The Failure of the Disability Service 

System to Provide Quality Work

January, 2011

Segregated & Exploited

A Call to 

Action!
National Disability Rights Network: Protection, Advocacy & Assistance

The National Disability Rights Network (NDRN), is the nonprofit membership organization for 

the Protection and Advocacy (P&A) system and Client Assistance Program (CAP). The 

P&A/CAP network was established by the United States Congress to protect the rights of 

people with disabilities and their families through legal support, advocacy, referral, and 

education. The P&A/CAP network is the largest provider of legally based advocacy services 

to people with disabilities in the country.

NDRN strives to create a society in which people with disabilities are afforded equal 

opportunity and are able to fully participate by exercising choice and self determination. It 

promotes the integrity and capacity of the P&A/CAP national network by providing training, 

technical assistance, legislative advocacy, and legal support. NDRN advocates for the 

enactment and vigorous enforcement of laws protecting the civil and human rights of people 

with disabilities. Reports, like this one, are an integral part of the services NDRN provides to 

the P&A/CAP network and the disability rights movement in general.

Please visit www.NDRN.org for more information.

Cover photo by WQAD in the Quad Cities, IA (www.wqad.com). Image of the unheated and boarded up 

bunkhouse where Henry’s Turkey Service housed its workers with disabilities.
A Letter from the Executive Director

Dear Friends,

Today, across the United States of America, hundreds of thousands of

people with disabilities are being isolated and financially exploited by their 

employers. Many are segregated away from traditional work and kept out of 

sight. Most are paid only a fraction of the minimum wage while many 

company owners make six -figure salaries. Many people profit off of their 

labor. All, except the worker. For many people with disabilities, their dream 

of leaving their ―job training program‖ will never come true. They labor 

away making only a tiny portion of what they should because there is a system in place that provides 

no true alternatives. 

For the past several decades, activists and advocates for disability rights were complacent in our 

silence. The National Disability Rights Network, included. We fought for and continue to fight for 

community integration and an end to the abuse and neglect of people with disabilities while 

neglecting the evidence that segregated settings, sheltered work and sub-minimum wage contradicts 

this effort. Sheltered workshops are not what they promise to be, and sometimes serve as an 

unsettling example of how good intentions can lead to terrible outcomes. 

The truth is that people with disabilities can—and do—work in all areas of the American workforce. 

They thrive when they fully participate in their communities, and in turn, the nation thrives.

Unfortunately, sheltered workshops and the sub-minimum wage still exist today because of selfinterested employers and systematic neglect by federal agencies, buttressed by outdated stereotypes 

of people with disabilities and the low expectations held by the general public, lawmakers, and, sadly, 

even some families and the disability rights community. Simply put, sheltered workshops are just 

another institution segregating people with disabilities away because of our unwillingness to accept 

that our perceived notions about their ability to work may be wrong. 

This call to action is long over-due. It is time to end segregated work, sheltered employment and 

sub-minimum wage. Now. 

Sincerely,

Curtis L. Decker, Esq.

Table of Contents

Segregated & Exploited

The Failure of the Disability Service System to Provide Quality Work

Executive Summary ..................................................................................................................................... 7

Segregated & Exploited ......................................................................................................................... 11

A Brief History of Segregated & Sheltered Work .......................................................................... 12

Contradicting National Policy ............................................................................................................... 15

Work Segregation of People with Disabilities is Damaging ...................................................... 24

Sub-minimum Wage Reinforces a Life of Poverty for People with Disabilities................... 28

Sheltered Workshops Lead Nowhere ................................................................................................ 32

Sheltered Workshops Profit Greatly from the Status Quo ......................................................... 35

Policy Recommendations ...................................................................................................................... 45

End Segregated Employment & Sub-minimum Wage ............................................................... 46

Promote & Facilitate Integrated Employment ............................................................................... 46

Increase Labor Protections & Enforcement ..................................................................................... 49

Conclusion ..................................................................................................................................................... 51

Appendices .................................................................................................................................................... 52
Commonly Used Phrases

Employment: an activity performed by an individual where there is an expectation of wage for 

services rendered and the services are primarily for the benefit of the employer. 

Work: an activity done on a personal basis to enable personal growth and skills development, 

improve social interactions, and development of self by contributing to society through volunteerism 

or increased community interaction and participation in civic events. While there is a valued 

relationship in this activity, it is not necessarily recognized through financial remuneration. 

Competitive Employment: work in the labor market that is performed on a full-time or part-time 

basis in an integrated setting for which the individual is compensated at or above minimum wage, 

but not less than the customary and usual wage paid by an employer for the same or similar work 

performed by individuals who are not disabled.

Supported Employment: competitive work performed in an integrated work setting where 

individuals are matched to jobs consistent with the strengths, resources, abilities, capabilities, 

interests, and informed choice and are provided individualized supports to learn and keep the job. 

Sheltered Work Settings: separate environments known as sheltered workshops, affirmative 

industries, training facilities, and rehabilitation centers which congregate large numbers of people 

with disabilities and claim to be providing rehabilitation geared toward transition into the general 

labor market by providing activities that typically involve repetitive tasks; the workshop was 

designed by parents to give their sons or daughters dignity, self worth, socialization, and most of all 

respite because parents had peace of mind that their son or daughter was safe, secure, and 

protected against the risks and demands of the competitive world. 

Financial Exploitation: the wrongful taking, withholding, appropriation, or use of the money, real 

property, or personal property of an individual with a disability.

Sub-minimum Wage: section 14(c) of the Fair Labor Standards Act allows employers to pay 

individuals less than the minimum wage if they have a physical or mental disability that impairs their 

earning or productive capacity. 
NDRN’s Policy Recommendations

Detailed recommendations can be found on page 46.

End Segregated Employment and Sub-minimum Wage for 

People with Disabilities

 Restrict all federal and state money that is spent 

on employers who segregate employees with 

disabilities from the general workforce.

 End the ability of employers to pay employees with 

disabilities a sub-minimum wage.

 End all programs that emphasize moving young 

adults from the classroom to a segregated or subminimum wage employment environment.

Promote and Facilitate Integrated and Comparable Wage 

Employment Alternatives

 Strengthen existing and create new federal and 

state tax incentives for employers to place 

employees with disabilities in integrated 

environments at comparable wages.

 Assist employees with disabilities to find 

employment in the general workforce in jobs that 

they choose.

Increase Labor Protections and Enforcement

 Fully investigate violations and abuses perpetrated 

by employers that pay less than the minimum 

wage or segregate workers with disabilities. 

 Increase penalties for violators.

 Formalize standards for employee evaluations and 

productivity measurements.

Executive Summary

The National Disability Rights Network (NDRN) has been studying segregated work, sheltered 

environments, and the sub-minimum wage to determine whether they meet the needs of people with 

disabilities and whether they comply with federal law. Unfortunately, what we found was 

disappointing to say the least. 

The product of this study is our call to action, 

―Segregated & Exploited: The Failure of the 

Disability Service System to Provide Quality Work.‖ 

Through this report, NDRN casts a spotlight on 

the problems of segregated work, sheltered 

environments, and sub-minimum wages. This 

report identifies the barriers to employment that 

people with disabilities face and dispels myths 

about their capability to be fully employed, 

equally compensated, and an integral member of 

American workplaces and communities. It 

illustrates a systemic failure to provide hope and 

opportunity to young people with disabilities who 

want to transition into traditional work but instead 

wind up trapped in a sheltered workshop with 

little chance for something different.

In the best of situations, sheltered environments,

segregated work, and the sub-minimum wage

does not truly provide a meaningful experience

for workers with disabilities. Workshop tasks are 

often menial and repetitive, the environment can 

be isolating, and the pay is often well below the 

federal minimum wage. In the worst situations, 

the segregated and sheltered nature of the lives of 

workers with disabilities leaves them vulnerable to 

severe abuse and neglect.
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The Problem of Segregated Work, Sheltered Environments & Sub-minimum Wage

The central arguments against segregated and sheltered work, and the sub-minimum wage can be 

summarized as the following:

 Segregated Work, Sheltered Environments, & Sub-minimum Wage Directly Contradict

National Policy. The passage of the Americans with Disabilities Act (ADA) in 1990 was a major

step in correcting past wrongs faced by people with disabilities. It provides broad protection in 

employment, transportation, public accommodations, telecommunications, and public services 

for people with disabilities. In the following two decades, more laws, legal decisions, and state 

and federal regulations came to be, all making a very clear statement: people with disabilities 

should live and work independently in their communities. Segregated and sheltered work—by 

definition—goes against this very principle. But more than that, it keeps people with disabilities 

marginalized and hidden in the shadows and these environments create opportunities for 

abuse and neglect to occur. While good national disability policy exists that could remedy this, 

there is an incomprehensible lack of oversight and enforcement of these good policies.

 Work Segregation of People with Disabilities is Damaging. Segregated work facilitates

feelings of isolation for many people and impinges on the natural desire to connect with 

others. Sheltered workshops have replaced institutions in many states as the new warehousing 

system and are the new favored locations where people with disabilities are sent to occupy 

their days. People with disabilities deserve the right to live and work independently in their

chosen communities. These work settings violate statutes passed to encourage just that. 

 Sub-minimum Wage Reinforces a Life of Poverty for People with Disabilities. Labor law 

exemptions for employers of people with disabilities have created jobs that pay as little as 10% 

of the minimum wage with most workers earning only 50%. Reports on sheltered workshops 

often show that workers take home about $175 each month, while those working in traditional 

jobs take home about $456 each week. Few workers receive health or other employment 

benefits typical for the average American worker, and since workers do not have a voice, there 

is little opportunity to improve their conditions. Yet their employers are reaping the benefits of 

their labors. 

 Sheltered Workshops Lead Nowhere. Sheltered workshops are predominantly set up as a 

type of ―job training program‖ that teaches valuable skills and prepares people to compete for 

traditional jobs. Unfortunately, the reality is vastly different. They are often taught skills that are 
P a g e | 9

not relevant or transferable to traditional work environments. Even with the dramatic 

improvements in competitive employment, there remains three individuals in segregated day 

programs for every one person working in competitive employment. 

 Sheltered Workshops Profit Greatly from the Status Quo. While many sheltered workshops 

argue that the cost to provide work for people with disabilities is higher than similar worksites 

with a labor force consisting largely of people without disabilities, the facts do not support it. 

Not only are their profit margins protected by statutes allowing them to pay workers far below 

the minimum wage, they also receive sizeable subsidies from the local, state and federal 

governments equaling as much as 46% of their annual revenue. Since sheltered workshops 

don‘t have to compete in the open market to earn income, they also don‘t have to do the 

things other businesses must do like innovate, adapt, and evolve. Sheltered workshops today 

are not very different than they were when they were started more than 170 years ago—and 

that is the problem. 

Sheltered workshops are often celebrated for providing an altruistic service to their communities 

while neglecting the fact that in reality they provide workers with disabilities with dead-end jobs, 

meager wages, and the glimpse of a future containing little else. 

Considering these stark realities, it is clear that segregated and sheltered work no longer provides 

workers with disabilities an opportunity for ―life, liberty, and the pursuit of happiness.‖ They may no 

longer be warehoused in institutions without meaningful daily interactions, but the change may 

merely be logistical. Segregation—whether it be in an institution or at work—is still segregation. 

Separate is still not equal.

–  –  –
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Americans with Disabilities Act

Statement of Findings

“Historically, society has tended to isolate and segregate individuals with 

disabilities, and, despite some improvements, such forms of discrimination 

against individuals with disabilities continue to be a serious and pervasive social 

problem, ... individuals with disabilities are a discrete and insular minority who

have been faced with restrictions and limitations, subjected to a history of 

purposeful unequal treatment, and relegated to a position of political 

powerlessness in our society....”
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Segregated & Exploited

Often, good intentions go wrong. Segregated and sheltered work and paying less than the minimum 

wage are perfect examples of that axiom. They are programs that were designed to help people with 

disabilities learn meaningful skills and obtain gainful employment, while protecting them from public 

judgment, ridicule, and shame. 

Today, we live in an era of evolving thinking about people with disabilities. Attitudes have changed. 

So have many laws. But most importantly, what has changed is the quality and quantity of 

information available illustrating that segregating and sheltering workers with disabilities and paying 

them less than minimum wage is no longer the best course of action. It is time we value the unique 

skills and talents of people with disabilities and move toward full workplace integration.

A Brief History of Segregated Work, Sheltered Environments, & the 

Sub-minimum Wage

Sheltered workshops have existed since as early as 1840 with the Perkins Institute for the Blind, an 

institution in Massachusetts. Jobs for people who were blind were protected, or sheltered, from 

competition in order to create permanent job opportunities for them. This concept was cutting-edge 

170 years ago. Today, it is a quaint notion at best that should be left behind. 

The origin of sub-minimum wages for people with disabilities stems from the National Industrial 

Recovery Act, one of the early pieces of President Franklin Roosevelt‘s New Deal. On February 17, 

1934, President Roosevelt issued an Executive Order which stated that it was permissible to pay 

individuals with disabilities ―below the minimum established by a Code.‖1

In 1938, the Fair Labor Standards Act (FLSA) was passed. It specified standards for basic minimum 

wage rates and overtime pay. It also created a special exemption authorizing employers to pay wages 

that were significantly lower than the minimum wage to workers with disabilities.2These wage 

provisions were originally created to encourage the employment of veterans with disabilities in a 

manufacturing-centered economy.3 

 

1 William, Whittaker, Treatment of Workers with Disabilities Under Section 14(c) of the Fair Labor Standards Act, Federal 

Publications, Paper 209 http://digitalcommons.ilr.cornell.edu/key_workplace/209 (2005). 

