating surplus or margin and *does‘not..prohibit-a workshop
from having an operating gain-in which operatingsincome is. .

- greater thangoperating expense, -‘Opefating funds may be, .° . -

accumiilate a carried forward to another operating, year.

or they may be invested in special programs; or‘in improwe-
ment or: expansion Qf facilities ,#equipment, staff and.
program. . . : ' :
e.

> . + a
om . ” « ot

: “Opegating losses sustained by a workshop thay gause a
reduction in operation if’ thé workshop is unable. to recovér
thé losses from reserve funds or a subsidy ‘intrease.’ The
subsidy, funding,of some workshops is provided on a deficit -
financing basis. in which the amount of subsidy is determinéd’

_ by the amount of operating loss. In that typé of @peration
.@ workshop experiencing an operating gain would have the °

* amqunt of. operating subsidy adjusted in the ‘£ollowing.
‘operating (fiscal) period. ° oO

_¢ For purposes of ‘this study, earned operatiag “income
_ineludéd’ income from the work program and the. rehabil

. itation/professional services ‘program (evaluation and train-
ing fees), The operating gain or loss, was fletermined by

dedugging operating expenditures from earned operating 7 ‘

“‘income.g’.., -

: hus oo , sy ton ; m
. . a . . ‘ ar 7.
tet . oy
~ yr : a =
7 ~~ . if = {
. 60. noe
wots : ry id
. . ’ ,*

Workshops generally operate as nonprofit corporations -- * ¥

b



°

——

2

~,

‘

fe
'
, .

Averdge straight-time hourly earnings of clierits in

by agé, by “re of jWorkshop Program, May 1973
. | (oo .
\

certifikgted: workshops an

oN

ne ie

4 : :
: Regular program 3 -Work: activities Trainjng and/or,
. 3s workshops : ‘centers: -. evlauation programs |
Age, range lumber tiAverage :Number :Percent :Ayerage
of - + hourl 3

? vost
z

yi:

of

of

: hourly :

of

at ‘Of :Percent :Average |
: 0 :

: hourly
seaxrnings

: iclients:. tot.

zearnings:clients: total zearnings:c
T :

lients: total

=

Under 16 years 561 12 a $1.18. 1,161 3 $- .36 256 2 $ .57
" 16-17 years, 378 1 fe! «1,00 2,042 5 "136 1,452 1l -60
18-19 years 973.4 1.00 3,815 ~ 9 +. 235 2,071 16 58 :
4 20-24 years 4,652 17 4 1.08 12,012 29, 35 3,261 25 59. 0
. 25-34 years 6 1267 22 ‘© 1.19 11,898 . 28 137 2,591 “20 63 |
35~39 years 2,110 + 7 4.1.31 2,633 6 -39 739 6" ~70 u
40-44 years 2,209 "8 11.33 2,162 5 39 699 5 +69 ~ :
~ 45-54 _years - 4,927 17 1.37- 3,221 8 241 1,137 - 9° “69 -.. '
55-64 years .4,113 15 1.41 © > 1,789 4 41 508 ‘4 +75 5
+ 65 years and ., % 3 . . . ~ . ’
over 2,0 7 1.31) -1,195 3 . -42 99 1 -69
All clients 28,286 00 1.25 41,928 1060 +37 12,804 00 63
. { ; i oT
. & . Jo t
Source: Appendix table 163. U . r
4 a,
7 ‘. - .
, “ 7 .
104 mo



‘

Table 19. Percent of certificated “sheltered week®hops reporting full-
time and part-time professional staff in specified occupations
by type of workshop program,1973

_ ‘ me

Percent of workshops

*

a : Regular , Work : Wfraining and/or
‘: program activities 3 evaluation
Staff personnel . 3___ workshops “center 2 programs
:Full Part Fall Part :* Full Part
ztime time _ time " time =: time time
7 — 7
Psychologist, psychiatrist 13.4 58.9 15.4 71.5 15.8 70.0 ‘
Doctor . 3.8 44.0 5.9 40.6 4.8 46.300.
Nurse , . 14.9 34.1° 17.3 43.6 19.2 36.0
Speech ‘patholo#Mst/audiologist 5.7 22.1 9.2 41.9 8.2 29.2.
- Physical therapist . 5.1 13.2 5.9 22.1 6.9 16.4
w- Occupational therapist 9.2. (14.9 10.4 22.0 | 9.1 16.4
Teacher, trainer, instructor 46.0 55.0 60.4 - 66.3 °°*-50.5, 63.7 |
Remedial education specialist 9.2 25.5 10.9 * 26.1 14.2 32.5 Jf
* Social worker 29.9 54.8 34.9 65.9 “32.0 58.2 |
s: Vocational counselor 53.7. 70.2 52.9, 58.5° ~- 63.6 | 81.1 :
Evaluator ° 59.0 65.4 4g .6 51.4 73.4 79.1 y
Placement specialist 34.9 56.0 24.6 © 41.8 44.4 68.0 ot
Contract procurement . : a Se
. Spegialist 39.6 54.5 33.7 51.8 45385 64.0 wood
Sale nager oan . 30.0 33.4 9.7° 13.3 28.6 32.2 ‘
Industrial engineer’. ss 16.6 10.1 - 4.3" 11.4 10.3 19.2 i
Cost accountant/comptroller - 38.6 55.7 18.3 39.6 39.3 57.4
Other yk 14,6 15.1 10.3 13.4 14.4 16.6

Source: ' Appendix table 82:



=

A
al . . - . °
placed, in the more appropriate regular’ program workshop.
The work activities center was intended to serve the. severe-
. ‘ly handicapped, “inconsequential” producer, whereas the
regular program workshop was_intended for the "better"
producer. whose productivity wi ‘wat more than 50 percent of the - .
average nonhandicapped worker.
’ ‘ _

. The two groups of workshops commented on the earnings
and productivity tests for work activities centers. Of. the
workshops operating dual programs (regular program workshop
and work activities center) 56 percent .agreed with the
productivity test as a qualification for a work activity y
center but 66 percent of the respondents felt the produc-
tivity test was too low while only 16 percent indicated the
test was too high. Of the facilities operating a work
activities center. only, ‘55 percent endorsed the productivity
test and the samt percentage felt.the productivity test was
too low whereas 18 percent suggested that the test was too
high (Appendix table 141).

Forty-seven percent of the workshops operating dual
programs agreed with the earnings test usuage but 74 percent
indicated that the test was too lowswhile only eight percent
felt that the test was too high. In single program work
dctivities centers ‘53 percent agreed with the earnings test” -
concept but 62 ‘percent held-the opinion that the earnings

_ test was too low; 12 percent said ‘the test was too high
‘(Appendix table 142). .

S

These responses regarding earnings and productivify
eritéria suggest a need for re-evaluation of the levels
established by the FLSA regulations. This is further’ rein-
forced by data on wage- -earnings of work ‘activities center
clients presented in Chapter VII which’ shows that client
earnings do not increase significantly as the elfent stays’
longer in the work activities center. A fongitudinal study -
of client earnings would prowigé additional information .
upon which to evaluate the impact Of the productivity and.‘
earnings ceilings. ‘ .
d . : ~~ .



. Table # Numerical and percent

2
distribution of sheltered
by certification status and organization, Uni

ted States, 1973

Type of workshop program

Certiticated
‘ksho)

and clients by type of workshop program,

‘ :

_ AML regular

programs

Regular
activities

Regular program and:
and/or evaliiation progr
Work activities center and train-
ing and/or evaluation
“Regula program workshop,
nN activities center, and train-
ir=9 ing and/or evalustion Droggens

center,

haber of cltents, total 27

. ar jram works!

AN wort-activtties cengens

. AIL training and/or evaluation
brograms.

raining

ers.

..

Total workshop establishments 1/
Regular program workshop only
Work activities center only
Training and/or evaluation pro-

grams only

Program workshop and work

, ‘ Regular program workshop only ‘
Work activities center only
Training end/or evaluation pro-

sorkshop and work
workshop and tre{n-

, |__ An and/or evaluation programs
la Work activities center and train-

Total rhmber of workshop progr:
om workshops
All work activities centers
+ AIL training and/or evaluation

ng ‘and/or evaluation programs
Reqular program workshop, work

activities center, and train-
ing and/or evaluation programs

98,076
36,978
46,273

* 14,828

an
2,901
7,810
uy,
“3,580

+ 16,493

“45 2
17823 100
284 v
7m 46
“9 3
123 8
197 7)
M+ 8
183 uN
91,194 100
4,181 37
Bus 8
13,568 15
* 12,262 13
31,975 35
1,797 2
7,688 8
Wee
3450 4
16,493 #1,

12

7 a. ase a 80
163 100 1,365" Wo ay
55 3 267 20 72
68 Me 559 ml 250
Fc " a 3° 35
3 2 wot 8 m9
6 4 3° 13 20
3 2 39 Bo
ro?
- - 168 7] 15
Clients yo :
6,882 ioo 78,089: to’ 19,987"
20797 ry 32,534 @ ae
2 - 4) 33,110 2 13,163
1,257 18 12,445 1 2,380 -
“2,512 ¥ N07 "45 2,967
2y57 + 4973 29 11,759
1,108 16 1,420 2 nest
Wee rr ce a i)
257 ‘4 16,883 2 1,093
130° Q- | 2,879 v4 701
- - 15741 > om 662

*

.& (36 _

¥ Undup {cated count. . .
~ Average daily client attendance.

