I 113th CONGRESS 1st Session H. R. 831 IN THE HOUSE OF REPRESENTATIVES February 26, 2013 Mr. Harper (for himself, Mr. Alexander , Mr. Bishop of Georgia , Mr. Conyers , Mr. Ellison , Mr. Hastings of Florida , Ms. Moore , Ms. Norton , Mr. Rush , Mr. Tonko , Mr. Young of Alaska , and Mr. Clyburn ) introduced the following bill; which was referred to the Committee on Education and the Workforce A BILL To phase out special wage certificates under the Fair Labor Standards Act of 1938 under which individuals with disabilities may be employed at subminimum wage rates.

1. Short title This Act may be cited as the Fair Wages for Workers with Disabilities Act of 2013 . 2. Findings Congress finds the following: (1) Current Federal law allows the Secretary of Labor to grant special wage certificates to entities that provide employment to workers with disabilities, allowing such entities to pay their disabled workers at rates that are lower than the Federal minimum wage. (2) The practice of paying workers with disabilities less than the Federal minimum wage dates back to the 1930s, when there were virtually no employment opportunities for disabled workers in the mainstream workforce. (3) Today, advancements in vocational rehabilitation, technology, and training provide disabled workers with greater opportunities than in the past, and the number of such workers in the national workforce has dramatically increased. (4) Employees with disabilities, when provided the proper rehabilitation services, training, and tools, can be as productive as nondisabled employees. Even those individuals that are considered most severely disabled have been able to successfully obtain employment earning minimum wage or higher. (5) While some employers possessing special wage certificates claim to provide rehabilitation and training to disabled workers to prepare them for competitive employment, the fact that such employers can pay their workers less than the Federal minimum wage gives them an incentive to exploit the cheap labor provided by their disabled workers rather than to prepare those workers for integrated employment in the mainstream economy. (6) Many employers with a history of paying subminimum wages benefit from philanthropic donations and preferred status when bidding on Federal contracts. Yet they claim that paying minimum wage to their employees with disabilities would result in lack of profitability and forced reduction of their workforces. (7) Other employers, recognizing that the payment of subminimum wages is in fact exploitation of disabled workers, are now paying the Federal minimum wage, or higher, to their employees with disabilities without reducing their workforces, while still maintaining their profitability. For example, National Industries for the Blind (NIB) agencies exploited their blind employees for years through the payment of subminimum wages, claiming they could not maintain profitability otherwise. Now, All NIB associated agencies are committed to the NIB Board policy to pay employees, whose only disability is blindness, at or above the Federal minimum wage or their state minimum wage, whichever is highest. (8) The Wage and Hour Division of the Department of Labor is charged with the responsibility for oversight of these special wage certificates. The results from thorough investigations conducted by the Government Accountability Office— Stronger Federal Efforts Needed for Providing Employment Opportunities and Enforcing Labor Standards in Sheltered Workshops, Report to the Congress, Comptroller General of the United States (HRD–81–99) and Report to Congressional Requesters, Special Wage Program: Centers Offer Employment and Support Services to Workers With Disabilities, But Labor Should Improve Oversight (GAO–01–886)—explain that due to lack of capacity, training, and resources, the Wage and Hour Division is incapable of enforcing compliance with the subminimum wage provision. Furthermore, the significant appropriation that would be required to improve oversight of the regulation would be better spent improving employment outcomes for people with disabilities. (9) According to the rules established under section 14(c) of the Fair Labor Standards Act of 1938, employers are to determine the special wage to be paid to a disabled employee through a complicated method that unfairly establishes a productivity benchmark that would be difficult for anyone to maintain. The inability of many employers to correctly establish the wage pursuant to the rule has regularly resulted in disabled employees receiving even less than the special minimum wage (below the federally established minimum wage) that they should have received under the regulation. 3. Transition to fair wages (1) Discontinuance Effective on the date of enactment of this Act, the Secretary of Labor shall discontinue issuing special wage certificates under section 14(c) of the Fair Labor Standards Act of 1938 ( 29 U.S.C. 214(c) ) to any new entities not currently holding a certificate. (2) Transition All special wage certificates held on the date of enactment of this Act— (A) by private for profit entities shall be revoked 1 year after such date of enactment; (B) by public or governmental entities shall be revoked 2 years after such date of enactment; and (C) by non-profit entities shall be revoked 3 years after such date of enactment. (3) Repeal Effective 3 years from the date of enactment of this Act, section 14(c) of the Fair Labor Standards Act of 1938 ( 29 U.S.C. 214(c) ) is repealed and any remaining special wage certificates issued under such section shall be revoked.