2

 29 U.S.C. 201, et seq.

3 Whittaker, supra note 1
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Case Study: 

Henry’s Turkey Service

Atalissa, Iowa

The story of the workers at Henry‘s Turkey Service, a meat processing 

plant in Iowa, is an appalling example of the abuse that can happen when 

workers with disabilities are segregated and sheltered away from others. 

At Henry‘s, as many as 60 men from Texas with intellectual disabilities 

once lived together, ate together, traveled together, and worked together. 

All day. Every day.

Henry‘s wasn‘t only these men‘s employer. They also acted as landlord, ―caregiver,‖ and was the representative payee for

their Social Security payments. The housing they provided—a 106-year-old cockroach infested, unheated abandoned 

school turned bunkhouse—had boarded up windows and a cracked foundation. Records show that Henry‘s paid $600 

each month in rent for use of the tax-free bunkhouse. For the privilege of living in the bunkhouse, the company deducted 

approximately $10,000 a week from their paychecks.

These 60 men worked alongside men without disabilities. They did the same job and worked the same long hours. 

Unfortunately they were not treated the same. They were verbally and physically abused, taunted, and humiliated because 

of their disabilities. Their movements and contacts were restricted, and they were not allowed appropriate access to 

medical care. 

They were not paid the same either. The men‘s net pay averaged $.41 an hour although they performed the same work 

as their co-workers without disabilities who earned between $9 and $12 an hour. At the end of the month, and after the 

various levies Henry‘s assessed, the men got to keep approximately $65 each month. 

Source: Clark Kaufmann, State closes bunkhouse that housed mentally retarded workers, Des Moines Register, February 8, 

2009; Henry’s turkey Service once praised, now condemned, Des Moines Reporter, May 25, 2009; Clark Kaufmann, Turkey 

service faces fines of $900,000 from Iowa, Des Moines Register, May 29, 2009; Clark Kaufmann, Henry’s Turkey Service told 

to answer state’s questions, Des Moines Register, April 13, 2010 Clark Kauffman, Ruling: Henry’s cheated workers at 

Atalissa turkey plant, Des Moines Register, May 7, 2010.

Sheltered workshops increased in popularity in the 1950‘s and 1960‘s. In 1963, the Developmental 

Disabilities Assistance and Bill of Rights Act (DD Act) was passed. Beginning the shift in national 

policy, the DD Act focused on the need to provide support and opportunities that promote 

independence, productivity, integration, and inclusion of people with disabilities in the community 

with an emphasis on employment.4

 

4 42 U.S.C. §§ 15041-15045 The Bunkhouse The Bunkhouse
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Despite the positive philosophy promoted by the DD Act, the 1966 amendment5created an even 

broader definition of disability under the FLSA, increasing the number of workers that can be paid less 

than the federal minimum wage while also increasing the prevalence of sheltered workshops.6In 

contrast, the Rehabilitation Act (Rehab Act) of 1973 provided a clear emphasis on the importance of 

competitive wages, even for those individuals with the most significant disabilities.7 However, in 1986, 

a step backward occurred when the FLSA was amended again. This amendment removed any specific 

minimum wage floor for workers with disabilities, making it even more profitable for employers to 

exploit their employees with disabilities.8

The ability to pay individuals with disabilities sub-minimum wages for their work is still alive and well 

today. The Department of Labor (DOL) Wage and Hour Division is given the authority to issue 

certificates to employers allowing them to pay less than the prevailing wage if a disability interferes 

with the productive or earning capacity of a worker on the job.9

In such cases, the individual with a disability is not given a competitive wage, but is, instead, paid a 

commensurate wage that compares the individual productivity of the worker with a disability to 

objective data reflecting the prevailing wages of at least three employees without disabilities who are 

engaged in comparable work within the community.10

For example, if the prevailing wage for a particular job is $8 an hour and the productivity of the 

individual with a disability is determined to be 50% of the experienced employees without disabilities, 

the commensurate wage would be $4 an hour. 

This narrow sub-minimum wage law, developed more than 70 years ago and designed to help 

veterans within a largely industrial economy, is not acceptable today. The types of jobs available to 

individuals with disabilities are no longer limited solely to low-skilled or manufacturing-type tasks. 

Additionally, many kinds of assistive technology—from power wheelchairs to high-tech 

communication devices—open the door for people with significant disabilities to pursue employment 

opportunities that were previously thought to be unrealistic or even impossible.

 

5 PL 89-601

6

 Whittaker, supra note 1

7 P.L. 93-112 

8 Whittaker, supra note 1

9 FLSA Section 14(c), the Payment of Special Minimum Wages to Workers with Disabilities for the Work Being Performed, 

http://www.dol.gov/elaws/esa/flsa/14c/

10 Id.
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Despite the good intentions to provide job opportunities for workers with disabilities, the results have 

been a disaster. The Vocational Rehabilitation (VR) Longitudinal Study reviewed 8,500 recipients of VR 

services from 1994 to 2000, and confirmed that people placed in sheltered work earned far below the 

minimum wage and failed to make gains in earnings over time.11 

According to the study, of the 7,765 people placed in sheltered work in 1998, 89.3% earned less than 

the minimum wage of $5.15 an hour. The average hourly earnings for people placed in sheltered 

work was $3.03. One year later, average hourly wages dropped to $2.64 an hour. Two years later, 

average hourly wages rose slightly to $2.84.12 The problem of low wages is compounded by limited 

work hours and limited access to health insurance.13 People placed in sheltered work averaged 27.6 

hours per week. One year later, the average work week was 28.1 hours and the following year 29.1 

hours per week.14 

Lastly, according to the study, for people placed in sheltered work, only 16% had health insurance. 

One year later, the number dropped to 12%. For people with disabilities in integrated employment, 

the wages started at $7.56 an hour, and rose to 13.48 an hour, with 58.8% of individuals having access 

to health insurance three years after receiving VR funded services.

15

The history of segregated work, sheltered environments, and sub-minimum wage highlights the 

contrasting national policies toward people with disabilities and work. It is time to acknowledge that 

policies developed more than a half century ago that supported sheltered work and sub-minimum

wage are out of step with national disability policy today.

 

11 B.J. Hayward & H.S. Davis, Research Triangle Institute, Longitudinal Study of the Vocational Rehabilitation Services 

Program, 3rd Final Report: The Content of VR Services (2005), http://www2.ed.gov/rschstat/eval/rehab/vr-final-report-3.pdf. 

12 Fredrick K. Schroeder, ―Address to the 1th Annual National Federation of the Blind Convention‖ (July 7, 2000) available at

http://nfb.org/legacy/bm/bm00/bm0008/bm000805.htm.

13 Institute for Community Inclusion, StateData: The National Report on Employment Services and Outcomes (2009), 

available at http://statedata.info/datanotes/pdf/Statedata2009.pdf citing H. Boeltzig, J.C. Timmons, J. Marrone, (2008). 

―Maximizing potential: innovative collaborative strategies between One-stops and mental health systems of care.‖ in Work: 

A Journal of Prevention, Assessment, and Rehabilitation, 31(2), 181-193

14 Fredrick K. Schroeder, ―Address to the 1th Annual National Federation of the Blind Convention‖ (July 7, 2000) available at

http://nfb.org/legacy/bm/bm00/bm0008/bm000805.htm.

15 Id.
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Segregated Work, Sheltered Environments, & Sub-minimum Wage Directly 

Contradict National Policy

Activists and advocates for disability rights have worked for decades for community integration of 

people with disabilities. Building on that work, Congress and the Supreme Court have established a 

strong national policy promoting the integration of people with disabilities into all facets of life, 

including employment. Some laws, however, still conflict with this policy. 

The History of the Development of National Community Integration Policy

Congress first promoted the idea of community integration when it enacted the (Rehab Act) in 1973, 

which identified one of its purposes as ―promot[ing] and expand[ing] employment opportunities in the 

public and private sectors for handicapped individuals and to place such individuals in employment.‖

In 1984, Congress amended the DD Act so that the ―overall purpose was to assist States to assure 

that people with developmental disabilities receive the care, treatment, and other services necessary 

to enable them to achieve their maximum potential through increased independence, productivity, 

and integration into the community In 1990, Congress enacted the Americans with Disabilities Act 

(ADA), declaring that ―the Nation‘s proper goals regarding individuals with disabilities are to assure 

equality of opportunity, full participation, independent living, and economic self-sufficiency for such 

individuals.‖ Congress found that ―the continuing existence of unfair and unnecessary discrimination 

and prejudice denies people with disabilities the opportunity to compete on an equal basis and to 

pursue those opportunities for which our free society is justifiably famous, and costs the United States 

billions of dollars in unnecessary expenses resulting from dependency and non-productivity.‖

16

 

In 1991, the Department of Justice issued regulations implementing the ADA which required public 

entities to ―administer services, programs, and activities in the most integrated setting appropriate to 

the needs of qualified individuals with disabilities.‖17

As part of the Rehab Act amendments of 1998,18 Congress found that ―disability is a natural part of 

the human experience and in no way diminishes the right of individuals to ... pursue meaningful 

careers ... and enjoy full inclusion and integration in the economic, political, social, cultural, and 

 

16 42 U.S.C. § 12101(a)(8)

17 28 C.F.R. § 35.130(d)

18 P.L. 105-220
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Eleanor’s Story

Eleanor is a 22 year old woman who enjoys 

spending time hanging out with her friends, 

chatting and laughing. She graduated from high 

school in 2008 and like many people her age had 

to choose the next step in her life. Eleanor 

decided she wanted to work and that she did not 

want to go to a sheltered workshop or other 

segregated training program.

―Sheltered workshops are a waste of time, and 

they don‘t pay minimum wage,‖ Eleanor said 

during an interview. ―If you‘re in a sheltered 

workshop you can‘t interact with people who don‘t 

have a disability.‖

Eleanor, who has Down Syndrome, loves people. 

She wanted a job where she could talk to people 

and use her customer service skills. She tried 

getting experience through a program that offered 

specialized training but they wouldn‘t listen to her 

requests to work with people and made her do 

tasks they thought were a better fit.

So, being a strong self-advocate, she fired her job 

developer and hired a new one who found her a 

job as a courtesy clerk at a new store where she 

could put to use her best skills. Eleanor 

represents the next generation of young people 

with disabilities who won‘t settle for an outmoded 

employment system that offers nothing but 

segregation and financial exploitation.

educational mainstream of American society.‖19 Congress stated that the purpose of the Rehab Act is 

to ―empower individuals with disabilities to maximize employment, economic self-sufficiency, 

independence, and inclusion and integration into society.‖20 In 2001, the Rehabilitative Services 

Administration (RSA) limited employment outcomes in Title I of the VR system to integrated 

employment. RSA decided that segregated and sheltered work could only be funded with Title I 

funds under temporary training circumstances leading to integrated employment. It reflects the intent 

of Congress for rehabilitation to prepare people with disabilities to be equal and productive members 

of America‘s workforce.

The Ticket to Work and Work Incentives Improvement 

Act of 1999,21 further recognized that work should be 

in an integrated setting. The purpose of the Act is ―to 

establish a ... program that will allow individuals with 

disabilities to seek the services necessary to obtain 

and retain employment and reduce their dependency 

on cash benefit programs.‖22

In 2000, Congress reinforced the national policy 

promoting community integration when it amended 

the DD Act in 2000.23 Congress stated that the 

purpose of the DD Act is to assure, among other 

things, that individuals with developmental disabilities 

and their families ―... have access to needed 

community services, individualized support and other 

forms of assistance that promote ... self-determination, 

productivity, and integration and inclusion in all facets 

of community life.‖

24

 

When Congress enacted the Individuals with 

Disabilities Education Improvement Act (IDEA) of 

 

19 29 U.S.C. § 701(a)(3).

20 29 U.S.C. § 701(b)(1). 

21 P.L. 106-170.

22 P.L. 106-170 § 2(b)(4)

23 P.L. 106-402, 42 U.S.C. §§ 15001 et seq.

24 42 U.S.C. § 15001(b)
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2004,25 it declared that, ―Improving educational results for children with disabilities is an essential 

element of our national policy of ensuring equality of opportunity, full participation, independent 

living, and economic self-sufficiency for individuals with disabilities.‖26 

In its 1999 landmark decision, Olmstead v. L.C., the Supreme Court held that individuals with 

disabilities had to be provided services in the most integrated setting appropriate to the needs of 

qualified individuals with disabilities.27

The New Freedom Initiative, announced by President Bush in 2001, was a nationwide effort to remove 

barriers to community living for people of all ages with disabilities and long-term illnesses. It 

represented an important step in working to ensure that all Americans have the opportunity to learn 

and develop skills, engage in productive work, choose where to live and participate in community life. 

One of its goals is to ―integrate Americans with disabilities into the workforce.‖28

President Obama summed up the national policy of promoting community integration of individuals 

with disabilities when he introduced the ―Year of Community Living,‖ stating:

―I am proud to launch this initiative to reaffirm my Administration's commitment to 

vigorous enforcement of civil rights for Americans with disabilities and to ensuring the 

fullest inclusion of all people in the life of our nation.‖

29

Laws Conflicting with National Community Integration Policy

Although the legislative, judicial and executive branches have promoted integration in all facets of 

community life for individuals with disabilities, some laws are still in conflict with this policy. One 

example of such a law is the Javits-Wagner-O‘Day Act of 1971,30 now commonly referred to as the 

AbilityOne Program. AbilityOne, enacted more than 70 years ago, is a federal law that requires all 

federal agencies to purchase specific supplies and services from non-profit agencies which employ 

individuals who are blind or have severe disabilities.31 While the law does provide for employment 

 

25 P.L. 108-446 

26 20 U.S.C. § 1400(c)(1).

