GAO-01-471R Suggestions for Changes to Form WH-226

United States General Accounting Office

Washington, DC 20548

April 6, 2001

Mr. Michael F. Ginley

Director, Office of Enforcement Policy

Wage and Hour Division

U.S. Department of Labor

Subject: Suggested Changes to Form WH-226, “Application for Authority to Employ

Workers With Disabilities at Special Minimum Wages”

Dear Mr. Ginley:

We are currently reviewing the Department of Labor’s administration of the

provisions of section 14(c) of the Fair Labor Standards Act (FLSA). These provisions

allow individuals with disabilities to be paid at special minimum wage rates that are

lower than the federal minimum wage, under certain circumstances. As part of this

review, we have examined form WH-226, “Application for Authority to Employ

Workers with Disabilities at Special Minimum Wages,” as well as a draft revision that

we received from the Wage and Hour Division. (The enclosure to this

correspondence contains a copy of the draft.)

The changes are intended to help ensure that the form provides Labor with accurate

data on employers and workers covered under the provisions of section 14(c) of

FLSA.

Data Collected on Employers

Labor may not be collecting accurate information on the number of employers

because information in one of the items on the form is incomplete and may be

confusing to employers. Specifically, item 6 on the revised form does not ask

employers to list their primary place of business and, as written, implies that work

centers are required to obtain a separate 14(c) certificate for their clients who are

employed by others at supported employment sites.1

Employers are required to obtain 14(c) certificates for their primary place of business

and any branch locations at which workers are paid special minimum wages.

 1

Supported employment sites are work sites operated by regular businesses for which support

services, such as job coaches, are provided for workers with disabilities. Some work centers help

place their clients at these sites and provide the support services.
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Employers are not required to obtain separate 14(c) certificates for workers placed at

supported employment sites.2

Item 6 of the draft form asks employers to list the names and addresses of all of their

branch establishments and supported employment sites and the number of workers

employed at these locations. Item 6 does not, however, ask employers to list their

primary place of business or the number of workers employed at that location. This

may be confusing to employers. Labor is more likely to obtain accurate information

on the number of employers and the branch locations for which separate 14(c)

certificates are required if employers were asked to list in item 6 only the names and

addresses of the locations for which they are required to obtain 14(c) certificates.

Data Collected on the Number of Workers

Labor may not be collecting accurate information on the number of workers with

disabilities employed under the provisions of section 14(c) because the time periods

specified in two of the items on the form are inconsistent and the instructions may be

confusing to employers.

In item 6 on the draft form, employers are asked to list the number of workers at each

of their branch locations and supported employment sites, but they are not required

to list the number of workers at their primary place of business. Employers are

asked to provide this information for all workers they expect to employ (no time

period specified) if it is a new application, or for workers employed at one point in

time (“during your most recently completed representative fiscal quarter”) if it is an

application for renewal. In item 8, however, Labor requests information on the total

number of workers paid special minimum wages at all locations during the most

recently completed fiscal year.

To improve the clarity and consistency of the information collected on the number of

workers employed under the provisions of section 14(c), Labor could eliminate item 8

and rely on item 6 to obtain information on all workers paid special minimum wages.

In addition, Labor could ask employers to list the number of workers paid special

minimum wages at each of the locations for which they are required to obtain 14(c)

certificates at one specific point in time. For example, the item could read

“Enter the number of workers with a disability who, at any time during

[some specified time period], were paid special minimum wages for

work at your primary place of business and at each of your branch

locations.”

The employer could then be asked to total these numbers to make it clear that

Labor intended them to report the total number of workers paid special

 2

If workers placed at supported employment sites are employees of the work center, they are covered

under the work center’s primary 14(c) certificate. If the workers are employees of the business that

provides the supported employment site, the business, rather than the work center, must obtain a

14(c) certificate in order to pay these workers special minimum wages.
Page 3 GAO-01-471R Suggestions for Changes to Form WH-226

minimum wages at all locations for which they are required to obtain section

14(c) certificates.

Employers submitting new applications could be asked to list in item 6 all of their

locations and the number of workers they intended to employ at each location under

the provisions of section 14(c). The actual number of workers employed would be

obtained from the employers’ subsequent applications for renewal.

If you have any questions regarding this report, please contact me at (202) 512-7215

or Revae Moran at (202) 512-3863.

Sincerely yours,

Sigurd R. Nilsen

Director, Education, Workforce, and

 Income Security Issues

Enclosure
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Enclosure Enclosure

(130041)