Source: Appendix tables 1-6.

‘



”

. ai
E.. Very few workshops were servi

ut one-half the workshops répgrted unused

capacity; with adeqhate/staff and work supply °
nearly one-third more clients than the 267,920
“served during the reporting year could have

.’ been served. oe te .

‘ t . . 7
Most o£ the workshops provided some degree of

‘training, educational, and/or therapeutic
service to their'clients but annual expendi- J... -
ture reports reflected a relatively small . a .
amount f8r professional and technital staff -
“salaries.* This suggested a high proportion
.of part-time or combined role staff positions; ‘-
- it also indicated that professional. services :

-.in the average workshop may have been very i. /
limited. . ; . .

Correlation between types of staffing and .
‘client success could not be established’ without

- .. fyrther.research; however, workshops which were”

larger in client sizé thangthe-average paid -«
bétter wages, had a biggeRorofesdional Btaff,. -
“and showed a higher competitive job pladement cr.
ratio.-"Training fees and subsidy income also.
.positively influenced staffing and seyvices.
. 7 _. » . . ’ wpe
Training programs were generally rest&icted ‘

».to low-skill jobs concentrated in servicg ;
occupations. fof \. Te

clients referred
by Federal manpower programs. Most of such :
clients were served in regular program workshops,
Bhe rate of successful completion of training an)
and ‘competitive ‘job placement for clients
referréd by Manpower Development! and Training

Programs was higher than for Yion~Federal pro- .-
Sram clients. < : ros : . go .
The capacity -of regul4r program workshops and- .

‘training and/pr evaluation Programs to train, '
and serve disadvantaged, nonhandicapped per-. .

sons ‘could not be determined for the general e ay
workshop group but informal reports suggest .

that a nutber of wotkshops may be serving that

population to a limited degree at the present . of
time. Because of thé nonproduction orientation .

- _g~o



” {oe

‘Table 4. anfual operating “income of sheltered workshops

a by major source, 1972 .
j / .
_ ‘Amount’ - » Average income
v -. ’ {in thousands): Percent . (in thousands) —

All workgops/al programs ~ -,

_ Income from work program ~ $232,101 59 $131 7
' Income from training and . oA . .
evaiuation fees a 72,411 19 64
Subsidy income . . 86,269 ~ 22° . 67
Total operating income 390,781 10 219
_ Regular program workshops , an °
“Income from-work program . _192,489° 73 ote 232
Income fom. training and
| evaluation fees - 28,290 - 11 567
*Subsidy income oe 41,182 - 16 66 ~
“Total operating income "261,961 . ., 100. _. 308
Work activities centers ' Se - “
Income from work program 26,466 | 32. 23° ,
Inco. from training and . . . .
. ev tion fees 22,754 27 ry 40.
Sab: income '- 33,799 41 44
# ‘Total operating income 83,019 100, 72
, Training and/or evaluation ve >
* programs ., -_ . .
‘ + Income from work program 13,147 29 40
Income from training and : Joy a’? .
. evaluation fees + 21,3677" 47 71
. Subsidy income 11,289; 24 . 48 ~
Total operating intgme ~~ 45,803 Too 90°
All_ operating ingome ° Cfo .
Regular program workshops 261,960." ~ 67 308 “y
Work activities centers ,83,018 . a. 5,672
Training and evaluation : so
. programs . * 45,803 “12. 90.
Total - all operating 390,781 - I00 - “219 .
income. os - : L
Source: “Append tapes 45-49. sa . wo. a
: ’ —~ . . . - oo
[oo rs
- e yy, wee Se,
1 ~ 440 =. Bs ‘ .
\ ~ / 53. a,
x 2 . - . . .
- . , x —
. ° oe vo ne a
= * ° i ee



ae

B. “The separation of work.activifies center clients

7 productivity ceilings were too low. Earnings

Mentatly’ handicapped persons, miarfy of whom
‘came to the workshop from public institutions, ‘'

- constituted the bulk of the work activities . r
center population and the largest disability .
group vin, ‘the, other .two programs. mot .

The average hourly- wage in a -vierk activities .
center (37 cents) was only. 23 Percent of the Oo “ty
FLSA statutory minimum rate. ($1.60 . the

time of the stu§y) and .93. percent, ofTMthese + _
‘clients earned less ithan half of the statu- ~~ om
tory minimum. Clients in the “regular program

workshops earned an average of $1.25 per hour,

78 percent of the FLSA rate; 18 percen earned .
less than haif of the statutory minigum es

, inconsequential producers) .from regular pro- .
“gram workshop clients (better producerg) as, et
provided under the 66 Amendments to the Fair .
Labo? Standards Act an not produce significant on
changes in services, productivity or programs 7
rovided. his opinion wasy expressed by mpst-

of thi workshops Operating dual programs (regu-

‘lar program workshops and work activittes so -
centers)-:or single program work activities a
centers. ¢ s NOG fa 2

. Bhe client earnings and productivity critaria
contained in regulations per aining,to quaLi- ©
facations fot work activities centers seemed.
to serve as ‘assurance that the ggogram ‘would
be limited to the inconséquential producers
but more than half of the workshops "commenting «
on the criteria felt that the earnings and

of work activities center clients did not in- -
crease significantly as they stayed longer in

the centers whereas wages for regular program

. workshop clients. increased as their yéars of

Gt i Ce While this finding was “
viéwed as a po: le in@icator of: the impatt °
of the ceilings, it was also a ‘reflection of

the low productivity of clients entering work |
_ activities centers. : ~_— ‘
: *
oo:
s “e . i . ;
: - 4), Oe - r.



«Table. 3, pro ides ‘a summary of data presented in:
Appendix tables %1-23.° The annual number of clients served
’ ‘in ail programs was 2.7 wager the average: number served

daily, The, highest rate turnover was in training and/ér

vevaluation programs (4.3) in which clients are provided |
- services and moved out ‘to other programs and/or employment.

The lowest turnover was in work activities denters in which

clients are considered to be incomsequential producers and
‘dan need of extended services. .

Workshops were substantially underutilized. Nearly
half of the workshops’, reported additional unused capacity.
She estimates indicate a capacity to serve almost twice the
number of ¢lients actually served during’ the year. if
adequate staff and work were available. ~.



a ‘

The extremely low percentage of workshops having
industrial engineers réflects, to some extent,’ the lack of -
technical expertise in the work programs which probably was

: a factor in the problem of procuring work for the workshop. .

Relating the expenditures for professional staff. to the --
reported numbers: of staff'personnel discloses what appears
to be an inconsistency. The annual professional staff
expenditures appear to reflect a much lower professional
staff than is indicated inthe compilation of* specified
personnel. The explanation. for such a-sjtuation might be .
t Some professional staff services are provided gratis
by other agencies or through special grants, and the
expenditures are.not reflected in the financial reports of.
’ ‘the workshops. . . : , on

> > - os, 118 : . . SL



‘
‘The Service Contract Act in general applies td Federal
sgoverhment service contracts regardless of the amount ‘of .
the contract. The law applies to all employees (other than
Persons employed in-a bona fide executive, administrative,
» . OY professional capacity) engaged: in working on, or. in con-
7 nection with the contract, either in performing services
called for or in performing other necessary duties. The
FLSA minimum rate applies to.contracts of $2,500 or less,
and the Secretary of Labor is ‘required té make a determina-
tion of prevailing wages as well as fringe benefit require-
ments when 5 or more employees are involved for contracts
in excess of $2,500. The minimum rated to be paid are those

& occupational glassifications of em ‘loyees, or.in the case of
* employe the case of succésso: contracts, the rates —
Or @ predecessor contractor's collective .
bargaining agreement, if any. The authority to permit the
Payment of wagés below the statutory minimum rate in

. determined té' be prevailing rates. in the locality for specific

Section 4(b). _ *

» At the time of the survey (1973) .a relatively small
number of worksHops (111) were pave lve in federal govern-
ment contracts but this number has in ased- significantly
Since the survey, primarly due to the expansion of the
Wagner-0'Day art program for ‘workshops.

Workshop employment, is also affectéd, by other Federal
laws, including the Occupational Safety and Health Act (OSHA)
~in regard to the safety and health of workergs the Civil
Rights Act in yegard to non-discrimination in elfffloyment

on account of race, color, religién, sex or national origin;
and the Age Discrimination in Employment Act (ADEA).

.

[a Certificatidy of Workshops and Workers

oy a
, Section 14 (c) of the FLSA provides for the “authorization
by certificate of ‘subminimum wages for persons -whose earning
or productive capacity is impaired by age or physical or -
frental disability. or injury in order to prevent curtailment
of opportunities for employment. Regulations, ‘29 CFR Part
525, issued pursuant to section 14 (c) (Federal Register

tions 50 CFR Part 50-201.1102 and 29 CFR 4.6 (A) ¢ .
‘respectively, provide for the issuance of five types of :

certificates for handicapped workers employed in sheltered. .
x workshops, inéluding work activities centers: . .

‘ -‘l., Regular Program certificates are issued on a, -
group basis and may apply to an-entire shop
’ or to' individual departments. The minimum

.