27 527 U.S.C. § 581 (1999)

28 http://www.hhs.gov/newfreedom/init.html.

29 White House Press Release (6/22/09) http://www.whitehouse.gov/the_press_office/President-Obama-CommemoratesAnniversary-of-Olmstead-and-Announces-New-Initiatives-to-Assist-Americans-with-Disabilities/

30 41 U.S.C. § 46 – 48c

31 41 U.S.C. § 48
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opportunities for people with disabilities, it does so at a steep price. The non-profit agencies that 

fulfill the federal contracts are allowed to pay their employees based upon pay rates that are less than 

the prevailing wage. These contracts encourage people with disabilities to work in segregated 

environments, allowing for little, if any, interaction with co-workers without disabilities. In order to 

obtain an AbilityOne contract, the agency must ensure segregation because at least 75% of the direct 

labor hours required to produce the commodity must be provided by people with disabilities.32 The 

AbilityOne program is lagging behind the national policy of full integration and community inclusion 

and needs to be updated. 

Another law of concern is the FLSA Section 14(c) described in the previous section which allows 

employers to pay employees with disabilities less than the minimum wage.33 NDRN believes this 

provision to be out of date and that all individuals who can perform the essential functions of their 

jobs, with reasonable accommodations, should be paid minimum wage, regardless of whether they 

have a disability.

The continued government sanctioning and support of segregated and sheltered work through 

AbilityOne and the FLSA sends a message that people with disabilities are not truly equal.

This must change.

Enforcement Problems with Federal Laws Regarding

Segregated Settings and Sub-minimum Wage

VR Agencies Bungle Compliance and Quality Reviews

State VR agencies cannot use federal funds to help an individual find permanent employment in

segregated settings,

34 and are required to conduct an annual review and re-evaluation of people with 

disabilities who are referred to or who choose to work in them.

35 State VR agencies must also 

conduct an annual review when an individual achieves employment following participation in a VR

program but is paid sub-minimum wage under a 14(c) certificate. These annual reviews must occur 

for the first two years after the VR case is closed, and then annually if a review is requested.

36

 These 

 

32 41 U.S. C 48b(4)(c)

33 29 U.S.C. § 214(c)

34 34 C.F.R. § 361.37.

35 34 C.F.R. § 361.55.

36

 34 C.F.R. § 361.55.
P a g e | 19

reviews are intended to assure that maximum efforts are made to assist the individual in engaging in 

competitive employment through the identification and provision of VR services, reasonable 

accommodations, and other necessary support services.

Although clearly laid out in the regulations, RSA does not track compliance of this requirement when 

collecting annual data from the state VR agencies thus, there is no record of annual reviews taking 

place or of the quality of reviews and re-evaluations. Without compliance information, people

referred to segregated settings may become stuck in a sheltered workshop because the VR did not 

follow-up. Workers paid less than minimum wage may have improved and be able to earn more, but

it would be missed because an annual review was not conducted. Without proper oversight and data 

by RSA regarding compliance with these federal requirements, VR agencies may be failing to ensure 

individuals do not become trapped in segregated settings or earning below the minimum wage.

Oversight and Enforcement of FLSA 14(c) Certificates

In 2001, the Government Accountability Office (GAO), DOL, and the Office of Inspector General issued 

reports critical of the oversight of the sub-minimum wage program.37 The GAO stated that ―Labor has 

not effectively managed the special [sub] minimum wage program to ensure that 14(c) workers receive 

the correct wages because ... the agency placed a low priority on the program...‖ noting problems like

failure to act on expired certificates, and no data nor system to verify worker productivity.38 

Though DOL‘s Wage and Hour Division worked to address the GAO‘s concerns,39 and focused on low 

wage and vulnerable workers,40 oversight and enforcement problems remain. As of 2009 only three 

Division staff and a supervisor were assigned to review the 2,500 annual renewal applications as well 

as first time applications for 14(c) certificates. Since each staff member processes 800 applications in 

a year, it is questionable the level of depth and analysis possible to ensure that the employer is 

conducting valid productivity measures and wage assessments. This is further compounded by the 

fact that between 2004 and 2009, DOL conducted on average 135 on-site reviews of 14(c) certificate 

 

37 GAO, Special Minimum Wage Program: Centered Offer Employment and Support Services to Workers with Disabilities, 

But Labor Should Improve Oversight, GAO-01-886 at 4 (September 2001).

38 DOL, Office of the Inspector General, The Wage and Hour Division’s Administration of Special Minimum Wages for 

Workers with Disabilities (March 2001).

39 Preventing Worker Exploitation: Protecting Individuals with Disabilities and Other Vulnerable Populations Hearing Before 

the S. Comm. on Health, Education, Labor and Pensions, 111th Cong. 13 (2009) (Statement of John L. McKeon, Deputy 

Administrator for Enforcement, Wage and Hour Division, DOL.)

40 DOL, US Labor Secretary sends message to America‘s under-paid and under-protected:  ̳We Can Help!‘

http://www.dol.gov/opa/media/press/whd/WHD20100411.htm (April 01, 2010).
P a g e | 20

holders, representing about 4% of the certificates held by employers in 2010. In addition, it is unlikely 

given the structure of the 14(c) statute that Wage and Hour Division staff consider whether an 

employer is providing reasonable accommodations as required under Title I of the ADA to allow 

individuals to properly perform jobs when reviewing employers paying sub-minimum wages.41 

More critical is the inability of DOL to properly follow-up on employers who fail to renew their 14(c)

certificate and inform DOL of the reason. Each year, of those employers required to renew 14(c) 

certificates, approximately 250 fail to respond to renewal notices. After follow-up by the Wage and 

Hour Division, 45 indicate the certificate is no longer needed and 45 never respond. Thus with no

apparent additional follow-up by DOL relating to expired certificates, employers may purposefully or 

by mistake continue to pay sub-minimum wages in violation of the FLSA. 

Henry‘s Turkey, Service mentioned earlier in this report failed to renew a 14(c) certificate while 

continuing to pay sub-minimum wages. Protection and Advocacy agencies have further uncovered 

employers who allowed their certificates to expire while continuing to pay a sub-minimum wage. 

DOL reported in 2009 that it receives very few complaints about the sub-minimum wage program.42 

Given the vulnerability of individuals with disabilities paid sub-minimum wage, most of whom have 

intellectual, cognitive, or mental disabilities, it is not surprising few complain.

43

 Therefore, more proactive oversight is necessary to assure the protection of the rights of workers with disabilities in 

sheltered workshops being paid sub-minimum wages.

No Implementation of IDEA Transition 

Transition services are defined in the IDEA as a coordinated set of activities for a student, designed 

within a results-oriented process that facilitates movement from school to post-school activities. The 

areas of adult living to be considered include preparation for postsecondary education, vocational 

education, integrated employment (including supported employment), continuing and adult 

education, adult services, independent living, and community participation.44 Services are to be based 

on the individual student‘s needs, taking into account the student’s preferences and interests.45

 

41 DOL, US Labor Secretary sends message to America‘s under-paid and under-protected: ̳ We Can Help!‘

http://www.dol.gov/opa/media/press/whd/WHD20100411.htm (April 01, 2010).

42 Id. at 15

43 GAO,19, 29 (Statement of James B. Leonard, Former Attorney, U.S. Department of Labor).

44 20 U.S.C. § 1401(34); 34 C.F.R. § 300.43(a).

45 Id. (emphasis added).
P a g e | 21

Additionally, any other agencies that may be responsible for providing or paying for transition 

services must be invited to the IEP meeting.46 Schools are expected to become familiar with the 

services available to students with disabilities in their communities and ―make use of this information 

in the transition planning for individual students.‖47 The result:

[S]chools can facilitate linkage with agencies when needed by students, can ascertain 

requirements for access to, and participation in, the opportunities offered by these 

agencies, and thus can effectively communicate this information to students and their 

families, and identify ways in which they can prepare students with disabilities to take 

advantage of these opportunities.48

All too often, however, neither the requirement to base the transition services on the individual needs 

of the student, the requirement to base the program on the students interests, nor the requirement to 

establish linkages to other services while a student is still in school are met. VR linkages are easily 

forgotten or overlooked because VR's role in the transition planning process is simply advisory until 

the student completes an application for services and is found eligible for VR services. Therefore a 

comprehensive needs assessment is not conducted and the individual never actually becomes a VR 

client, accepting instead, alternatives put forth by the school system.

In Montana, schools do not provide sufficient resources for transition services while the student is still 

in school; therefore sheltered employment becomes the default placement. Very, very few students 

receive any sort of employment exposure or job opportunity awareness outside of a resource room 

setting. The training of professionals on the resources available and how to develop a transition plan 

are not a priority and almost non-existent. Teacher training seems to always focus on academics. 

There are extensive waiting lists for services funded through Medicaid waiver for such things are job 

coaching, job placement assistance and residential services. Parents are often times overwhelmed 

with the concept of transition planning and service waiting lists. They become willing to accept 

anything that becomes available because at least it is something. Also, parents may have limited 

resources and are not able to self-fund services.49

 

46 34 C.F.R. § 300.321(b)(3).

47 H.R. Rep. No. 101-544 at 12, U.S. Code Cong. & Admin. News 1990, p. 1733.

48 Id.

49 January 13, 2011 email from Lori Idland, Disability Rights Montana.
P a g e | 22

From Mike Montgomery

Former Director, Singing River Industries—A Sheltered Workshop

We found that people could work in the community, if someone was willing to work with employers to accommodate 

individual disabilities. Our ideas sometimes scared families. They had been told by doctors and service systems that their 

kids needed to be in a sheltered and safe environment. Although some of the parents of children in the workshop began 

to realize that their son or daughter could do good work, it was the switching of environments that was troubling. One of 

our parents, who at the time was very concerned that his son stay in the safe environment of the workshop, recently told 

me that his son was working in a restaurant where he was very happy. He could now see the benefits of working in the 

community. His son enjoyed being viewed as a regular employee, but for fewer than forty hours. Families need 

assurance that their children will have a meaningful job and not spend part of their time at home alone.

In the late 70s folks believed, and I think that many still do, that people need to be sheltered. They just don‘t believe that 

people can grow with the right training and support, that they can have a good life. I believed that we owed it to each 

individual and family to try new ideas and work diligently for each person regardless of disability. If we fail to put our heart 

and soul into the challenge for everyone, we would never see their potential. Everyone that I have ever worked with truly 

wants a life with work, a place to live, friends, and social outings. A job provides the money to secure everything else.

VR Agencies Fail to Meet Their Transition Obligations

The VR system also has a role to play in preparing students for the world of work while they are still in 

school. In fact, VR agencies must be actively involved, in collaboration with school officials, to plan for 

and provide services to students with disabilities during their transition years.

The law requires state VR agencies to ―increase their participation in transition planning and related 

activities.‖

50

 Accordingly, there must be coordination between the VR agency and education officials 

to facilitate the transition from the special education system to the VR system. VR agencies are to be 

actively involved in the transition planning process with the school districts,

51 not just when the 

student is nearing graduation.‖52

All too many state VR agencies, however, are still unwilling or unable to get involved until very late in 

a student‘s transition to post-school activities.

 

50 66 Fed. Reg. 4424 (emphasis added).

5134 C.F.R. § 361.22(b).

5266 Fed. Reg. 4424.
P a g e | 23

Oregon P&A Finds Neglect at Sheltered Workshop

In a large cavernous room, 30 individuals with disabilities were sitting at tables. Some were 

doing puzzles and art work, others were staring blankly at the wall. When advocates from 

Disability Rights Oregon who were inspecting the facility asked why all of these individuals 

were in the room, they were told that there was no work available and the law stated ―they had to 

go somewhere.‖ When further questioned about the lack of staff supervision and the absence of 

structured activities, they received the response ―it‘s a mellow group, they don‘t need much.‖

In a far corner of the room sat Barry, segregated away from his peers. On the table in front of 

him were two boxes, one with rocks and the other without. Advocates were told that Barry‘s task 

each day was to count the rocks as he placed them from one box to the other. Barry went to the 

workshop to build skills that would help him get a job, but was given a box of rocks. Alvin, Barry‘s 

housemate, sat three tables away, his hands raw and red. Staff said that though they‘ve tried 

measures like hot sauce and restraint, they had been unable to prevent him from chewing on his 

hands. They stopped trying to intervene. Another worker, Mary, asked to speak to the 

advocates. Staff said she was one of their happiest residents and would share the positive work 

that the workshop and the provider were doing. When alone in the room, Mary said that she was 

bored and wanted to do office work. She had tried to express this to the staff but they told her 

that there were no other options for her and that she should make the best of it.

Disability Rights Oregon filed a licensing complaint relating to the health and safety status of 

the room and for the lack of structured activities and staff supervision of individuals. The provider 

received both state and federal funds to provide both pre-employment and on-the-job vocational 

skills but workers received no assessment or vocational training. Advocates filed two abuse 

complaints based on the neglect of Barry and Alvin. Due to the work by the P&A, the Board of 

Directors of the provider agency made significant changes in personnel decisions and policies. 

Mary received representation from a P&A attorney and is now making plans to move into her own 

home and is starting to do part time office work in the community.
P a g e | 24

Work Segregation of People with Disabilities is Damaging

All individuals, even those with the most significant disabilities, have a right to live and work in the 

community alongside their peers without disabilities. However, rather than wholeheartedly embracing 

this inclusive philosophy, people with disabilities are often placed in segregated environments which 

allow for little contact with those working in the community. Such work settings violate statutes and 

court decisions, discussed in other sections of this report, which were passed to encourage individuals

with disabilities to thrive within community settings. 

What is the theory underlying the segregated employment perspective? Put simply, the support for 

segregated employment environments is predicated on misguided public attitudes and beliefs that it 

is perfectly acceptable to marginalize and isolate people with disabilities.53 This philosophy seems to 

echo the idea behind the so-called ―ugly laws,‖ in existence until the early 1970s, which made it illegal 

for those with ―disgusting or unsightly‖ disabilities to appear in public.54 These startling laws were 

eventually repealed, yet surprisingly, segregating people with disabilities still remain.

The detrimental effects of placing individuals with disabilities into segregated work environments are 

numerous. First, it denies an adult with a disability the opportunity to make meaningful job choices. 

Almost all of the options within a sheltered workshop are unskilled, low-wage jobs with few, if any, 

benefits.55 The limited array of employment choices directly impacts an individual‘s capacity to live a 

full, rich life as an active, tax-paying member of the community.

When discussing the concept of choice as it applies to people with disabilities, the central conclusion 

should be that all people, even those with the most significant disabilities, have the right to enjoy the 

same choices and options as other people in society.56 Assuming that a person with a disability is 

incapable of making choices is often used as a justification for placing that individual into a 

segregated or sub-minimum wage work environment. You rarely, if ever, will hear a person say, ―I 

want to attend a sheltered workshop!‖ Rather, a person likely ends up working in a sheltered or 

segregated environment simply because it was presented as the only available opportunity.

 

53 Jacobus TenBroek, The Character and Function of Sheltered Workshops, (1960), 

http://www.blind.net/resources/employment/the-character-and-function-of-sheltered-workshops.html.

TenBroek founded the National Federation for the Blind, which copyrighted this article in 1995. TenBroek‘s classic 

observations from this article still hold true more than 40 years later.

54 David Boles, Urban Semiotic, Enforcing the Ugly Laws,2007 http://urbansemiotic.com/2007/05/01/enforcing-the-ugly-laws/

55

 TenBroek, supra note 33.

56 Steven Taylor, On Choice, http://thechp.syr.edu/on_choice.htm
P a g e | 25

Myth: 

There are no other options for students with disabilities exiting

school. 

Fact: 

Segregated or sheltered work is not the only option for children with 

disabilities exiting school. IDEA entitles people with disabilities to a ―Free 

and Appropriate Public Education‖ in the least restrictive environment. 

However, transition from school to eligibility-based services is a confusing 

paradigm for most parents and children. They are not always informed of 

the availability of VR and the vast array of services provided to increase an 

individual’s potential employment. They trust the educators who may 

falsely believe that sheltered workshop placement is in their child’s best 

option. Children, young adults with disabilities, and their family members or 

guardians need to learn about other options for employment besides 

segregated employment. They need to understand the benefits of early 

attachment to the workforce and understand that person-centered planning 

and a thorough assessment of skills, interests, and abilities will contribute to 

a plan of employment that can be meaningful and rewarding. In addition to 

direct competitive employment, options such as supported employment and 

customized employment are available through VR and other centers. 

These services coupled with work incentives can significantly contribute to 

the financial security of a real job for real wages. 

Success Story:

William is 21-years old and works at McDonald‘s. He loves his job and has 

even been awarded ―employee of the month.‖ William has an intellectual 

disability and receives supported employment services through a county run 

program. This program provides him with a job coach who helps with 

transportation, instruction, and safety precautions. When the county 

informed him they were cutting his job coach from 3 hours per day to 3 

hours per week, William knew he could not perform his duties at 

McDonald‘s. Fearing that his only option was a sheltered workshop he 

asked the Minnesota P&A to appeal the cuts. The Judge agreed with 

William and found no legitimate rational for the county‘s decision. William 

continues to work at McDonald‘s with the supports he needs. 

Many states are now focusing on 

consumer choice as a key value in 

the growth and reform of their 

community-based long-term 

support systems. With this focus 

however, has come an awareness 

that low participation in integrated 

employment, and community life in 

general, is evidence of a lack of 

choice for people with disabilities 

that needs to be addressed.57

On a related note, the importance 

of considering the job preferences 

of the individuals with disabilities 

cannot be underestimated. A 1998 

study looked at the relationship 

between self-determined behavior 

(control over one‘s life choices) and 

positive adult outcomes. It found 

that 80% of the people who were 

rated as ―highly self-determined 

were working for pay,‖ compared 

to 43% of the people who were 

rated as having low levels of selfdetermination.58 The individuals 

with disabilities who had more 

input into their job selections were 

more likely to be employed within 

the community.

 

57 Lisa Mills, Revitalizing Integrated Employment: A Study of Nationwide Best Practice for Increasing Integrated 

Employment Outcomes Among People With Developmental Disabilities, (December 2006).

58 Michael Wehmeyer & Michelle Schwartz, The Relationship Between Self-Determination and Quality of Life for Adults with 

Mental Retardation, 33 Education and Training in Mental Retardation and Developmental Disabilities, 3, 12 (1998).
P a g e | 26

Everyone Deserves a Job They Love

A young woman, in her 20‘s, who happened to have a 

cognitive disability, worked for 5 years at a cafeteria 

on a college campus. She loved her job and eagerly 

looked forward to work each day. This young lady 

particularly loved the variety in her job – she stocked 

shelves, greeted customers and cleaned tables. Her 

mother reported that the consistent interaction with 

others in the community improved her social skills. 

When her job at the cafeteria was eliminated by the 

college, she was placed in a sheltered workshop. She 

reported being very unhappy due to the boredom and 

repetitive nature of the work. Her work behaviors are 

reportedly not nearly as strong as they were when she 

was working in the community and she no longer 

looks forward to her job at all.

The consistent isolation of people with disabilities from people without disabilities can significantly 

hinder the proper development of socialization skills and self-esteem. Several important studies have 

confirmed this key conclusion. For example, a study of the results of the 1994 closing of North 

Princeton Developmental Center in New Jersey, published by the American Association on Mental 

Retardation, compared people who moved from institutional settings to similarly situated people 

who, instead, remained in institutions.59 

The study produced convincing evidence that 

the multi-cognitive scores of people who 

remained in institutional settings significantly 

decreased over a seven-year period.60 Based 

upon this data, it seems possible to draw an 

analogy between the diminished opportunities 

for interactions with others resulting from 

institutional segregation and the diminished 

social interaction opportunities presented by a 

segregated employment setting.

This study also concluded that those who 

moved to community settings demonstrated 

significant increases in self-care skills over time. 

The authors concluded, ―If we had focused 

solely on the  ̳movers‘... we would have missed 

one of the most salient findings of this 

evaluation, namely, the significant loss by 

 ̳stayers‘ of their multi-cognitive competencies, 

particularly in the area of social skills....‖ 61

The effects of this segregated isolation may be even more direct and concrete within the employment 

context. A lack of social skills and/or poor self-esteem issues can be easily misinterpreted by 

employers as a non-compliant response to a particular work assignment.

62 More specifically, a study 

that considered self-esteem issues for people with disabilities revealed that when placed in a

 

59 P Lerman, D. Apgar et al. Longitudinal Changes in Adaptive Behavior of Movers and Stayers. Mental Retardation Journal, 

American Association on Mental Retardation. 25, 41 (2005).

60 Id. at 41

61 Id.

62 TenBroek, supra, note 33
P a g e | 27

sheltered workshop environment, individuals with mental illness were more likely to exhibit problem 

behaviors and demonstrate a poorer attendance record.63

Segregated work environments commonly exist in industrial workshops that are situated in remote 

locations far from major cities or towns. These locales serve to further intensify the sting of the 

separation because of their limited access to transportation options, community activities as well as 

infrequent interactions with their family members and friends without disabilities.64

The benefits available to people with disabilities working within integrated, traditional jobs are 

plentiful. According to the DD Act, integration means ―exercising the equal right of individuals with 

developmental disabilities to access and use the same community resources as are used by and 

available to other individuals.‖65 For instance, a Wisconsin survey of guardians of people with 

significant disabilities who moved from institutions to integrated community settings led researchers 

to conclude that the vast majority of guardians felt that the transition to the community led to equal 

or enhanced satisfaction with their loved one‘s living arrangements and overall happiness.66

A literature review, related to the previously mentioned Wisconsin survey, concluded: ―The studies 

reviewed here demonstrate strongly and consistently that people who move from institutions to 

community settings have experiences that help them to improve their adaptive behavior skills. The 

studies suggest that community experiences increasingly provide people with environments and 

interventions that reduce challenging behavior.‖67

When an adult with a disability has access to effective training and support as well as the opportunity 

to find a traditional job in the community while becoming an essential part of the community, it is 

good public policy. When this goal is achieved and implemented appropriately, the lives of people 

with disabilities will no longer have to center around concerns about dependency and poverty.

 

63 J. Ciardiello, Job Placement Success of Schizophrenic Clients in Sheltered Workshop Programs, Vocational Evaluation 

and Work Adjustment Bulletin, 125, 140 (1981). 

64 Id.

65 42 USC § 15002(17)

66 Northern Wisconsin Center Relocation Survey – prepared by APS Healthcare, Inc. for The Wisconsin Department of 

Health and Family Services, Division of Disability and Elder Services, (2006). 

67 Id.
P a g e | 28

Skills Ignored

Andy has been working in a sheltered workshop for more than 15 

years. He shreds paper. The warehouse where he works is a 

large and cold cavern where the walls echo with the rumbles of 

the industrial-sized shredders that are on full power the whole 

day. The air is filled with dust. 

Andy has autism. Outside of the workshop, he completes daily 

life activities such as shopping, cleaning and even paying bills 

almost completely independently. His favorite hobby is to buy old 

computer parts and build new computers. He has taught himself 

five languages and has a photographic memory which he 

exercises by telling people what clothes they had on the last time 

he saw them. He frequents the local library scanning dozens of 

books on whatever topic is of interest to him at the moment. 

His employer, who is also the provider of his housing and other 

Medicaid funded services, has expanded rapidly over the last five 

years and Andy‘s current work environment bears little 

resemblance to the quiet and warm office he used to work in. 

Because of his disability, Andy has a low threshold for social 

interactions and a sensory sensitivity that causes him to avoid 

loud and cold areas. The only time Andy will work now is when 

he is sequestered to a corner of the room. He must wear a winter 

parka, face mask and ear plugs while working. Getting him to 

work requires constant coaxing by his supervisor. Yet, Andy‘s 

employer and service providers have not looked at other 

employment possibilities in the community because, they say, he 

is too shy and there are no other options for him other than 

shredding paper. 

So Andy is only able to fulfill his potential in his free time by 

putting computers together while reading a manual in Chinese.

Sub-minimum Wage Reinforces a Life of Poverty for People with Disabilities

The lack of a true minimum wage for many workers with disabilities keeps them in a life of perpetual 

poverty. It leaves them dependent on family or government programs just to meet their basic needs 

of food, shelter, and medical care. It 

denies them the opportunity to take 

advantage of the pleasures—continuing 

education, vacations, restaurants, and 

hobbies—that many people take for 

granted. It prevents them from achieving 

true independence. 

Worse, once in this system, it‘s almost 

impossible for workers with disabilities 

to get out. They become trapped in a 

vicious cycle. Due to an exception in 

labor laws discussed earlier, workshops 

can pay less than minimum wage to 

people with disabilities.68 This forces

them to continue to rely on federal 

benefits such as SSI and Medicaid which 

themselves require recipients to be poor. 

This circular system is responsible for 

creating a class of citizens permanently 

dependent on public benefits and 

subsidies because their employers pay 

less than the minimum wage and 

provide no benefits. Earning at least the 

minimum wage, if not a living wage, 

would allow workers with disabilities to 

support themselves and reduce the 

amount of aid they receive from 

government sources.

 

68 29 U.S.C. § 214(c).
P a g e | 29

The majority of workers in sheltered workshops that are paid less than the minimum wage receive 

incredibly low pay. According to a 2008 study of 291 individuals with disabilities from 40 sheltered 

workshops, the average hourly earnings were $2.30 and average monthly earnings were $175.69.69 A 

recent University of Indiana study indicated that, in May 2009, people in sheltered workshops in 

Indiana earned an average of $1.59 per hour.70 Additionally, employees who receive housing, food or 

transportation from their employers often find fees for these services deducted from their weekly 

wages—leaving them even less money for necessities. And even worse, at some sheltered workshops, 

employers serve as the Representative Payee of their employees‘ Social Security benefits, giving them 

even more control over the finances of their employees.

Conversely, people with disabilities in competitive employment earn much more. The 2008 study 

followed the 291 individuals as they moved from sheltered employment into supported employment, 

and found that their average hourly earnings increased to $5.75, with average monthly earnings of 

$456—more than twice what they earned in the sheltered workshops.71 Another report titled, 

―Sheltered vs. Supported Employment,‖ found workers with disabilities in traditional jobs paired with 

support services earn two to three times more than their counterparts in sheltered work. A worker 

making just the minimum wage would earn $270 each week compared to the $100 that a sheltered 

worker would make working full time at $2.50 an hour.72

Hypothetically, if a sheltered workshop did pay the minimum wage, you would expect a worker with a 

disability to earn a decent living in this situation.