- 7 . . . 1793 ., 7

May 19, 1974), and made applicable to PCA and sayy Regula-_ ’



. * ,

The first; real stimulus for the shelte-ed workshop’ -
movement came in 1954 through amendments to the Vocational

+ .Rehabilitation Act which ‘provided expanded funding for State
rehabilitation programs and’made Federal grants available

to private organizations (including workshops) for -innova- .
tive projects and research and demonstration projects. .

\b These two changes permitted payment’s of fees to ‘workshops

a

for the provision of evaluation and training services to

handicapped clients and made funds available-to develop new -

techniques .of serving handicapped persons. _In 1955 the .
rf’ .  ' Department of Labor issued certificates to a total of 262 °

. . workshops ‘that ,employed 15,237 tlients.. en >

[+ —s— Tn 1963 another Growth program was stimulated By the
,enactment of the Mental Retardation Facilities and Community’
Mental Health Genters Construction Act. This Act provided for
Federal agsistance ‘in establishing sheltered workshops for ~
|. +~=Omentally retarded persons thrBugh grants for new construc-
tion and expansion of existing buildings, for employing /
. ‘Staff, and purchasing equipment. This new program was
_'s . largely due to the combined efforts of parents of mentally -
' Yetarded persons and professional organizations concerned
with méntal health. and mental retardation. ~

‘The 1965 ‘Amendments to the Vocational Rehabititagion . q
Act authorized a.comprehensive program of Federal findncial.

++ assistance for rehabilitation facilities, including sheltered '
workshops; .it established a technicdl assistance program °
designed to improve workshops; and it mandated statewide .

. @ Planning of ‘sheltered workshops ‘other rehabilitation ia
+, , ‘facilities*by the State rehabilitation agencies. ‘The new ‘
. +. Amendments to, the Act also increased Federal funding of
. * $tate programs, including case servic® funds for purchase Lot

. of rehabilitation services’ from sheltered workshops. Thus, . .
the Amendments ‘inityated, what was to become a decade of
unprecedented impydvenent and growth in sheltered workshops.

: . . ‘

~ °°." The program of growth and ¢xpansion was coardinated by °
anew group of rehabilitation technicians, referred to as
. , “rehabilitation facilities specialists", -charged by the
%° 6. revised Rehabilitation Act ~with the responsibility for
. carrying out an orGerly progtam of ‘expansion: and improvement.
of sheltered: workshops and other rehabilitation facilities,
eer -\ major improvement in workshops’ was the hiring of progfs- .
| sional staff’to provide refiabilitation services. design to
* evaluate cients and prepare them for gajnful ‘employment in .
. .' >the companity.- The ‘emphasis in shelter workshop. programs :
an shifted from long-term employment to transitional services
: arid placement of clients in empléyment if the. community.

*

¢



- My‘ report on the second part of the, study of sheltered
_ workshops. .

STAYEMENT OF THE SECRETARY OF LABOR ‘fo THE CONGRESS

.

The physicafly and mentally handicapped ‘population of our
nation represents. a disadvantaged, minority group which
traditionally has been dependent on public assistance for .

‘ survival .and- support. In recent years however, the courts ~
~ Jhave affirmed the rights of the handicapped to education,

treatment and other sérvices. agcemgance of this prin-
ciple by society is responsible for 4 otieeable‘ progress .

toward making handicapped individuals full-ftedged, inde-.'

pendent Members of their community. . “
~ . 4
A_national deinstitutionalization movement under: which!
hundreds of thousands of mentally disabled patients of
public institutions are, being returned to-live in their
conimunity isa partial result of, the new concern for -
handicapped persons. These activities have resulted in
expanded demands for communitty services. for the mentally*
disabled population. Our study shows a substantial growth
in mentally handicapped persons served in sheltered work- .
shops and this @mcrease is expected to ‘cont#nue as the -~
program reaches more of the sevesely disabled patients.

Sections 503 and 504 of the Rehabilitation Act of 1993
represent landmark legislation designed to assure equal’
opportunity to the handicapped. in the area of employment
and servicés. The implementation of this legislation is
expected to provide new job opportunities for trained and
qualified handicapped persons in the competitive l&bor

market. ‘

al ‘ .
qhis report represents the first part of a compehansive
study of the role of sheltered workshops in providing
training and employment for severely handicapped ‘persons
who cannot readily be absorbed in the competitive labor
market The ‘second part of the study, which is to'be
‘completed in the near future; pertains directly to the

“handicapped persons served in the workshops in terms of ,

their needs, characteristics, and sources of support, as
well as their attitudés toward the benefits provided by -
the workshops. A series of recommendations pertaining to
legislative initiatives and othar action will accompany ‘



D. Training of Clients Referred by Federal Manpower

Programs* oe

Sheltered workshops had a very , limited involvement in’
: ,Fedefal manpower programs such as*Work Incentive Programs
. " (WIN) Project Transition, and Manpower Development ‘and
: Training ,(MDfA) (Appendix tables. 102. and’ 103).° -At the time
of the survey (1973) a total of 2,605-clients from Federal
programs, wére ing served in 222 workshops. , Régular:pro-
gram workshops were..serving 1,611 clients (62 recent) in
, 117 workshops; 872 clients (one-third) were being served. |
in 69 training and/or evaluation programs; wand york activ-
ities centers were serving 122 clients (5 percent) in 36
centers. : - : ,o

There seemed to be two possible: reagons for the “simi tea
"role of workshops in Federal manpower Rgegrams: (1), clients

of sheltered workshops were mostly mentally or physically

. handicapped while the clients served in Federal, programs

The

socially handicapped are generally “tonsidered less limited
in work production da, ability and more limited by behavior
problems than physica and mentally handicapped persona, -
and this sometimes causes difficulty in developing suitable
programs for the two groupe in a workshop with limited staf
/ and building space; (2) regulations of Federal manpower
‘programs require payment of wages not less than the FLSA
.Statutory minimum but clients in workshops are.usually paid

1A «tended to be socially handicapped~ (disadvantaged).

wages averaging anywhere frem 20 to 80 percent of the,

statutory rate. This difference in wage. payment creates
preblems in integrating Federal. program clients with other

clients in thé workshop. : . * .

Workshops also, réported on the outcome of clients \ .
referred by Manpower Development,” and’ Training, Administration ~
+Programs (MDTA) and served in the ‘reporting ‘Yyear'-- 1972 or
1973 (Table 17). The extent of service in the reporting |
. year by workshop program was. similar’to that shown for all
Federal programs at the time of the study. Work activities”
centers served only a small percentage (6 percent) of the
total number, but: tHe rate of suctegs was about as high as

~ in the other two programs.
“ * Now called “Employment and Training Programs".



respective -progfams, i.e., work activities center clients
had relatively inconsequential production whereas clients
‘in regular program workshops had production averaging above
50 percent of the. productivity of a nonhandicapped worker.

B. Hourly Wage, Payments Pa
Workshops were asked to provide payroll data for all
clients for the workweek which intluded May 15, “1973. {Vlients
‘were identified by type of disability, age, sex, race,/ occu-
pation and number of years employed in the workshop. ‘Whereas
‘the annual wage and -salary data provided shop averages, the
payroll data for the survey week provided ’a distribution of
clients by individual hourl .earnings. Thus, they provide
the basis for an assegsment \of the relationship between the x.
actual earnings of élients classified by selected charadter~ <
istics and the Federal minimum wage, standards applicable to
covered nonhandicapped- workers; these ‘data also make .possible
the computation of the estimated cost of raising the wages. :
° of handicapped cliégts earnings less than the FLSA minimum to
that, level or any other minimum wage level.

Although the workshops in thé survey estimated their

average daily client attendance at 98,076, the weekly payroll
. “data for the May 1973 survey week totaled 88,791 clients
(91 percent of the average daily attendance). .

¢ -@
1.~.Average straight+time hourly earnings
Workshop clients were classified within the three

types of certificated workshop Programs: Regular program
workshops, work .activities centers, and t aining and/or |

aw programs. -



The reports suggested alternative approaches to be
Considered by the’ Congress in order to achieve the goal of.
(statutory) minimum wages for cliewt/employees in sheltered
workshops, inéluding:. . , . -

. .
- wage supplements fow eligible clients; ‘

- financial support, for therapy for workshop

. clients;. ~ . ‘ ,
- additional financial support for workshops for.
training,- including materials, equipment and | ‘
* supervision; « :

~ 7‘opening of new markets for products of workshops;
- additional financial support: to. enable workshops
- to modernize facilities and methods consistefit uy °
-- — .-with needs-of. the clients;....... .. Jt.
. - a technical assistance program for the workshops a
: - including management ageistance; 7 . .
, new out-placement services for workshop clients; ~
ae and
’ -a revision in Federal public assistance laws or
regulations to provide that income from work . -,
performed in sheltéred workshops not be counted —
against the amount given in public assistance,
at least up.‘to,a specified pointy .