This is not the case.

Yet another characteristic of sheltered work prevents workers from ever escaping a life of poverty. 

Sheltered workshops survive on contract and piece work. They, however, do not secure the 

number of necessary contracts needed to run the workshop at full capacity resulting in substantial 

down-time and periods of inactivity. Some of these hours are supposed to be spent improving 

skills, the reality of life in a sheltered workshop consists of sitting around idle waiting for the next 

 

69 Alberto Milgiore et al., ―Why do adults with intellectual disabilities work in sheltered workshops?‖ 28 Journal of Vocational 

Rehabilitation 29-40 (2008) at 29.

70 T. Grossi et al., Indiana Day and Employment Services Outcomes System Report (May 2009), at 2, available at 

http://www.iidc.indiana.edu/styles/iidc/defiles/CCLC/desos_5_09report.pdf.

71 Milgiore, 28 Journal of Vocational Rehabilitation at 29.

72 John Kregel and David H. Dean, Sheltered vs. Supported Employment: A Direct Comparison of Long-Term Earnings 

Outcomes for Individuals with Cognitive Disabilities, in Achievements and Challenges in Employment Services for People 

with Disabilities: The Longitudinal Impact of Workplace Supports Monograph (Kregel, et al., editors), at 75, available at

http:// http://www.worksupport.com/main/downloads/dean/shelteredchap3.pdf 
P a g e | 30

I heard a woman speak about how she 

would like to work in a ―regular job at 

regular pay.‖ The woman had lived in an 

institution for many years, then a group 

home, and eventually an apartment. At 

that time she had been working in a 

sheltered workshop for 16 years. The 

woman wanted to know how long she 

had to be in training before she could 

graduate and get a job.

— Vickay Gross

Disability Rights North Dakota

contract or order to come in. Most workers in sheltered workshops work less than part-time. 

Some work just a few hours a week. The GAO found that 86% of workers being paid less than the 

minimum wage were also working part-time.73 Further, with no opportunity to work full time for 

people who want to, nor any opportunities to advance internally through regular raises or 

promotion, workers with disabilities are left with nothing but the fear, stress, depression and 

despair that comes with poverty.

One alternative is customized employment. Customized 

employment means individualizing the relationship 

between employees and employers in ways that meet 

the needs of both. It is based on a determination of the 

strengths and interests of the person with a disability, 

and the needs of the employer.

It may include employment developed through job 

carving, self-employment, or entrepreneurial initiatives, 

or other job development or restructuring strategies that 

result in job responsibilities being customized and 

individually negotiated to fit the needs of individuals 

with a disability. Customized employment assumes the 

provision of reasonable accommodations and supports 

necessary for the individual to perform the functions of a 

job that is individually negotiated and developed. 

Customized employment works because it is person-centered, and driven by the interests, strengths 

and conditions for success of each individual. It is real work for real pay in integrated settings. It is 

not based solely on job development techniques to secure existing work through a competitive 

employment process. A customized job is a set of tasks that differ from the employer‘s standard job 

descriptions but are based on actual tasks that are found in the workplace and meet the unmet needs 

of the employer. Practitioners and innovators in customized employment accomplish customized job 

descriptions through job carving, negotiated job descriptions, and job descriptions specifically created 

to meet the employer‘s unmet needs. 

 

73 GAO, Special Minimum Wage Programs: Centers offer Employment and Support Services to Workers With Disabilities, 

But Labor Should Improve Oversight,‖ GAO-01-886 (Sept. 2001),at 4, GAO-01-886, available at 

http://www.gao.gov/new.items/d01886.pdf
P a g e | 31

Laura’s Story

Customized Employment Success with Georgia Employment First

(based at the office of Georgia Advocacy—the GA P&A)

Two to three days a week she wakes early and travels to the bakery shop. Laura, who 

is a person with mental illness loves baking and has mastered pastries and cookies. 

The shop where she works is small and under-capitalized. Both the owner and Laura 

recognized that the business could benefit from serving coffee, but the state-of-the-art 

machine was expensive and required major electrical and plumbing work. Through her 

customized employment program, Laura was able to purchase the espresso maker for 

the business. This purchase by Laura resulted in a resource partnership and significant 

expansion of services for the small pastry shop which is now also a coffee shop. Laura 

maintains ownership of the espresso maker which she can take with her should she 

choose to change employment. Laura‘s customized employment and resultant 

partnership has created improved customer service and profitability for the company 

and the resource ownership has provided Laura a position of importance which she 

values. Now, in addition to baking pastries and making coffee, Laura sells chocolates, 

treats, small games, and trinkets from her own business within a corner of the shop. 

The owner helps her price the items in her shop, keeps track of her inventory and 

assists her in calculating costs and profit. This is a win-win situation for the both the 

coffee shop owner and Laura her employee and resource partner.

Unlike traditional day and employment programs for people with disabilities, that often encourage an 

employment path of stereotypic work options, customized employment begins with the assumption 

that the job seeker is ready for work, and has a valuable contribution to make that is based on their 

unique skills, interests and preferences. Customized employment does not occur in segregated settings. 
P a g e | 32

The Bigotry of Low Expectations

A Sad Statement defending sheltered 

workshops from the Mentally Retarded 

Citizens of Missouri:

"Persons with mental retardation are not 

normal and they never will be. Quit trying 

to make them something they are not!"

http://www.rcomo.org/whatisasw.htm#Defense

(1/13/11)

Sheltered Workshops Lead Nowhere

Segregated employment was initially conceived to provide people with disabilities opportunities for 

activity and productivity during the day. As social attitudes that required isolation for people with 

disabilities started to change, segregated employment‘s purpose shifted to one that could prepare 

individuals to be employed in a traditional job in the community. However, purpose and practice part 

ways as the reality for most individuals working in a sheltered workshop is not a transition point but 

rather a dead end. While sheltered workshops purport 

to offer pre-employment and pre-vocational skills, 

these programs most often only prepare people with 

disabilities for long term sheltered employment. 

It is a common practice for most new employees in 

traditional jobs to enter a probation period during 

which they receive on the job training. The probation 

period then ends. The same options should be 

encouraged for people with disabilities. Getting ready 

to go to work is not a lifetime activity and individuals 

should not have to train for ten or twenty years to get 

a job, especially when the work for which they are 

training has nothing to do with their interests, skills, or 

a potential job match. 

Since sheltered workshops are seriously limited by adequate quantities and types of paid work, there

are frequent periods of inactivity during which individuals are denied interactions with their peers who 

do not have disabilities. They spend their time in day wasting activities, often practicing assembly 

skills which will be taken apart by the line supervisor or their peers in order to keep everyone busy. 

Low challenge work such as sorting, collating, labeling, folding, mailing, sewing, subassembly, heat 

sealing, hand packaging or other similarly light assembly work comprise the bulk of services done for 

businesses on a contract basis. 74 Typically these skills are sometimes not even transferable to 

traditional work because most sheltered workshops do not have modern tools or machinery. So, in 

the end, they fail to prepare workers for traditional work—even traditional factory work—at all. 

 

74

 Alberto Migliore, et al. ―Why do adults with intellectual disabilities work in sheltered workshops?‖ 28 Journal of Vocational 

Rehabilitation 29, 6, 29-40.
P a g e | 33

People with disabilities are often fast tracked into segregated employment and do not have the 

benefit of individualized work assessments. Even though most individuals with disabilities in sheltered 

workshops favor employment outside of workshops,75 questions about where an individual would like 

to work, or what skills they can strengthen or develop are irrelevant. Choice is largely irrelevant. 

While individuals may experience the normal task requirements of work such as using a time clocks, 

working a fixed schedule, and being supervised, most provide bench work and do not promote self 

direction, self determination or skill development. Many times the very environments they are 

required to work in do not take into account their disabilities. Loud and dusty industrial settings are 

often the only option for people with sensory sensitivities or crowded and busy rooms are the settings 

for people with autism. An argument that service providers make to prove that an individual would 

not be successful in competitive employment is that their productivity is low in the sheltered 

workshop. Ironically, a person with a disability would receive more individualized accommodations in 

a competitive work environment because of the protections set forth in the ADA. 

Though it would be less resource intensive and more personally advantageous for people with 

disabilities to provide employment support in the community, funding for segregated employment 

continues to flow.

Even with the dramatic improvements in competitive employment, we continue to see that for every 

one person working in competitive employment, three people remain in segregated settings. Medicaid 

spending increased from nothing in 1997 to $108 million in 2002 for competitive employment while 

only slightly dropping from $514 million to $488 million for segregated day programs.76

Consequently, $1 was spent on supported employment compared to the $4 utilized for segregated 

day programs.77

Staff members‘ opinions about employment and the employability of people with disabilities 

strongly influences the future of segregated employees. For example, when a state VR agency 

conducts a required annual review of an individual who works in a sheltered workshop, the staff will 

often indicate that the individual needs to remain in the workshop as they are not yet ―job ready.‖

78

 

This bias is not surprising, given that, in order to continue to operate, workshops need to promote 

their existence.

 

75 Alberto Migliore, et al. ―Why do adults with intellectual disabilities work in sheltered workshops?‖ 28 Journal of Vocational 

Rehabilitation 29, 12.

76 Id at 29.

77 Id at 37.

78 34 C.F.R. § 361.55
P a g e | 34

Myth: 

People with Disabilities Cannot Fit into Traditional Work.

Fact: 

Workers with disabilities can be employed and be paid 

equally with the appropriate job development, training, 

work support, and assistive technology. However, the low 

expectations of service providers and families contribute 

to workers with disabilities being unaware of opportunities 

for employment in the general workforce. Supported 

employment (and customized employment) opportunities 

help place workers in a job that is a match for their skills 

and interests and better meets the needs of employers 

and workers. 

Success Story:

Nancy Ward is an Oklahoma resident who staffs the 

Medicaid Reference Desk funded by the Administration of 

Developmental Disabilities. She is an individual with a 

cognitive disability. Nancy previously worked in a 

sheltered workshop. After three years of employment, her 

supervisor at the workshop resigned but before leaving 

suggested to Nancy that she apply for the supervisory 

position. Despite performing the job functions on a daily 

basis, Nancy did not believe she was qualified to be 

supervisor because no one else at the workshop had ever 

indicated she could be considered for advancement. She 

was extremely reluctant to place the application, but 

finally, after much convincing by her peers and the plant 

manager, Nancy went to the main office to apply. 

However, the office personnel at the agency would not 

allow her to apply because she was ―a sheltered 

employee.‖ Imagine Nancy‘s surprise several weeks later 

when she was instructed to train her new supervisor. 

Angry, Nancy quit the sheltered workshop and found a job 

at a local nursing home where she was fully integrated 

into the workforce. 

Hear Nancy’s story in her own words:

www.youtube.com/watch?v=w8uKVH8WxCs.

Sheltered workshops, whether not-forprofit or for-profit, are still businesses 

that need the income generated from 

contracts and government sources. And 

like any other business there is an 

incentive to keep the best employees on 

the payroll. This practice perpetuates the 

stereotype that workers with disabilities 

cannot work in traditional settings 

because the best workers, the ones who 

would most likely succeed in competitive 

employment, rarely graduate from the 

workshop‘s ―training program.‖
P a g e | 35

Sheltered Workshops Profit Greatly from the Status Quo

The national policy toward integration of people with disabilities into every aspect of American life is 

thwarted by the actions of government agencies that provide funding which perpetuates 

segregated and sheltered work. According to a study by the GAO, sheltered workshops are largely 

funded as follows:79

 46% from State and County Agencies

 35% from Production Contracts

 9% from Retail Sales

 2% from Donations

 1% from Investment Income 

 7% from Other Sources

The sheer quantity of government funds subsidizing sheltered workshops illustrates the point that 

they are not self-sustaining.80 An eye-opening, 99% of sheltered workshops augment their meager 

contract income by providing ancillary services funded by government sources. Some government 

funding supports sheltered workshops directly, however, there are likely not enough sources to total 

the estimated 46% of workshop income. The ancillary services provided by workshops, such as daily 

living skills training, case management, housing, transportation, and job-related services, are all linked 

to funding.81 This bundling of habilitative services with workshop-based job-training supports the 

status quo service delivery model of segregated and sheltered employment.

This patchwork of funding is used by sheltered workshop managers to cover the operational costs of 

the facility. Some of the funding includes: 

 Medicaid. Medicaid has the most funding for the types of services provided by sheltered 

workshops. Funding is distributed through several vehicles that can often be used 

simultaneously, including:

 

79 GAO, Special Minimum Wage Programs: Centers offer Employment and Support Services to Workers With Disabilities, 

But Labor Should Improve Oversight,‖ GAO-01-886 (Sept. 2001),at 4, GAO-01-886, available at 

http://www.gao.gov/new.items/d01886.pdf

80 http://www.tacinc.org/downloads/Pubs/Medicaid-Final-July10.pdf

81 GAO, Special Minimum Wage Programs: Centers offer Employment and Support Services to Workers With Disabilities, 

But Labor Should Improve Oversight,‖ GAO-01-886 (Sept. 2001), at 4, GAO-01-886, available at 

http://www.gao.gov/new.items/d01886.pdf
P a g e | 36

o Home and Community-Based Services Waivers (HCBS): HCBS waivers fund community 

services which are defined by each state, therefore, its funding for employment services 

through Medicaid varies from state to state.82

o Medicaid Rehabilitation Option: This funds ―employment-related rehabilitation services 

to Medicaid eligible individuals in programs that provide both day habilitation and 

sheltered work.‖83

o Targeted Case Management: Typical activities reimbursed with these funds are loosely 

defined to include services like identifying service needs, creating a service plan, referrals 

to service providers, support, and monitoring.84

o Deficit Reduction Act (DRA): This established a new provision in the Social Security Act 

to fund home and community-based services to people with disabilities that do not 

have a HCBS waiver.85

 Vocational Rehabilitation. This funding is from the RSA. It is largely from Title I of the Rehab

Act. Money is provided to states for VR services. The services provided relate to eligible 

people with disabilities and must help them meet their employment goals.

 Social Services Block Grants. These Social Security formula funds are also known as Title XX 

Grants. Block Grants are given to states to provide community-based services for people with 

disabilities. Employment services are commonly paid for using these funds.

 Local Taxes. Many states also provide funding from their own coffers to support employment 

services for people with disabilities.

This patchwork of funding works together in the following manner: Under Medicaid, employment 

related services such as helping to build the skills needed to become or stay employed, are 

reimbursed through HCBS waivers or though the DRA, as long as these services differ from those 

funded under the Rehab Act.86 Most Medicaid funds must also be matched. Depending on the 

situation, Social Services Block Grants or local set-aside dollars can fulfill the matching requirement. 

Even without the patchwork, the federal Medicaid program heavily funds sheltered work. Ironically, 

funding largely comes from a program where Congressional intent was to enable individuals with 

disabilities to access services in community based instead of segregated settings. Known as the HCBS 

waiver, it permits funding for habilitation services defined as: services designed to assist individuals in 

 

82 PL 109-171. Section 6086, 1915c

83 42 CFR §440.130

84 PL 109-171. Section 6086, 1915g

85 PL 109-171. Section 6086, 1915i

86 Leveraging Medicaid: A Guide to Using Medicaid Financing in Supportive Housing. 

http://www.tacinc.org/downloads/Pubs/Medicaid-Final-July10.pdf
P a g e | 37

acquiring, retaining, and improving the self-help, socialization, and adaptive skills necessary to reside 

successfully in home and community based settings.87 Included in the category of habilitative service 

are pre-vocational services, educational and supported employment services.88 

CMS regulates the spending of Medicaid dollars. CMS has made strides in the past decade to adjust 

Medicaid long term care programs from traditionally institution-based programs to one that 

facilitates services in community based settings. For example, CMS published guidance stating that 

Medicaid should ―not [make funding] available for the provision of vocational services (e.g., sheltered 

work performed in a facility) where individuals are supervised producing in goods or performing 

services under contract to third parties.‖89 

While this sounds like progress, CMS recognizes a major loophole remains that keeps Medicaid 

money flowing into these segregated settings. Sheltered workshops skirt this prohibition by billing, 

not for vocational services but for pre-vocational services like skills-building activities aimed at 

preparing an individual for paid or unpaid 

employment, for example, building attention spans, 

and improving fine motor control.90 The hypocrisy is 

that these pre-vocational services can be provided 

for decades on end without CMS ever questioning 

why they have not lead to vocation. 

In other areas funded by Medicaid, CMS often 

requires the provider to develop an individual plan 

of services that will lead to a measurable outcome.91 

The plans are intended to be reviewed to see if the 

services need to be changed or adjusted to better 

achieve the goal.92 Unfortunately, CMS requires no 

such oversight for pre-vocational services provided 

in sheltered workshops. 

 

87 § 1915(c)(5)(A)

88 §1915(c)(5)(B)

89 CMS Instructions, Technical Guide and Review Criteria (January 2008) page 132

90 42 CFR 440.180(c) (2) 

91 See e.g., The Medicaid pre-admission screening and resident review program regulations in 42 C.F.R. § 483.440 (c)(1); 

and the Medicaid Intermediate Care Facilities for Individuals with Mental Retardation program - individual plan requirements 

at 42 CFR 440.150.

92 Id. at §483.440(f)(2)

Maine P&A Finds Better Option

Ten years ago, there were numerous sheltered 

workshops in every county in Maine and they were 

largely the only choice of employment for individuals with 

intellectual and cognitive disabilities. The P&A formed an 

alliance with Maine's statewide self-advocacy network, 

Speaking Up for Us (SUFU) and began 

discussions aimed toward forming a consensus opinion.

Though many self-advocates were concerned about 

losing their jobs, SUFU ultimately, after two years of 

internal discussions, made a decision that making $2 for 

a week's work or worse, owing money for the pizza party 

at the end of the week, was far worse than losing a few 

jobs. SUFU and the P&A together publicly denounced 

sheltered work. SUFU, the P&A, the DD Council and 

other partners successfully advocated for the State to

implement innovative employment programs.
P a g e | 38

In addition to CMS, RSA funds sheltered settings through two avenues. Although extended 

employment, a euphemism for sheltered workshops, has been eliminated as a final employment 

outcome, services provided by sheltered workshops continue to be a VR service as an interim step 

toward achieving integrated employment. For those choosing extended employment as a long term 

option, it remains available, but outside the VR program.93

RSA also supports comprehensive 

rehabilitation centers which serve as a 

focal point for VR funding within some 

communities for the development and 

delivery of services for persons with 

disabilities and others.94 Authorized under 

the Rehab Act, these facilities are large 

segregated compounds that provide a 

broad range of vocational rehabilitation, 

health, educational, social, and recreational 

services to persons with disabilities. 

Clearly the continuance of these facilities 

has not kept pace with community 

integration concepts. 

Michigan, Pennsylvania, Maryland, West 

Virginia, Virginia, Georgia, Tennessee, 

Arkansas, and Kentucky operate 

comprehensive rehabilitation centers 

funded with Title I VR dollars. In addition, 

South Carolina operates public community 

rehabilitation programs which are not 

multidisciplinary. In 2007, West Virginia 

closed its comprehensive rehabilitation 

center, allowing them to triple the amount 

of money spent on other services.95 

 

93 66 Fed. Reg. 7254

94 46 FR 5425, Jan. 19, 1981, as amended at 53 FR 17144, May 13, 1988

95 West Virginia Division of Rehabilitation Services, 2009 Annual Report. 

http://www.wvdrs.org/press/WVDRS_Annual_Report_2009.pdf)

Funding Breakdown for One Workshop

The Impact Federal Funding has on Sheltered Workshops

On August 19, 2010, the Evansville Courier & Press ran a 

story about how rules adopted by CMS in 2008 to implement 

changes in the Rehab Act were going to be enforced in 

Indiana, forcing a change in the amount of funding going to 

sheltered workshops. According to the article, these rules—

reducing payments from $4 per person per hour to $3.69—

would have devastating consequences for the Evansville 

ARC. Not only would the funding be decreased, but the 

number of staff covered to supervise the activities would be 

reduced as well. The total devastation: $50,000.

Devastating, that is, until you notice that their annual income is 

more than $11 million. According to their 2009 Annual Report, 

they received $6 million from business contracts, $3.8 million 

from government funds, $565,000 from child care fees, 

$279,000 from county taxes, and $800,000 from community 

support. Most interestingly, they lost $66,000 in value from 

their investments—though that was not mentioned in the 

article seeking community sympathy and support.

Sheltered workshops, like the one run by the Evansville ARC, 

clearly depend on federal, state and local dollars to maintain 

their outdated service system.

www.courierpress.com/news/2010/aug/19/new-rules-rock-arc/
P a g e | 39

Local funds can also be a significant source of income for sheltered workshops. In Missouri, for 

example, there is a special property tax that is assessed and collected specifically for services for 

people with developmental disabilities—including sheltered workshops—which correlates to an 

investment of $1.50 per hour per worker.96 The current rate for the property tax is 8.5¢ for each $100 

of assessed property value which generated approximately $16 million in fiscal year 2010.97 In 2009, 

the Missouri Department of Elementary and Secondary Education—the agency that provides technical 

assistance, guidance, and support to sheltered workshops—estimated that there are approximately 

7,500 workers with disabilities in sheltered workshops.98 This tax provides Missouri sheltered 

workshops with a significant and reliable revenue stream.

According to Indiana‘s HCBS99 and Social Services100 Waiver applications, the State will spend $17.9 

million on ―Facility Based Habilitation‖ in 2011—another euphemism for sheltered workshops. The 

portion of that funding dedicated to the Evansville ARC, or any other individual provider, was 

undeterminable from the information posted. There are 58 sheltered workshops paying below the 

minimum wage in that state. A recent University of Indiana study indicated that, in May 2009, people 

in sheltered workshops in Indiana earned an average of $1.59 per hour.101

Additionally, the FLSA maintains sheltered workshops. Most sheltered workshops take an advantage 

that few of their for-profit counterparts take—the subminimum wage allowance of the FLSA. In fact, 

according to the GAO, there are more than 4,700 non-profit workshops paying an average of 86 

workers each below the minimum wage while only 500 for-profit businesses pay an average of 3 

employees each below the minimum wage.

Through the FLSA, sheltered workshops may pay an hourly wage below the federal minimum. These 

commensurate wages are set based on productivity standards determined by workshop staff.102 The 

ability to pay workers below the minimum wage from the outset is based on an outdated reliance on 

―an absolute connection between pay and productivity‖ that carries through to today.103 

 

96 http://moworkshops.org/offer.html

97 http://www.plboard.com/infobase/default.asp

98 http://dese.mo.gov/divspeced/shelteredworkshops/

99 http://www.in.gov/fssa/files/DDW20100930.pdf

100 http://www.in.gov/fssa/files/SSW20100930.pdf

101 T. Grossi et al., Indiana Day and Employment Services Outcomes System Report (May 2009), at 2, available at 

http://www.iidc.indiana.edu/styles/iidc/defiles/CCLC/desos_5_09report.pdf.

102 http://www.dol.gov/whd/FOH/ch64/64btoc.htm

103 Michael Callahan, Employment for All TASH Connections Spring 2010 vol. 36, #2, page 1.
P a g e | 40

In His Own Words: 

“Pay Me Minimum Wage or I’m Leaving!” – John Anton‘s Story

When I got out of high school, I started working at local markets and then in food service. I realized that it 

wasn‘t for me. I wasn‘t challenged. I decided that I wanted to work with people with disabilities.

I started working at Career Resources which ran a sheltered workshop in Haverhill, Massachusetts,

hoping to get training for a job helping people with disabilities. There was hardly any work in the 

sheltered workshop. Most people sat around playing cards all day. When there was work to do, it was 

boring. They paid me $1.25 an hour to do piece work and then to be a janitor. Even though I wasn‘t doing 

piece work as a janitor, my pay stayed the same. When I told them I wanted to do more with my life and 

make more money, they let me work in the office, but still at the same pay. I wasn‘t doing what I really 

wanted to do though, to help other people with disabilities.

After being in the sheltered workshop for many years, I was tired of earning diddly-squat. I showed my 

paycheck to the head of the workshop and said, ―Is this how little money you can afford to pay me?‖ He 

responded that they didn‘t have enough money to pay more. I was never told that I was being paid so 

little because the law lets them, or showed how they even came up with my hourly rate.

So I got mad. I said, ―Pay me minimum wage, or I‘m leaving!‖ He said no. So, I walked out the door. He 

even chased after me trying to convince me to change my mind!

After that, I worked with my service coordinator at DDS to find a job doing what I loved—helping people 

with disabilities reach their potential. Now, I work at the State House as an intern and volunteer for 

Representative Tom Sannicandro. I research bills and advocate for people with disabilities. I got the 

name of the Department of Mental Retardation changed to the Department of Developmental Services 

and the ―R‖ word taken out of state laws.

My next plan is to help close the sheltered workshops and get people jobs out in the community.

John is an advocate and activist for disability rights in his home state of Massachusetts, and on Capitol 

Hill. He currently serves as a member of the Board of Directors of the Disability Law Center, and is the 

former head of Mass Advocates Standing Strong.
P a g e | 41

There is another way. Rather than making the 

absolute link to productivity, customized 

employment offers an alternative framework 

normally namely contribution. As discussed 

earlier in this report, customized and supported 

employment can work to help met the unmet 

needs of businesses.104

Medicaid does provide an option for supported 

employment which falls under the same HSBC 

waiver as pre-vocational services. Increasing 

funding for this program, which must be offered 

in integrated settings, would be much more in 

line with national policy. 

CMS did, through Section 203 of the Ticket to Work and Work Incentives Improvement Act of 1999, 

make it easier for states to fund supported employment allocates, by offering Medicaid Infrastructure 

Grants. As of 2008, at least 41 states had received these federal grants. 

Unfortunately, as government agencies face tight budgets, supported employment has been a target 

for cuts because an individual‘s supported employment budget is clearly delineated. On the other 

hand, it is not so easy for an official to determine the cost savings from reducing an individual‘s prevocational services as these services are bundled as pre-vocational income in a complicated formula 

with other workshop income. 

Market Solutions Sheltered Workshops Should Adopt 

While the disability rights community tends to think of itself as experts, it could learn a lot from some 

traditional businesses. Business leaders would also have a lot to teach executives and staff of 

segregated and sheltered workshops.

Walgreens has a lot to teach disability service providers, in fact.