Two additional studies jandated bythe Congress inethe :
Rehabilitation: Act of 1973 (Public Law 93-112) have rele- ~*
vance to severely handicapped clients’ -in sheltered .
workshops. These studies were completed in 1974-75: 4

. 1. "The Role of Seltered “workshopin the 7" .
Rehabilitat#on ef the Severely ‘Handicapped" conducted by
Greenleigh Associates was somewha parallel in scope to the
Department of Labor Sheltered Workshop Sgudy. It was ;
originally envisaged ds a joint p, oject with the Department 4
Study but delays in enagtment- of” he Rehabilitation Act made

. a cooperative venture impractical. The Department of Labor ~- —"’,
proceeded independently in mid-1973 but a complete list of

_ certifieated workshops and the approximate number of clients
“employed by them: was provided to Greenleigh staff by DOL bd
staff. DOL representatives also served as liaison’ group .
members for,’ the Greenleigh Study. . a

. . The methodology Of the Greenleigh’ Study differed érom
athe DOL Study ‘in. that. Greenleigh used a sample of 400 work-

shops rath@y, than,the total universe of more than .2,000

workshops luded by the DOL Study. Greenleigh Study, .
also: incl#ded a survey through personal interview Of,_2,140 |
randomly selected dlient/employees or former employees of. . .
workshops. a

5 2 . . vo



“7 3 Most-of the’clients in the workshops did not

‘ receive the fringe benefits usualjy provided .
< . tb employees in the competitive Mabor market.

-CIfients employed in-regular program workshops ~ '

oo seemed to Have more of an "employee" status
: ; than cliefits'in the other two programs; and,
-. - they received some of the usual fringe bene- -
‘ 4fits in about half. of the regular,program . sO
~~“ | workshops. The lack of henefits for work . .
“ aletivities center clients suggested that. they =
+" swere perceived more as a “client" (receiving :
eae ¢: service) than an employee" (prodiicing goods

— ‘Or; services}, —Phe-clients—in-training and. . —— a

as » evaluation programs were likewise seen ina ~ s
. role of reggiving services as a "trainee" or - —

’ .  ‘“evaluee"“tather than "employee"

“Ki Very few/workshops appeared to have the’ .
. Capability to manufacture commodities to sell
sto e- Federal government under the Wagner-
. O'Day Program, but more than one-half of the -
_— . workshops provided training in services’ which
“Cs . might be provided to the Federal government ~*
° ,ona rvice ‘cont’ract. . Workshops for the blind
“+ dominated the manufacturing of commodities, ca
- , many al saMy selling to the Federal government
under the Wagner-O'Day Program, About ten per-
-, 7  “eent of the wofk'shop clients were involved in ¢
wet +manufaeturing. Lo : ca

so Although less than four percent of the workshop
TM,°-élients were involved in rendering services
. such as janitorial, custodial and building, ’ .
and grounds maintenance at the time of the . ~
study, a more recent report on-workshop involve- .
ment in the Wagner-O'Day Program 1/ shows that .. '
workshops segving other than blind clients have
had increasing success in developing contracts .4 VU ¢.
to provide these types of sdrvices to the ° . .
Federal government. The limited size of funding .
of the average workshop makes the involvement “©.
in servVive contracts more practical ‘than manu-

. \

$ facturing because the develop t of services
requires a substantially smalldy investment. .,
. «ae 5
17 Committee for Purchase from the Blind and, other Severely
Handicapped, Procurement List 1976, General Services Adminis-
tratfon, Denver, Colorado, January 1976. . 2 .
7 8 O
’ . ~ 7 14 .
. . aL
: . .



. . . ya8
‘V. CHARACTERISTICS OF WORKSHOPS AND cLIENts

> . . pote ae
Tables 1 and 2 ‘present’ the numerical and percent - ‘
1 distributions of workshops and clients by type,-of organiza~ —

tion, type of operation, and type of program. . ne ‘

oo , ~ . . eo

“A. Workshops” - ..

n . .
_. 1°". Q£ the 1,786 workshop establishitents reporting, three-
fourths were operated as-private corpgrations or components ~-: ‘
and the remaining fourth were publicly operated, Ninety-one
’ percent of the establishments were certificated by the DOL
wunder the FLSA while the maining nine percent of the work- ° «
_Shops were operating without. certification by the DOL (See \
, Technical Note C5). eT ot

. +... For purposes of this study data are reported for
. workshop establighments and for workshop programs. One or
- more programs may operate within a single workshop estab-
lishment. . Three. types of workshop programs are identified: -

a . “". regular program workshops’ . * = ‘
- work activities, centers . .
- training and/or evaluation programs .

Of the 2,530 workshop programs reporting, nearly one-half
_ were work activities centers and one-third were regular
program workshops., Sixty-eight percent of the workshop
wo programs operated as single program establishments, i.é.,
no other workshop program operated with them. A majority
~ ° of the single program establishments were work activities
, centers. . < ’ . ‘

B. Clients - .
. The average daily attendance (ADA) during the reporting

* year was 98,076 for workshops participating in the study. ‘

° ‘The distribution of clients by program generally followed
. . the workshop distribution with 85 percent in’reégular program

workshops and work activities centegs, and 15 percent in

training and/or evaluation programs. The clients were
evenly divided between single program and multiple program,
establishments.” - . . : :



’ Tos, _ VIII. CLIENT FRINGE BENEFITS :
. The provision “of fringe benefits ‘te -handicapped persons ,,
employed in sheltered workshops was a, special concern.of
‘Congressional committees reviewing workshop programs: -The ¢
¢ major issue was whether handicalpped - émployees in, sheltered
. + * “workshops were receiving the fringe benefits normally ‘proy .. Le
, vided to employees in other employment situations. > -

eo This is not a simple -issue to resolve because many -

. handicapped persons in sheltered workshops havé dual status --
client. and employee ‘= -but others may be either - one or the yf
a other.-’ In general terms, a client .is someone who is "receiv- .

ing a service or benefit". whereas an employee is someone who Non
foo4 is “producing _ _goods or services for an emp loyer" .
The handicapped person ina sheltered workshop program -
. may be receiying rehabilitation services not involving pro-
we ductive Work or ,in some .instances the person may be involved: _
‘in a program of “on-the-job evaluation,or on-the-job training 3
. in which he/s) s receiving rehabilitation. sérvices whi
oe producing gogds, or services ‘for the workshop.:.In a thir .
. situation th handicapped person may be ‘an emproyeg. not ‘
receiving any significant rehabilitation services but work- | var.

§ ing in e workshop as. a temporaty employee await, 44 job: -
. ‘placemeh ae in the community, or working as an extended or +

: long-term employee because employment outside the, workshop

aa is either not feasible or not available. ‘In the ‘first 7
‘ +, ‘ instance the handicapped person is a elient; in the second
soot, he/she is a client employee; and ‘in the third an, employee.

. In the 1970 Amendrients to the Employment sechrity Act, og
‘ Congress recognized the special client/employee status of | .
* handicapped persons in shelteréd workshops by excluding vee
» them from unemployment coverage in the section of the’ “Amend- ,
ments which extended coverage to nonprofit’ organizations’. . ~
Some states thave adopted versions of the“exclusionary . . ye
’ ‘language ,in' the Federal Act which in _Most cases appear to’ ‘ .
exclude clients receiving services but require coverage for
. handicapped persons in regular employment, i.e., em| ‘eyees
ae eet .| for whom no services are, ‘being provided. - a Oo @#
a e
In this report andejn the DOL adniintgtration of FLSA.
: regulations pertaining to sheltered worksKops the terms
"- . + "elientTM and "employee" are used interchangeably. ‘The study' .
was designed’ to provide data on handicapped Persops employed
‘in the workshop. exclusively. .
v . . o

~. \ : ; -



. wy ee mo —— .

‘ Two-thirds of the male and female clients employed in
_ training and/or evaluation programs weré engaged £n subcon-
- tract work,’ mostly’ behéhwork (Table 16). Of the remaining .
group 10 to 13 percent weré-‘employed in salvage and renova-
,tion, 5 to 6 percent in manufacturing -and 17 to 20 percen

in miscellaneous occupations. . . :

. “xGomparison of similar jobs in the three programs

‘@: disclosed a substantial difference in client earnings.

_* Simple bench wonk Glients in work activities centers. aver-
j aged about one-third of the earnings of those doing similar
. -work in regular”program workshops; but the. may

been of a lower. skill level,,. “If t se used for dete’

mining wage rates for si

S$ in the three programs
4. was the prevailing indu

‘Fate then the earnings differ-|
- ential is consistent withthe general level. of function of
the’ client’ ‘in. the progr; , t.e., clients in regular pro
gram workshops were producing at a levél of 50 to 75 percent
of nonhanditapped workers and clients in work activities °
-centers ‘had a relatively low productivity level of 20 to 25 ;
percent: of .the nonhakdicapped worker. 1 i
of clientsCin training and/or evaluation programs fell ,
* Between the other -two brograms. ° .

oo, wo . ,

°9, Hourly earning bY client ‘size of workshop

. _ One-third of-the clients if ‘certificated regular program ¢
-* SSworkshops .and work activities centers were ‘employed in work- .
: shops with fewer than 40 clients in average daily attendance.

Ip regular program workshops client earnings were about the _,
. same for the €abulated size groups under 40, ($1.14 to $1.15),
but earnings.increased progressively as the workshop client,
size increased -- from an average hourly wage of $1.14 in. -
the smaller groups to $1.67 in the largest size group (400
clients: or more) (Appendix table 164). . .

- Looe . .