 

104 Michael Callahan, Employment for All TASH Connections Spring 2010 vol. 36, #2, page 2

More from Mike Montgomery

In the 1970‘s, the sheltered workshops in Mississippi were 

run by annually renewable grants. In the 1990‘s, the funding 

was converted to a purchase of service arrangement for X 

dollars per unit of service. People who ran the programs 

were not motivated to change. They liked the way that the 

billing flowed and the families were happy to have their 

children in a safe place and were not pushing for change. 

There are more than 1,800 people on our waiver waiting list 

in MS alone. Many could come off the waiting list if we 

switched the way we use our resources.
P a g e | 42

Central to Walgreens‘ diversity initiative is a policy of integration. All of Walgreens‘ employees with 

disabilities—from the factory to management—work side by side with their colleagues without 

disabilities. And, they do it for the same pay.105

Walgreens has not had to compromise quality or efficiency either. According to their Senior Vice 

President of Distribution and Logistics, Randy Lewis, Walgreens gained efficiency by having a 

workforce that is comprised of 40% people with disabilities. In fact, all workers with the same jobs 

have the same productivity standards. What‘s more, the adaptations they have made to the factory to 

make it more assessable, have benefitted all their workers, not just the workers with disabilities.106

This information is right in line with recent survey of employers about worker accommodations. The 

survey results indicated that 71% of accommodations cost $500 or less with 20% costing nothing.107

Considering the small investment, there is a great potential for wide-ranging benefits that can be 

reaped by making workplaces more accessible.

Even though advances in technology—and thinking—have created new opportunities for people with 

disabilities to find meaningful work in the communities where they live, many are still shuttled into 

sheltered workshops, where they languish for years. The sheltered workshops of today do not look 

like the sleek and state-of-the-art facilities run by their counterparts—like Walgreens—in the business 

world. Their equipment is often old and out of date, and the facilities themselves show that few, if 

any, capital expenditures for improvement were made. A study of workshops in Missouri found that 

collectively, rather than mimicking traditional factories, they mimic each other both in form and 

function—they teach the same skills in the same settings.108

When questioned, workshop executives often state that the type of work done and the workshop 

setting itself reflected the preferences expressed by workers and their families. This level of attention 

to the needs and desires of the workers with disabilities they employ does not appear to translate to 

individualized planning and training.109 For the workers, sheltered workshops offer little training and 

even less diversity. They simply do ―the same work, day after day, rather than the variety of work and 

the experience of learning that comes from being trained in and doing a changing array of jobs.‖110

 

105 ―Walgreens program puts the  ̳able‘ in disabled‖ http://www.msnbc.msn.com/id/19417759/from/ET/

106 ―Walgreens program puts the  ̳able‘ in disabled‖ http://www.msnbc.msn.com/id/19417759/from/ET/

107 http://askjan.org/media/LowCostHighImpact.doc

108 http://www.iarstl.org/papers/ShelteredWorkshops.pdf

109 http://www.iarstl.org/papers/ShelteredWorkshops.pdf

110 http://www.iarstl.org/papers/ShelteredWorkshops.pdf
P a g e | 43

The same study found that workshop executives themselves do not have the marketing skills, or 

business plans in place to run an effective workshop. With of a lack of planning and marketing, 

workshops do not have enough contract work to keep their doors open and employees working at or 

near full-time levels.111 Rather than competition and the drive to achieve motivating work flow, 

income generated by federal and state service systems place disincentives on the workshop to obtain 

contract work, unlike their for-profit business counterparts. 

The current reality of a seemingly endless supply of state and federal funds going to segregated and 

sheltered work only supports the status quo for people with disabilities. Changing this system will 

require a stronger hand by the federal and state authorities to fulfill the mandates of our national 

policy of integration.

 

111 http://www.iarstl.org/papers/ShelteredWorkshops.pdf

Case Study: 

Walgreens: Breaking the Cycle

At least one major employer realizes the potential of hiring people with disabilities in integrated competitive employment with 

the expectation that these employees adhere to company performance standards. Walgreens actively hires people with 

disabilities at two distribution centers located in South Carolina and Connecticut. In June 2007, the company opened a new 

state of the art distribution center in Anderson, SC. The facility was designed to be accessible to people with a wide range of 

disabilities in competitive employment.

Walgreens pays employees the same wages regardless of their disability and expects all employees to adhere to the same 

performance standards. To achieve this goal, Walgreens designed adjustable workstations, clear icon-driven touch screen 

computers and created signs with pictures to allow people with physical, cognitive, intellectual and mental disabilities to 

perform various jobs. Training programs consider the disabilities of employees. For example, management and supervisory 

techniques were developed specifically considering employees with autism, Asperger syndrome, and other cognitive 

disabilities. Employment at the distribution center was the first real job for many of the Walgreens employees with disabilities.

Walgreens has also made a commitment to helping other companies build on its successes. Walgreen's demonstrates its 

programs and processes to other retailers in an effort to help others move in a similar direction. Walgreens will offer tours of 

its facilities along with mentoring, training and guidance. Walgreens also offers students an opportunity to spend one week 

learning from employees with disabilities about what makes their job work for them in the hopes that the students take this 

information with them when they graduate.

For more information go to http://www.walgreens.com/topic/sr/disability_inclusion_home.jsp
P a g e | 44

A Way Forward

It is clear that segregated and sheltered work, as well as sub-minimum wages for people with disabilities must end. 

And in order for that to happen, systemic—and systematic—change must occur. Fortunately, a movement toward 

change is under way in states across the country. One effort, Employment First, seeks to have individual states 

adopt policies that focus on integrated, community-based employment at or above minimum wage as the first

spending option for state and federal dollars. 

Other efforts include the promotion of supported employment and customized employment programs that focus on 

creating or locating jobs in the community that match the personal employment goals of the person with a disability. 

These approaches have a high incidence of success because they are personalized, integrated, and pay a 

prevailing wage.

There are also efforts undertaken by states themselves to increase employment opportunities for people with 

disabilities. Here are just a few examples:

 Washington: In 1997, the Washington state legislature created a supported employment program 

targeting people with developmental or significant disabilities who are eligible for vocational 

rehabilitation services and need training and support to perform successfully. These positions do not 

count against their allotted full-time employee positions for the entire time the individual is employed by 

the agency. [1] In 2007, the Division of Developmental Services issued a policy establishing supported 

employment as the primary use of employment or day program funds resulting in a 58% employment 

rate for people with developmental disabilities.

 Oregon: The Youth Transition Program is a year-round comprehensive transition program for youth with 

disabilities that prepares them for employment or career related post secondary education or training.

It is operated collaboratively by the office of Oregon Office of Vocational Rehabilitation Services, the 

Oregon Department of Education, the University of Oregon, and local school districts. It operates in 

approximately 120 high schools and is funded through a combination of state and local funds from 

participating education and rehabilitation agencies. 

 Kentucky: The Community Based Work Transition Program serves students with disabilities during their 

last two years of high school explore potential careers, get work experience, stay employed, and 

advance at work. The CBWTP is a cooperative effort between participating local school districts, the 

Kentucky Department of Education, Office of Vocational Rehabilitation, the Kentucky Department for 

the Blind, and the Human Development Institute at the University of Kentucky. 

 Georgia: Georgia has created a cross-disability network of ―employment stewards‖- both individuals and 

organizations- working across the state to develop demonstrations of high quality customized 

employment and to assist individuals with disabilities to start their own businesses and microenterprises. 

While these examples indicate progress has been made, there is still quite a long way to go until our national policy 

of integration is realized. Currently there are only 12 states that have made the Employment First commitment. 

Supported and customized employment programs, while enormously successful, do not receive the level of funding 

or attention that segregated and sheltered work does. It is the hope of NDRN, and thousands of advocates and 

activists, that this soon will change. 
P a g e | 45

Policy Recommendations

In 1990, the ADA was passed to end the segregation and other types of discrimination, including in 

employment, against individuals with disabilities that was a serious and pervasive social problem. 

The ADA integration mandate as expressed in the Olmstead decision and other federal laws have 

also recognized the importance of integration over segregation. Yet, there are still far too many 

situations in which our nation‘s goal of integration for people with disabilities has not been realized. 

In addition to being segregated in their employment environment, many people with disabilities 

also face employment discrimination in the wages they can earn—an act of outright discrimination 

that is sanctioned by the current law—leading to situations where some people with disabilities are 

earning pennies an hour for their labor while their colleagues without disabilities earn a prevailing 

wage doing the same job.

In 2011, it should not be permissible to pay what can be considered exploitive wages based on a 

person‘s status of having a disability. It should also not be permissible to segregate people with 

disabilities at work—or home. NDRN believes that the sub-minimum wage and segregated 

employment environments violate the spirit of the ADA, the Olmstead decision, and the national 

policy of inclusion—and they must come to an end. 

As society progresses, archaic policies must be abandoned, and replaced with forward thinking 

ones. We, as a nation, must move forward and realize the promise of the laws already passed that 

recognize and protect the civil rights of people with disabilities. We must work together to end 

segregated and sheltered employment. We must end sub-minimum wage. 

However, just seeking to end those practices addresses only part of the problem. At the same time 

we seek to end these archaic policies, we need to focus our efforts on ensuring the availability of 

integrated employment options that include support, services, and equal pay. To achieve these 

goals, NDRN makes the following broad public policy recommendations.
P a g e | 46

End Segregated Employment & Sub-minimum Wage

for People with Disabilities

Congress

 Restrict all federal money, including Medicaid and Vocational Rehabilitation (VR) funds, from 

being spent in a segregated or sub-minimum wage employment environment. 

 Stop issuing 14(c) certificates that pay sub-minimum wage to individuals with disabilities.

 Forbid in all relevant federal statutes or regulations moving youth or young adults from the 

classroom to a segregated or sub-minimum wage employment environment.

 Modify federal contract preferences so that they cannot be used by employers who utilize 

segregated employment environments or where an employee is paid a sub-minimum wage.

States

 Forbid the use of any state funding from being expended in a segregated or sub-minimum

wage work environment.

 Modify state contract preferences so that they cannot be used by employers who utilize 

segregated employment environments or where an employee is paid a sub-minimum wage.

Promote & Facilitate Integrated and Comparable Wage 

Employment Alternatives

Congress

 Strengthen existing, and create new, incentives through the federal tax code to employ 

individuals with disabilities in integrated employment environments paying comparable wages.

 Improve and enhance workforce programs such as apprenticeships and on the job training to 

require greater participation by individuals with disabilities.

 Increase federal funding for person-centered planning for employment and employment 

supports for supported employment, customized employment, and self-employment. 

 Mandate under the IDEA that transition plans include social skills training components and work 

preparation, such as placements outside of school in apprenticeship or internship programs.

 Create as part of the reauthorization of the Rehabilitation Act or IDEA a transition coordinator 

position that will have overall responsibility to coordinate across the education, employment, 

and disability systems and programs that provide transition services. The number of transition 

coordinators located at each high school shall be based on the number of students needing 

transition services at that high school.
P a g e | 47

 Require state vocational rehabilitation agencies to visit employers employing individuals with 

disabilities under a sub-minimum wage certificate or which maintain segregated employment 

environments at least once a year to inform individuals with disabilities of competitive 

employment opportunities and to assess the vocational rehabilitation needs of those individuals.

 Mandate that supported employment services be funded under the Rehabilitation Act for at 

least 36 months.

 Require Medicaid to fund services (employment supports, assistive technology, etc.) that will 

allow individuals with disabilities in segregated or sub-minimum wage employment 

environments to move to integrated and comparable wage employment.

 Amend Title I of the Rehabilitation Act to require state vocational rehabilitation agencies to 

review and assess at least once a year the capabilities of individuals referred to train or work in 

sheltered employment (―extended employment‖) by the vocational rehabilitation agency.

Department of Education

 Establish new performance indicators by which the performance of state vocational 

rehabilitation services agencies will be evaluated. The new performance indicators need to 

include consideration of 1) the number of individuals with disabilities whom the vocational 

rehabilitation agency assisted to move from non-competitive and/or segregated employment 

or training environments to competitive and/or integrated employment environments, 2) the 

number of Individual Education Plan (IEP) transition meetings staff from the vocational 

rehabilitation agency attended to discuss the transition of a student with a disability from 

secondary education to the vocational rehabilitation agency or to competitive employment, 

and 3) the number of students with disabilities (eligible for IDEA or covered by Section 504) 

the vocational rehabilitation agency began to serve before the individual exited the 

secondary education system.

 Ensure that both RSA and OSEP utilize their monitoring authority under the Rehabilitation Act 

and IDEA and issue joint policy memoranda to ensure compliance with requirements for 

coordination and collaboration between the VR and special education systems for transition 

age youth and young adults in each State.

 Ensure that there are appropriate vocational preparation programs available to prepare 

students with disabilities for competitive employment. This includes ensuring that vocational 

preparation programs for general education students comply with the IDEA and Section 504 

and with student IEPs and 504 plans in admitting students with disabilities and appropriately 

meeting their needs. Modified vocational preparation programs that will prepare students 

with disabilities for competitive employment must also be made available for students who 
P a g e | 48

cannot benefit from the general vocational preparation program even with appropriate 

supplemental aids and services.

 Fund longitudinal studies that contain outcome data collected at several intervals after 

students with disabilities exit high school. The data needs to include at a minimum such 

variables as employment environment (segregated v. integrated), whether the student‘s 

employer holds a sub-minimum wage certificate, the number of hours employed, pay rate, 

and occupation. 

 Provide funding to the Protection and Advocacy (P&A) Systems and the Client Assistance 

Programs (CAP) focused on transition and employment to provide advocacy for individuals 

with disabilities to work in integrated employment environments at comparable wages.

Department of Health and Human Services

 Issue guidance that, for those individual‘s receiving Medicaid funded pre-vocational services in 

a segregated employment environment, an annual two level assessment shall be conducted. 

Level one shall determine if the individual‘s current menu of pre-vocational supports could 

otherwise be provided in a more integrated setting; and level two, if pre-vocational services 

can only continue in a sheltered setting, what adjustments need to be made to their current 

services, to better reach the goal of ―habilitation services‖ which is to ―Obtain the adaptive skills 

necessary to reside successfully in home and community based settings.‖ 

Department of Labor

 Create and disseminate information to assist providers and businesses in developing best 

practices for competitive employment consistent with the person‘s interests and skills.

 Work with the Office of Personnel Management to encourage the employment of individuals 

with disabilities in integrated employment environments at comparable wages in the federal 

government, including by allowing the agency to not count the employee against the agency‘s 

allotted full-time employees.

States

 Increase state funding for person-centered planning for employment, and employment 

supports for supported employment, customized employment, and self-employment.

 Enact and implement state policies to encourage the employment of individuals with 

disabilities in integrated employment environments at comparable wages in state 

government positions.

 Strengthen existing and create new incentives through the state tax code to employ individuals 

with disabilities in integrated employment environments at comparable wages.
P a g e | 49

 Use Medicaid funds for Employment First initiatives to help individuals with disabilities find 

work in integrated employment environments at comparable wages. 

 Fund short-term workforce programs, such as apprenticeships and internships, for individuals 

with disabilities.

Increase Labor Protections & Enforcement

Congress

 Increase funding, and ensure access, for Protection and Advocacy Systems and the Client 

Assistance Programs to monitor and investigate violations and abuses in segregated and subminimum wage employment environments.

 Increase funding for the Wage and Hour Division to boost enforcement and oversight of wage 

and hour laws, including the Section 14(c) program.

 Increase penalties for violations of the Section 14(c) program to ensure that employers take 

their responsibilities seriously.

Department of Labor

 Provide funding to the Protection and Advocacy Systems and the Client Assistance Programs 

focused on monitoring and investigating violations and abuses of sub-minimum wage and 

integrated employment environment requirements.

 Issue guidance on how to formalize and standardize employee evaluations under a subminimum wage certificate, including how to calculate productivity and other factors to 

determine an individual‘s wages.

 Require segregated, sheltered, and sub-minimum wage paying employers to report to the 

Department of Labor yearly the wages, progress, attempts to move to integrated employment 

environments, and reasons why the individual hasn‘t moved to integrated employment for 

each employee.

 Require sub-minimum wage certificate employee evaluations be performed by an independent 

third party evaluator. 

 Place critical information about the sub-minimum wage (14(c)) certificate program on the 

Department of Labor‘s website, and ensure it is presented with clarity. Data should be 

prominently displayed, easily accessible, and include the percentage of employees operating 

under the certificate, the productivity level of these individuals, salaries of all chief executive 

officers and management personnel, and the dates for which certificate renewal is required.
P a g e | 50

 Increase enforcement of federal employment laws and requirements of federal contract work 

by tasking the Office of Disability Employment Policy (ODEP), the Wage and Hour Division and 

the Office of Federal Contract Compliance to collaborate and work together.

Department of Justice

 Enforce the integration requirements of Title II of the Americans with Disabilities Act against 

states that fund segregated and sheltered employment more than integrated employment. 

Equal Employment Opportunity Commission

 Enforce the non-discrimination requirements of the Americans with Disabilities Act against 

segregated and sheltered employers by forbidding unnecessary segregation.
P a g e | 51

Conclusion

Many people working in support of segregated and sheltered work don‘t think there is another way. 

In fact, there is. Thirty years ago no one believed there was another option for people with 

disabilities but to live in large, state-run institutions. The belief was they could never care for 

themselves; they were too vulnerable or made people too uncomfortable to live among people

without disabilities. But soon we saw these human warehouses for what they were and in state after 

state institutions closed, and now millions of people with disabilities are living, successfully, in their 

communities. They evolved and adapted and showed us they are more than we believed, as did the 

rest of the country who recognized the value of having friends and neighbors with disabilities. We 

witnessed lives changing.

The same can happen in the workplace. Sheltered workshops are just another institution segregating 

our neighbors away because of our unwillingness to accept that our own preconceived ideas about 

the workplace might be wrong. It‘s time to do things differently.
P a g e | 52

Appendices

Appendix A

Michael Montgomery

Former Director, Singing River Industries

In March of 1973, I took the job as director of a work activity center which was a part of the services 

offered through the local mental health center in Pascagoula, Mississippi. At that time, most Mental 

Health Centers provided services for people with mental health concerns and people with 

developmental disabilities. Nearly all had sheltered workshops which were innovative at that time. I, 

like many directors at the time, had a background in education. I didn‘t feel comfortable running a 

workshop as I did not have the proper educational background or experience. Training provided 

through the Developmental Disabilities Training Institute in Durham, North Carolina, helped me and 

others get the training that we needed through a series of five day workshops. It also connected 

people from various states and offered an opportunity for collaboration. 

Our agency was called the Jackson County Training Center. We often received calls from people who 

wanted to know what kind of training we did. When I arrived, some people with disabilities were 

doing arts and crafts, but most people were sitting around in a big semi-circle watching the staff do 

the work. My initial focus was to change from watching staff doing work to getting the people in the 

workshop to do the work themselves. Over a period of time, I became successful at acquiring 

contracts for the workshop. We made surveyor stakes for the state highway department and 

sandblasted rust and old paint from boat trailers, yard furniture, and other metal objects which were 

prone to rust in our gulf coast climate. Several of our clients (the term widely used at that time) also 

learned how to apply primer to those surfaces with a spray gun. 

In 1976, I was introduced to the work of Dr. Marc Gold. Marc helped me understand that we could 

teach really sophisticated skills by using systematic instruction. I began to see that we should not be 

only providing segregated activities. Rather than keeping people in the workshops, we needed to get 

people out of sheltered workshops into jobs in the community. I was open to what Marc had to say 

because I could see, even in 1974 and 1975, that there would be an endless line of people coming to 

us from voc rehab and the schools. It was my impression at the time, that VR referred about 90% of 

the people with disabilities that came to them to sheltered workshops. VR would verify them as 

unemployable, refer them to workshops for work activity, and we would be the end of the line for 

them. VR‘s traditional testing and evaluation procedures did not support the notion that those 
P a g e | 53

individuals could perform real work. I was also open because I could see that we could train people 

to do what others were doing in the community, but they would never get the opportunity without 

some assistance.

After meeting and working with Marc, we secured funding through United Way to hire someone to 

slowly move people from the workshop into community jobs. We found that people could work, if 

someone was willing to negotiate on behalf of people with disabilities and work with the employers 

to accommodate individual disabilities. If we trained correctly, and not tested, we could find the right 

match for people‘s abilities. We were very successful in getting people out of the workshop and into 

employment in the community. 

We had a subcontract with Macmillan Bloedel to make cedar boards for privacy fencing. The plant 

manager was Joel Donovan. Rather than building the fences in our workshop and paying for 

materials to be moved back and forth, our crew went to his location. Our people liked working with 

the other workers, liked being seen and respected. On days when there was no work, the individuals 

on that subcontract would come back to shop until their services were needed again. On those days, 

some of them would stay home or come under pressure from their families. They clearly didn‘t want 

to come back. They had graduated from the workshop. I understood and respected their position.

We got people jobs in hospitals, restaurants, and other businesses around the community. One of the 

people that we trained in the late 1970s worked in a local hospital until his recent retirement. TS 

came to us straight from an institution, where he had lived from early childhood until his 20‘s. Like so 

many people at that time, he never should have been at the institution. TS ran our sandblaster, drove 

our forklift; it was clear that he could do more. His job started in the hospital laundry, but he moved 

all around the hospital. He was a good worker. We made ourselves available to the hospital 

administration; if they had a problem with TS‘s skills, they could call us, and we would provide 

additional training. Over the years, the hospital did call us a few times, and we were able to provide 

the training that was needed. TS was absorbed into the fabric of the community. After he got the 

job, TS got his own apartment and started dating a woman that he met in the workshop. He didn‘t 

have a driver license, but he used his bicycle to get around. 

Our ideas sometimes scared families. They had been told by doctors and service systems that their 

kids needed to be in a sheltered and safe environment. Although some of the parents of children in 

the workshop began to realize that their son or daughter could do good work, it was the switching of 

environments that was troubling. One of our parents who at the time was very concerned that his son 

stay in the safe environment of the workshop, recently told me that his son was working in a 
P a g e | 54

restaurant where he was very happy. He could now see the benefits of working in the community. 

His son enjoyed being viewed as a regular employee, but for fewer than 40 hours. Families need 

assurance that their children will have a meaningful job and not spend part of their time at home 

alone. The Community Calendar developed by Marc Gold and Associates is a tool that we used to 

develop a life in the community around work and non-work time. 

In the 1970‘s, the sheltered workshops in Mississippi were run by annually renewable grants. In the 

1990‘s, the funding was converted to a purchase of service arrangement for X dollars per unit of 

service. People who ran the programs were not motivated to change. They liked the way that the 

billing flowed and the families were happy to have their children in a safe place and were not 

pushing for change. Folks believed then, and I think that many still do, that people need to be 

sheltered. They just don‘t believe that people can grow with the right training and support, that they 

can have a good life. I believed that we owed it to each individual and family to try new ideas and 

work diligently for each person regardless of disability. If we failed to put our heart and soul into the 

challenge for everyone, we would never see their potential. Everyone that I have ever worked with 

truly wants a life with work, a place to live, friends, and social outings. A job provides the money to 

secure everything else.

There are more than 1,800 people on our waiver waiting list in Mississippi alone. Many could 

come off the waiting list if we switched the way we use our resources. It saddens me that it is 

taking so long for this switch to occur, but I do now our state leaders move toward the change 

through a re-balancing initiative. 

Michael Montgomery is the former Director of Singing River Industries, a sheltered 

workshop in Mississippi. He is currently a member of the Board of Directors of

Disability Rights Mississippi. 
P a g e | 55

Appendix B

Certified Agencies Paying Sub-minimum

Wages

Private, Not for Profit 2,414

Public (State or Local Government) 595

Private, For Profit 413

Other 16

Total Certified: 3,438

Data by Congressional Research Service from Wage 

and Hour Division of the U.S. Department of Labor. 

As of January 5, 2010 
P a g e | 56

Appendix C

Section 14(c) Certificates112 and Sheltered Workshops113 by State

State

Total 

Served

%

% 

CommunityBased Non 

work

%

Total Section 

14(c) 

Certificates

Integrated 

Employment

Combined 

FacilityBased 

Settings

AK 1,394 24% 54.5% 8

AL 5,269 5% 0% 95% 56

AR 65

AZ 41

CA 78,250 11% 74% 15% 238

CO 5,731 27% 59% 62% 42

CT 8,433 56% 44% 9% 70

DC 1,449 7% 10% 78% 1

DE 1,546 26% 1% 68% 6

FL 18,692 23% 27% 58% 102

GA 98

HI 2,865 4% 98% 56% 8

IA 82

ID 6,980 5% 30% 58% 14

IL 25,500 10% 0% 94% 180

IN 12,491 25% 12.5% 62% 63

KS 5,991 19% 54% 80% 60

KY 7,975 17% 29% 54% 55

LA 4,139 34% 2% 64% 95

MA 14,038 22% 12% 65% 88

MD 9,768 38% 0% 62% 48

ME 4,133 19% 77% 0% 21

MI 81

MN 149

MO 4,030 9% 2% 94% 120

 

112 Data retrieved by Congressional Research Service from Wage and Hour Division of the U.S. Department of Labor, 

Current as of January 5, 2010

113 Institute for Community Inclusion, StateData: The National Report on Employment Services and Outcomes (2008).
P a g e | 57

State

Total 

Served

% % 

CommunityBased Non 

work

%

Total Section 

14(c) 

Certificates

Integrated 

Employment

Combined 

FacilityBased 

Settings

MS 5,904 7% 70.5% 40% 28

MT 32

NC 100

ND 1,782 22

NE 3,668 33% 0% 77% 39

NH 2,159 45% 49% 5% 10

NJ 9,081 15% 5% 80% 74

NM 3,056 32% 31% 65% 8

NV 1,919 20% 2.5% 77% 15

NY 55,420 15% 67% 32% 153

OH 32,133 23% 4% 66% 163

OK 4,168 61% 30.5% 53% 78

OR 3,834 5% 10.5% 67% 68

PA 139

RI 12

SC 7,549 30% 0% 83% 80

SD 2,307 24% 24% 100% 34

TN 7,770 22% 79

TX 40,038 9% 28% 46.5% 165

UT 2,670 33% 72% 0% 42

VA 11,259 21% 2.5% 79% 67

VT 2,252 39% 61% 0% 2

WA 7,183 57% 4% 11% 58

WI 10,338 33% 143

WV 21

WY 1,216 20% 15% 65% 12

430,247 24% 27% 58% 3,435
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National Disability Rights Network

900 2nd Street NE, Suite 211

Washington DC 20002

Phone: (202) 408-9514

Fax: (202) 408-9520 

www.NDRN.org

National Disability Rights Network

900 2nd Street NE, Suite 211

Washington DC 20002

Phone: (202) 408-9514

Fax: (202) 408-9520 

www.NDRN.org