: Client size did not appear to significantly affect +
. average earnings in either work activities edénters or train~
ing. and/or evaluation programs. ‘

wy . 1 . . . x.

hE dg _ *



7

- Also the skill requirement for service work

is much lower in comparison t manufactur ini
in most: work of the type which is feasible’

. for workshop clients. |. , .
. ° ws 4
~ 8
. - .
r.
¢ a ‘
- . a *
- ‘
. ‘
. _ . ° vo?
ay
. cf.
a -
eS - . °
. . ,
- - ’ ‘ .
,
ON
. { .
¢ 4
. . :
woe 7 « 4
9
au “ar
15 ott
‘



6 handicapped clients and virtually all: these centers had no.
inimum requirements. ~ Less than one-third of x ular “pro
gram workshops Kad minimom production reulremeht$ and about

* such” standards. rn ed 5

’ for those workshops ‘having production rpquirements,
: most ‘were limited to six months of ,trial ‘production, ‘
“4. Methods of determining, compecitive hourly Labor
_ rates : .

foe -Workshops are required. under the FLSA, to pay ‘wages

, "commensurate" with the productivity . ofthe client -- wages
: equivalent to those paid nonhandicapped workers in the -.

yicinity in industry maintaining. approved labor ‘standards

for essentially the same type, quality and quantity of work.

Industry Yates are used when available but in.the absence

-\of’ industry rates, time studies other ‘testal may be used’.

to establish piece rates. In sole instances a ‘job -usually

performed by one worker in regular industry may be divided

_ into two’ or more jobs because of the limitations of the

| — _.__- handicapped workers,— En_ether—instances special j igs and_

fixtures may be required so that the ‘item can be produced >

by a blind’’or other physically limited person. When such” .

a job revisions are made industry rates are not generally *

. : ye > :
Work activities centers useq contract supplier rates

more than any ‘other source'-- probably because of thdir
heavy involvement in subcontract work. Also the type of
work performed in centers was mostly unskilled work and
ess likely to have wage ratés establighed by ‘the industry
“or State Employment Service. Another factor in the use of -
supplier rates may have been the lack of ‘technical staff.in
the centefs to perform the necessary wage studies.:

The same pattern was found in , training and/or
@valuation programs with the mental illness and mentally
retarded groups relying on- contractor .rates; general’ pro-

+. grams relying on *State Employment Service and blind group
- Programs on ‘other workshops. _

Soo } . .

one-fifth of the training and/or evaluation Programs had - -

: @pplicable. . bee -
7 &
State Employment’ seivice offices were the Common *
‘squrce of wage rates for regular program wor! iops- (Appendix .
table 68). “Workshops for the blind relied mostly ,on rates
from other workshops, and the mental illness group work-’
. shops relied on the, contract supplier for a majority of *) |.
. their wage rate determinations. . .



. . te . . .

- - an | ; . o

‘Thé noncertificated w rkshops pf .all types had a
participation in this benefit which was 10 to 15 percent

lower than their certifica 1 d counterparts. : .
S

correlation with the provision, of paid holidays in regulary
program workshops (Appendix table 107). Thus, ‘while only‘
30 percent of the certificated workshops with operating ‘
incomes of less than $50,000 provided paid holidays to'~

Workshop operating rei size had a, positive,

' Glients, such benefits were accorded to the clients of

$97 percent of those with operating incomes of $750,000 or .
more. . : on so. : mF

wa-_ Opérating incomé level did not “appear/ to have any
relationship to fhe provision of paid holidays in the other

b#aQ. workshop programs. . .

. Of all the primary disability group workshops, the
blind group had the highest participation with three-fourths
of the programs and’86 percent of the clients in that group
receiving paid holidays. “The general group ranked second
with A2 percent of the programs providing such benefits to .
more than half the clients served by that_group. The mental
illness and mentally retarded groups had the lowest partici-
pation with less than one-fifth of the programs and clients
receiving that benefit. . .

Two-thirds of the Goodwill Industries of America
-Workshops and more than three-fourths of the workshops
affiliated with National Industries for the Blind provided
paid holidays for their clients. + .

2. Paid vacations ~. - —-
“The proportion of workshops providing paid yacations was
slightly [lower than those providing paid holidays (Appendix .
tables 109-113). Fifty percent of. all certificated regular
program workshops serving about one-third of: the clients” .
provided paid vacations. Such benefits were even less common
in other certificated workshop programs. Only 14 percent, of
work activities-centers and ten percent of the training
and/or evaluation programs provided this benefit to their
clients. 7 :

.



. te s
X.° STAFFING AND ‘PROFESSIONAL SERVICES

- The level and. type of affing and proféssional
services in workshops reprelpnt a primary indicator of the
nonwage benefits being provtded to the handicapped’ clients.
This part of the workshop operation is governed by the’
availahility. of funding, the “needs of the clients ‘being
served and. the types of pregram operated Woos .

Lara, Sta’ us “ a

. The wo: hop survey collected data on’ paid and
ry > volunteg x staff in five! 'classificatiol si . -

3 . Professional and ‘adhini stkative staff
é « Production supervisors:
Clerical staff ee
Maintenance ‘staff, 1 .
, a Other ‘staff . mes
. The first two, typds of) ‘arethe most important.
“e dbecause of their diraéct invol t {providing servic to
eco. ‘ élgent’ and/or administexing t piogran- ~ The other thre
- types, comprise | the- ‘Supports staf .

_ The average composition. of paid, staff. -byeworkshop | co .
. ce for comeiriee workshops: was {Ae foblows: _

wots “average antag Of paid ‘staff person
. wm, oe Work ~ Tradning an
- ’ _ : progéan ,. . hop ivi ties. . evaluation” = .
Kt oype of staff . ,workahops | \ -pcentezs* * ‘pragrams Pa
7 ar ers 9 tf
be moka paid state 13.5% * SAD oss oe
. ey Ce m8 — SB Re
, Professional and.” vt eo pe, — ‘
b 4 administ2ative, sthfe - 3.0 - 7.4.6 7.
; , Production, - supervi-" taal ree, €
yo. tet, BOB - 412.9 ~ ov 2,1
o ‘Clerical staff. ‘7 49 . 1.4. .
. ‘Maintenance Staff ne ae ae) °
er staff? , 6 >, 1.2, ; .

=.
Bare “pla! state was supplemented by; yoluntéer workers 3-
a je who’ served without pay for a minimum of four hours or

rendered a bh, Sstantial amount of services ,during the ‘survey i

rs . wath The volunteer “was: most _ importan an: work activities As
Loe . . Cr oe ‘
— + . . x] ‘ vs
- 8 : * -
.s -3 4 As
. 4 3137 ae
- te 1 oe eo “"
& , a



’

~~" (Appendix table 29) These amounted to $61,914,074 con-
|: &e;

On the ’basis the average nymber of clients served
daily by type of workshop program, the average capital Le
, investment’ in plant by regular ;progugm workshops represented
+ °$4,117 per clignt;-in work activities cengjers it was $1,366
per client; and $1,734 in training and/or evaluation
Programs, . . 7 -

-Thé average equ ment. investment represented $1,184
per client served daity in regular program workshops, $353

per client in work activities centers, and $520 for training
and/er evaluation program clients. sy

Workshops also reported capital investments made during - _-
the reporting year (197% or 1973). ital investment for ~
plant ‘arid equipment is influenced | e.availability of TM -

. Federal funds, gifts and other donationg and other capital
resources. The timing. of the\sinvestment may vary widely, ‘\

with capital expenditures generally programmed over a three
to five year period. . , -

s

— A total of 1,195 workshop pragrams (47. percent . x
-“,Xeported capital expenditures for plant: and 1,748 workshops .
(69 percent) indicated ‘capital egyipment expenditures

sisting of $43,575, for. plant (an average of $36,465 © =< .-
per workshop) and $18,138,449 for equipment (an average of - .
$10,327 per workshop ‘reporting such expenditures). ° AO



~ eo 4 .

bec all " Six percent of. thé clients for ‘whom hourly earnings - > "
. . Were reported worked in noncertificated workshops which were
: ‘4either not subject to’ the ELS , were paying their clients

the .statutory wage or More, or- were in violation -of the .

- + Federal, law.~ Clients in noncertificated régular ‘program | _ :
: - workshops were .paid wages ‘which avéraged seven percent«lower’ ~*~
‘ .than in certificated workshops ;*noncertificated work’ ?»*
, “activities cénters paid wages, which averaged 16«percent _
. Tower but average wages paid to,.cliemts in noncertificated

training and/or evaluation programs were 13 percent higher. «.

“ow De _ Bistribution ‘of hourly wages by primary disability
: group served = zt an

a - There was ‘considerable variation in client - . ss o¢ lt
. ° straight-tjme h®urly earnings by primary disability.group,.' —~
» by type of ‘workshop program within each group, and betwetn.
» ‘¢ certificated and thoncertificated workshops (Table 9). Aver~ ~
age wages were higher in certificated ‘workshops ‘in three of .

_ - » the four disability ‘groups for which comparable data were oot
_avaklable. Lets - an : -

nx oe. on .

~ ae . . . : . a - .
Clients in the certificated blind group were-paid the ~ =
. highest wages.in two of the three programs while clients in ~ - - 7
"mentally retarded group workshops were paid the lowest wages .
MM all three programs in certificated and noncertificated se
. workshops, with regular program workshop clients averaging ‘
. about half the level paid the blind group cl4ents.~. woo
. Waye earnings followed a pattedn similar to that fouhd
with regard to* financial operations. - Blind group clients,

were highest functioning, general group ‘clierits second, . oa :
followed by mentally retarded’ and ‘Mental illness group - . aa
| ~ clients performing at substantially lower.levels. — 1°. “
. a“. . ee ot .
a =
: rot i ®

a

<A v= wy. * . .
. hy co
- of oe fy,

‘



- oy

The trend in the past ‘decade has. been toward development , *.
and improvement of services to the more severely. handicapped °
Glient. This gtowth was. aided by amendments to/the ‘Social Joes
Security Act in 1967, 1972 and.1974 which provided ‘for the ,° .
> purchase of care and/or provision of social services. for
handicapped persons who were recipients ‘or poteritial’ recip-
ients'of public assistance. Workshops ,- incl ding work
activities centers, in’ many’ states received Fonds to support, |
long-term services .to handicapped Slients "to improve their ,
-level of economic independente and/or their employability":
This’ program was also stimulated by énactment af the
Developmental Disabilities: Services and Facilities Construc- ~* \
. tion. Act in 1968 which provided for. statewide planning of
, services and facilities for: persons. with developmental | . .
: disabilities, as well as Federal financial assistance in, the “ft

e

levelopment of services and facilities. .

‘ The demand for services ‘for severely handicapped persons

——s

é idly during. this period rms of ser- A
vices to mentally retarded and mfntally i11 petsons who were - .
being “returned to their communifies from State institutions : .

‘ as a result of national priorities for’ "“deingtitutionaliza-

- ° tion" and recént Supreme Court decisions regarding the .
rights of handicapped Persons to educatiqnal servites, and ot
treatment.”* ‘ . . ra oot

sone
' oye

The 1971 Javits Amendments to’ the Wagrier-0' Day act a
ad extended the special treatment preyiously accorded to blind . ..
(workshops in their sales ;of commodities to the Federal” we

‘government to workshops, serving other severely ‘handicapped
Lo persons and ‘added contractual services to the special .
a program. National Industries for the Severely Hartdicapped,

- a counterpart to National Industries ‘for the’ Bkind,’ was - . A
. established in 1974’ with Federal assistance from the Reha~' *_ ,
_ bilitation Services Administration of the U.S. Department ~~

of Health, Education and Welfare. The new corporation was :

designed to conduct research, engineering and prodyct Po .
development work on commodities ,and’ services purchased by ~ of
“the Federal government and to provide téchnical assistance ~ .
to workshops ‘seeking warficipation in the Wagrier~0! Day “
“Program. . oG . .

. . - pe.

ak



° 7 . . . .
A. Cash “Expenditures for Fringe Benefits.

. oe ae
” Workshop wxperareures-For-Eringe*Benefits in the

. Yeporting year are discussed in. Chaptér VI.. The survey .
questionnaire did not request & detailed’ breakdown of fringe
benefit expenditures sufficient to permit determination of

- type of benefits involved, but expenditures for fringé bene-
fits for four groups. of employees were reported. A sumbary
by type of workshop program and by ratio to total expendi-
tures and total salaries and wages (Table 17) shows that’
fringe benefit expenditures for handicapped clients were ~
generally lower than for other employees in workshops.

. A DOL report on employee ‘compensation showed that fringe
benefit expenditures amounted to twelve cents of each wage ¢
dollar paid.to nonmanufacturing, nonfarm employees in 1972 1/
(the workshop reporting Gear): The BLS compensation report
included as fringe benefits expense (or wage supplement
costs) expenditures for retirement programs, health programs,
-unemployment benefits, vacation and holiday fund Paymepts and
Payments to saying plans. -
The workshop survey disclosed -that, workshops had a
fairly limited fringe benefit program, especially work
activities centers and training and/or evaluation programs
in which the handicapped person tends to be more client than
employee. a : .

: be . . ed
icapped persorfs in regular program workshops
+ received substantiallyjmore fringe benefits than those in

the other programs.” ;/. - wot -
coe a f . - ¥ e.

‘17 U.S. Department qt Labor Bureau of Labor Statistics, ©
Employee Compensation in the Private Non-farm Economy, 1972.



. ‘physical or ment'al impdirments are

Ive

4. Work ‘Activities Céntbr certificates |are
on a group basis to those workshops /or appar '
ments of workshops serfing clients whose mal

severe ~

as to make their produ¢tive capacity] inconse- .

quential. Stich prograts must meet certa
qualifications establighed by regulations,
“including average annual earnings or] produc-
set tivity limitations, mailntenance of separate
records and separate supervision. There is
no minimum wage’ rate requirement for} work
activities centers. | 1 . ye

. ee . | . .
, 5. individual Rate certifilcdtes are isswed for .
-__two special types of ‘handicapped wor erst ., :

ssued* yy

a. Workers employed in regular program
. ‘ workshops whose “handicapping condition
. “ « and/or ‘productive gapacity is so limited

a)

es rehabilitation age

Cc. Commensurate Wages and: Overtime Pay Requirements

“that they are unable to earn theimin mui
wage established .fdr the workshop x
an ‘individual rate/set below 50 ‘percent
of the statutory minimum wage rate,
certification or approval ‘of the|State
hey is required. ,
below "25 petcent of
lum wage rate, oo

case may the rate
the statutory mini:

b. Workers emiployed in work activities ~
\ . centers whose ear. ings regularly] amount.
XQ to 50 percent or more of@the st utory
. minimum wage rate/over a recent onsecu-
.tive three-month riod, if no qther ~
suitable employmeht Opportunitids are .
available to them. A limitéd n ber of
f. . such certificates may be issued] under.
regulations, CFR Part,524 goverhing. the
* employment of handicapped workeks in’
. competitive industry.

N

Wages paid to handicapped workers in all cebtificated

programs must be commensurate with wages paid to nonhandi-
| capped*workers in industry in the vic
‘approved standards for essentially the same type, quality
and quantity of work, but wages may ‘not. be less than/ the
' certificate rate if one applies. . Jf :

inity maintaining



‘-. Table: 6. Work Agtivities Cénters: Annual operating income by
. major, source and primary, disability group,served, 1972

. .

“ : .te . : : : Primary disability group 1/
:,Income source * . : Mentally-: . i Menta
1 : retarded : Blind : illness

7 +

Saverage élients per Progvamy, 2/ + 29 42 “ 25 |. 45
Average income .per pkogram: . , a
. Work :program income . - *$25,000 $23,000° $ 29,000 $21,000
Training ‘and eyaluation . -t :
fees. % - 38,000 39,000 | 24,000 67,000 _-
Subsidy income . + ~37,000 43,000 | _230,000 35,000
“Total: income 3/ , . “F2;000 .. “TE,000  “I73;0ad 2-47,000

- a

Average income per client
served: » 2/

‘Work program income
Fee income “
Subsidy income .
Total “ineohe,"3/ +. *

77 Riconoiie? g Silecefaneous ‘groups were €36 small to ‘be significantly. compared .

2/ Average daily client. attendance. -
3/ Averages. do .not add to total due to aifférences in number ef programs
reporting income by source.

an we .
+ Source; Appendix tabits | 45-49. :



’ “y ,

vw

. Two-thirds of the hours worked an certificdted workshops
" were Considered ‘to be uns - rcent was jrated as ‘.
- semi-skilled; and 6 percent as skille (Appéndix table -
197). *, : mo, ~ , :
* Virtually all the work performed by work activities | ‘ :
center clients was rated unskilled; only two ‘percent was. *
_' considered to be semi-skilled. - . . .
Work in training and/or evaluation programs was rated : :
+, ' only slightly.higher with one-tenth semi-skilled and 87 per- ‘
7 cent uriskilled. .. oe . ; os +
. C. Client Wage ‘and Productivity Evaluation rp, a

. ye |

. Part 525 of FLSA regulations requires the maintenance
and periodic ‘review. of client performan&e (productivity) and -
also presdribes methods for ermining rates of pay for

ca clients, * os

¢

1. Clients receiving ‘wage adjustmenits-|

—~;Fer_the-reporting year workshops repor’
” of clients receiving productivity reviews a
‘number whose wages’ were adjusted as a resul
" Productivity reviews were restricted to hou

ed on the numbér 9 ~~
,well as the

1 Of those reviews.
y rated clients

. ' because those on piece. rates are automatica ly paid accord-~° ,
an ing ‘to productivity -= higher production’ means! higher wages
a (Appendix table 63). oF 4 ° .
: sO Eighty-six percent of regular program workshops with : .
. * hourly rated clients completed annual produdtiyity reviews
+7~ + and virtually ’all of them made client wage ddjustments.
+ Nearly one-half of the*workshops granted ifdtedses of five
ents. About
. fe |percent)

"+." percengeor. more oto, at sleast half of/€heir c
C onerefghth gratited énly slight (less than fi
“ " .  ingveases tq most f. their clients.

ry 4

. Nearly every work ‘activities enter completed
, productivity réviews for their hourly rated clients and most
‘dives Of them granted: wage increages' as a result...)
ros “gave, significant increases/(5, percent or mor
4 «gavel slight ‘increases to ‘Halt or more:of thei
a Sot vo. ye :

ws

s' ...



y

o . . 7 «

Two-thirds of the clients in wegular program workshops.
were in general wSrkshops; three-fourths of the clients in
work activities centers were in mentally retarded centeys;
more than half of the clients’ in training and/or, evaluation «

* programs: were in general’ programs and nearly one-third were
in mentally retarded programs, .

De National Organization Member Workshops
¥ +

Data were alo "summarized separately for workshops »
which weré members of ,selected, national organizations: Mad *
will Industries of America (GIA) , National Industries for},
the Blind “~(NIB), and Volunteers of America (VGA). GIA member _
workshops were classified as géneral workshops; NIB membeg ' .
workshops were classified as blind workshops: and°VOA os
member workshops were classified as alcoholic workshops —*

(Appendix tables 7-10). an an

tao

The membership of the national organiza®ions was m
in ‘regular program workshops. GIA workshops represented 20. _ od
percent of total regular program workshops and served 41 7
percent, of the clients; NIB workshops represented 9 percert
of regular program workshops and clients; and VOA workshops
represented 4 percent of regular Program workshops ‘and :2
percent of the clients. . soe

E. Primary Disability of Clients

- ¢ The payroll data collected for the survey week including
May 15, 19%3 provided information on the’ primary disability
,of each client receiving wages (Appendix table 13). ,Client
disability data were not collected ‘for the anntal reporting
period. _ . ws

workshops had mental retardat{on as their primary, disability.
This group had the largest percentage in each ofthe . .
programs =~ thirty percent of the clients in regular program
workshops, more than,three-fourths in work activities

centers and half of the total number in training .and/or
evaluation programs. fo ,

Fifty-seven ‘percent of the clients served in all

° “

Nearly all. workshops served more than one ,disabizi€y, a
especially the mentally retarded clients. in additi to “

_ their primary group. About’ two-thirds of the workshops

served clients with mental -illness/emotional han icaps but

less than half of the workshops servéd visually. handicapped TF
clients. .



_ -pasgage of the Rehabilitation Act of 1973

State rehabilitation agencies into
“of services. : .

, ’

-@#he workshop movement ha } grown fro.
workshops in 1948" to nearly 3,000 certific

and more than’ 400,000 annuall

. 6

The most “recent stimulus for expansion of handicapped |
client employment and services in workshops came,with the, '

which ‘provided -

y.for additional services to severély handicapped: persons,
and ‘has resulted in an increased flow of clientS of the
workshops fort a variety ©

~ -

85 certificated,

ated workshops in,
- 1976 serving an estimated 1454442 hahdicapped persons daily -

ow 4 cig -
: - - . —
. . . a ct .
soe a
. to ae
— 7 oO ‘
. . .
. 1 eo. 7
© . -_ :
. , . + ° .
oO ‘ o ‘ ;
— - ‘ ° £ .
- . of .
s : a Ue s “OY ‘
‘ oy. :
. . ‘ . *”
« . . ww .é
'
a er .
‘ - oe
yoy . \
- . ” ‘ " . .
. . = v .
+
y AIS 21 . ° 7
: ’
\ . . :
aoe , , 4 '



‘ . cd
The fallowing is a comparison of avera annual wage, can
2° ana@ salary axpenditures per vorkshop and per ient served
- (average daly attendance}: ~ . : .
TM . . “ Average ‘expenditures -° .
at e«- Regular Work Training and/ .
. . Program. * activities or evaluation
- ed " "workshops centers programs. | >
n+ Per | * Per Per ~. ae
fe Typé of |. work-" Per work- Per work- -Per~
~" “personnel y shop client shop client shép client
- Handicapped . wot ua : :
is : clients $88 00 $2,047 $13,000 $325 $22,000 $758 .*s: LO
a Pgofessional . aa * Lo > ; om
.: * Stafé 23,000 935 .16,000 400 ~ 32,000 1,103
‘ Administrative . - |, Fated - .
and technical ~ ot «a a
staff 35,000 . 814 12,000 ' 300 17,000, 586
Clerical and vo ’ : : Bn
maintenance 19,000 44 4,000 100 8,000 276 + e -
Wages paid tq handicapped @iénts represented 29, percent:
Of total operating expenditures’ regular program workshops
oe: but only 19 percent in work activities centers and training :
and/or evaluation programs (Appendix tables 53, 54 and 56).
a The average expenditures per client for client’ wages in work -
activities centers was less than one4bixth' af the correspond-~*
‘,2 *. dmg average expenditure in regular program workshops Bete ..
dramatic difference. | 1 . eo he .
ea . ao . ~: woe

® oe Average ~ xpenditures for professional salaries were . ”
ot substantially Nighsr in training and evaluation programs.

The éxpenditure per client’ served (ADA) ‘was nearly three —_

* times that of work activities centers and twice the amount

° + O€ regular- program workshops; pis differential .is consis-

a tent with the greater professional -emphasis of training and * .
evaluation programs. 2 3 . , ,

. - -

* The piaper averages fdr administrative and technical

. staff in regflar programs may have been caused by greater .

+ -ccemphasig on preduction as, compar@@ with services. The ~
average amount shown for ‘the work activities center adminis-
trative and technical’ staff suggests limitation to one 7:
relatively low=Salaried administrator. However, .some work

: activities’center administrators may have operated more than
one centet. Sot : :

; rn

ay, '



»

groups.

A little over half of the ‘work activities cénters made
competitive job placements involving 6,066 clients: (7 per-
cent of thé total served). . :

the better performance ‘in placement which was shown by
training and/or evaluation programs suggests a.greater
‘degree of success in evaluating and training ,clients. a
Another factor. could be the impact of the State rehabilita-
tion agency sponsorship:of clients. “The rehabilitation
agency can pay the workshop for evaluation and training .
services provided to clients,of the State agency. ‘by--cannot ,
pay for sheltered employment. A client. completing training
and moving into competitive employment is perceived by’ the
State agency as a "successful" rehabilitation (closure) of
the client; placement in sheltered employment in a regular
workshop or work activities cénter is viewed as "less
successful." v,

Thé percentage of clients placed by work activities
centers was lowest, but the level is significant because
clients in work aétivities centers have generally been
classified as "inconsequential producers", that is, not
suitable for gainful employment. The seven percent place-
ment rate: suggests three possible reasons: (1) the center
was, highly’ successful with rehabilitation (training) ser- 2}.
vices;> (2) the client was mis-diagnosed in initial
evaluation/screening; .or-(3) the workshop was serving higher
functioning clients as an interim Program when regular
program workshops were not available or accessible to the
client. 7 . . : ”

: : po ‘
2. Placement by primary disability gréup program

In certificated regular program workshops the mentally
retarded group and the general group (the two largest groups)
reported the highest percentages of placements; 15 and 13
percent, respectively, and alcoholic, bligd and mental .

. illness groups had only a-5 to 7 percent placement record...

The range in the certificated work activities centers
was much narrower, fgom seven to nine percent for the major

. oan . - , be
: The placement of clients from trajning and/oMevaluation

programs ranged from 21 percent for the. general group and

blind group to 14 percent for the méntal’iliness group...

.



The record for scertificated work activities centers -—
was almost as impressive. Most of the clients placed had .
@ starting wage of at least $1.60’an hour in 85 percent of
the centers reporting placements. .

. Braining-and evaluation” @rograms had .the best ‘ .

performance with 92 percent reporting starting wages of
$1.60 or more. About one-fourth reported a starting wage
for most clients of at least $2.00 per Hour. 7
’ "6. Follow-up services provided _
- \

_. Most workshops made follow-up contacts with clients =. ,,
and their employers after placement in competitive employ-
ment (Appendix table 101). This service was designed. to
assure that placement was successful and suitable for the
o#tent as well as the-eemployer. Of the workshaps reporting
contacts after job placement-40 to 60 percent ported that .
they maintained contact for six: months oer longer.

G. Interprogram Movement of Clients . to .

—-

Workshops ‘design their programs so. that clients can

. progress from one type of operation to another more ‘complex °

Operation-or job. The client’learns to perfgrm a task and

-Moves up to a new, more challenging task in the workshop. . -

Also, in the multiple-program workshop establishment ~
clients should be able to move from one program to another
(e.g., from a work activities center to a regular program
workshop). and in a single-program ‘establishment clients

should be able to move to another establishment upon achiev-
ing a statisfactory ldvel of performance in.the establishment:

However, the “reports -from workshops inafeate ‘Very little
movement from one workshep program to another (Appendix ‘ .
‘tables 90 and 91). The training and évaluation programs:. >
had the highest level of such movement. . Twelve pertent of.

the clients served moved fromtrainig or evaluatiggkte _
¢ i wetk- . .

other programs. Two-thirds moted to-gegular progr:
sheps and one-third to work actlivities‘qgenters. ~

>

a
: ‘



; \ wo te ge ok ho, gee

ra workshops have clearly. demonstrated a capacity ‘for
tisfactorily performing an important job in meeting’

‘the needs of severely handicapped. persons. \ They oper-

. ,ate jin the dual capacity of prepating the less severely 7

. . handicapped worker for. employment in the competitive

- labor market, and providing long term sheltered employ- |

ment and supportive “ot ie “for the more’ severely shandi= .
capped person who ig “not Likely tg function independently ~

in the community. '

The findings of the seley. suggest that the sheltered -
workshop is a far more desirable alternativé than public ‘
, assistance for our handicapped population -- both from

| an ecotomic and humanitarian consideration. Although

\ the wages earned by a severely disabled person may not °

\meet his or her total financial heeds, anything which

. . will substantially reduce his or her dependence on .

, _ public assistance merits‘ careful. consideration. .

i

» The report ‘shows that funds to support training and other , .
+ development services in sheltered workshops are limited. ya
. The investment in buildings, equipmeht . and industrial
ov, @evelopment also has been minimal in comparison to the
+g ~ J reed and has, therefore, “Shverely employment and train- .
ing opportunitiés for the séverely handicapped population 5

in workshops. x : : . ‘
, ~ . : Nog : z
oe Bae Vb teri | = ne C
. Secretary of Labor. ‘~ . . =
, _ . - ,
. , .
’ oe +
— : .
( ‘ :
‘
. Lol. ‘

re



»"10y Hourly earnings by size of income from work program

. , The size 6f the work program income appeared to be
positively correlated with the’level of client earnings in
regular program workshops; but average earnings of clients
ir§ the other two programs showed" very little variation at

different ‘work program income leve

11. Client weekly hours of work
: ris

1s (Appendix table 165).

. . .
Client earnings-on a weekly and annual basis are, of

course, affected ,by the number

of hours

worked as’ well as
the hourly rate of pay Average weekly hgurs of work varied
workshop program (Appendix

widely by tyes of client a
92)

tables 186-1

SS

Certificate, wrograms’

The pattern df" hours in certificated regu.
workshops was simifar to the leGel of hourly earnings of
clients in the disability groups -- blind and

> te “- =~." Regular Wor! Training’ and/or ©
ve - , program ' activities’: evaluation -
Primary *, workshops centens * programs
disability “Number Average Number Average Number Average
4k ——— group — weekiy* of — weekly —of-——_ weekly —
served clients . Hours clients hours clients hours
All clients 28,286 + 31.3 41,928 21.1 °12,804-——24.8
. . ° . 7 . . .
General 18,871 32.5 6,841 + 23.0 7,384 ‘25.2
Mentally _ . : mot
retarded 47319 26.0 30,429 21.3. 3,923, 24.6.
Alcoholic. + 885 33.8. Cry ee tes ee
Mental . ; . ~N . :
» illness °1,134 22.4 3,674- 16.6 1,198 © 22.3
- Blind 2,990 34.7 * 329. 25.4 185, 30.0
Miscellaneous , 87. 21.2\  ° 655 (15.9. +114 (22,5
_ “ " '

lar program

highest and mentally handicapped lowest (miscellaneous group

was lowest but the size made it insignificant).
work activities’ centers consistentl.
than their counterparts in regular-
training and/or evaluatién programs.

. Clients in

Y averaged fewer'houns .
‘Program workshops agd

general groups ¢



.

The changing composition of the élient population ‘is
reflected the percentage of clients served in each of the
three periods.

. . ; Percent of clients

-. Type of. profran,” ‘Toe 1973, _, 1976
Regular program
workshop 44 “ 3400 . 23
Work activities Tos ‘ -er .
center , 36 - 1 Ao 61
Traiwing and/or. : . : fe
evaluation a om . . ;
program ~ . 20 - 17. ° 16
Total all programs __ 100 100°" * 100

< Two explahtions for ‘the growth. in work activities
center clients are suggested: :(1) The national "deigstitu-
+ tionalization" movement which wasTM returning mentally’
retarded persons and ‘persons’ recovering from mental illness

to ‘the community from state institutions; and (@the' | °
expansion of. funding for sogial services amd extended cate
for severely handicapped persons under Federal, State and
logal government support ‘ ayes. : .

c* &

- Another possible factor in the shift of clients may ©
have been the greater flexibility acgorded a work activ-
ities cénter under FLSA, regulatig) 8 as.compared to the
requiremrnts | ‘Qf a regula’ Brogram workshop. operation. In,
order to serve the serevely lyffited élient the workshops
may have elected to secure a’ work activities center
‘certificate, involving~ a, groupe certificate, rather than
attempting to serve “those clients*who cannot‘meet. regular
program workshop standards\through “wte\use of individual
rate certificates. ;The. need for a closer examination of
sthe work activities: ‘center operation, is sugges ed to
” determine whether -the shift has in fact wesulted in expanded’
services to sijents with gréatér’ ‘severity? of disability:  \'

a compar’sion Of the1967 and tors. studies shows that
the greatest- grawth has been in programs serving primarily
_ the mentally retarded’ persqns and the greatest percentage
“increase was for “mental illngss groups.. These are the 1
-dominant groups.in work Activities centerg and are generally
+ considered the most sexferly limited clients.
. > c . ” } a ws ’ _— .

Se * . 7

8

“e. - - 3 4% - ; - -

. “4 . . : cog &.. . . a
aw. of wo



. om “oN ft .

2 Policy changes were net required in most workshops of

, both types (dual and single program) because of the separ :

ration of the work activities center required by FLSA, -
regulations (Appendix table 143). The changes had a mixed
effect on the admisstons of both "inconsequential" pro- .
ducers and "better" producers -~ some workshops reported
‘increases while an equal number indicated decréases or no ee
significant change. -

a Workshops operating dual program& currently .and prior
to the effective date of thé 1966 Amendments were asked for
an assessment of the effect of the charge on a variety of

. functions related to the client and the workshop. Because

@ few of the workshops operated dual programs prior to 1967

the response of this section of the questionnaire was’ ’
+ limiteds . . . ;

Most of the workshops employing both types of producers
in an integrated program prior to 1967 reported that the
Change had no significant effect on: (1) the productivity

work activities center clients or yegular program clients;,  _
2) the number of therapeutic services prowided clients; ae
(3) the ratio of’ staff to clients; (4) the number of programs ‘
emphasizing non-work activities; (5) the earnings of clients;

-/ (6) the procurement of contract's suitable to the skills and
disabilities of the clients; (7) the work assignments which ’
meet individual rehabilitation needs; (8) and layout of work

/ or work planning for clients ‘(Appendix tables 144-157).

Of those workshops that reported some degree of effect

/ or change, 35 percent indicated increases in the produc-, —~
tivity of regular program workshop clients and 15 percent
experienced increases in the productivity of work activities”
center clients. " e

The .staff+client ratio slightly: decreased in more than so
one-fifth of the regular program workshops but it increased .

slightly in about one-third of the work activities centers
involved.

Increases in earnings of clients in the regular program
workshops ‘were indicated for 43 percent of respondents. .
Earnings increases in the work activities center were
reported by less than one-fourth of the group.



t Table 17. Annyal expenditures for fringe benefits for

. .
*

’ sheltered workshop employees by type of
. ‘ ‘workshop program . .. -, a

Type of . . Total
workshop program expenditures

“ Averagé Percent Percent of

* * per of total wage, and
workshop expend- s@lary ex-

(in thousands) reporting ~ itures penditures

Regular program . ‘ Fo an
__ workshops {
ndicapped clients” $ 5,497 $6,906 2 8
fessional staff 2,041 2,564 1 ll
v Administrative and °
technical staff 2,805 3,523 Jl 9
Clerical and main- y . ;
tenance staff 1,388 1,744 0.5 9
Total fringe bene- : _ ‘
fit expenditures 11,761 14,737 5. + 7
- Work activities . _g : el
centers: .
Handicapped clients 854 857 1 6 SL
Professional staff 1, 887 1,895 2 10 ”
Administrative and ro °
technical staff ~.. L, 233 1 $38 .2 9
_ Clerical and main- | t we .
, tenance staff - oa 401 w 403, ° 0.5 28.
Total fringe bene- . : .
fit expenditures . 4,374 4,392 ~ 6 8
Training and/or ‘
evaluation
" programs * . °
Handicapped clients _ 466 1,489 1. 6°
Professional staff 1,113 3,556 ‘ 3 - 10
Administrative and . ‘ _
technical staff 534 1,706 10°
Clerical and main- . -
tenance staff 282 = 901 11
Total fringe bene- . . . _ a
x fit expenditures 2,394 7,648 © "6 9

Sourge: Apvendix tables 52-54.



: . ‘ ot . 7

. - . soe
Table 3, Sheltered workshop qurrent capacity, and potential for ~'
- serving additional clients, 1973 &

; ” '

~ if . . : @ “Training V me,
oan . Regular ‘Work | and/or . '
— : ~~ *® All-+—-——-program- —éetivities——evaluation . ‘ =
. workshops workshops - centers’ programs : al
Total clients served . . . ”-
.  @uring year Loe 267,920 + °118,167 85,391 - 64,362 .
‘ Highest number of an . : oy
clients served during . . . ~ . ‘ .
: any one week . 120,997 45,396 56,263 - - 19,408 4
=. Average daily attendance, 98,076 - ’ 36,978 46,273 14,825 . . . ‘
Maximum nfiBer that can : % ,
' be served daily }/ . 188,240 72,682%—q 85,398 30,160 a a
: + Percent of average . . . _
. » daily attendance 192 197 . 185. a - ae
. + . - 7 le
Workshops that can serve. ~ ; oo, — oo oy
additional clients in . - . . - .
Present facility: 2/ , 2,115 580 ~ 617—- 298 i
'.. Average’ daily 7 ‘
attendance. - 39,962 28,019 .. 22,609 9,334
_ : . Additional clients . oy . 4
3 ‘that gan be served 28,014 . 13,900 ‘8,997 5,117
- Percent of average . : . ut : |
daily attendance, : AD 50 40 - 85.° . yd
‘ » . : '
. ¥ “Assuming adequate staff and work available. . .
my 2/ With present staff assuming available and sufficient work. . _
ees . . . . 1s mo :
. Source’: Appendix tables 21-23.. ‘ ; : . . i sO , 1
woe .* 48
47, ; :