Federal plan to abolish paying disabled workers less than minimum wage facing deadline

By Matt Flener

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    RAY COUNTY, Missouri (KMBC) — Karen Park sat at a table on Tuesday putting plastic sleeves around bottles of tire sealant at Ideal Industries Incorporated.

She loves her job and her fellow employees, most with physical or cognitive disabilities.

“I’ve been here at Ideal for 6 years,” she said. “This place is my family.”

But 67 workers at Ideal Industries Inc., like Park, are paid less than minimum wage to accomplish various work at the Ray County nonprofit.

Ideal Industries Inc.’s labor practice is legal.

But it is now under scrutiny from the U.S. Labor Department along with similar employers across the country.

The Biden administration, in December, introduced a rule to abolish subminimum wage certificates for employers like Ideal Industries Inc. over the next three years.

The public comment period ends Jan 17, just days before Biden leaves office. Families and employers around the country are now pushing the Trump administration to reverse the proposed rule.

The U.S. Labor Department’s current plan aims to integrate workers with physical and mental disabilities into the mainstream workforce, calling the practice of paying workers less than minimum wage no longer necessary.

The proposed rule has employers, employees, families, and disability rights advocates sparring over the balance of civil rights for disabled workers versus their potential for job losses and extra burdens on families.

Park does not mind lesser pay at Ideal Industries Inc.

She feels at home at the nonprofit established in 1980, a sheltered workshop granted a certificate under a section of the Fair Labor Standards Act of the U.S. labor department to legally pay employees subminimum wages. The certificates allow employers to pay people with disabilities less money if they are not as productive compared to a person without disabilities.

Park says her supervisors do not pressure her to get work done and allow her plenty of support.

“I don’t want to work outside of the workshop because I love it here,” she said.

DISABILITY RIGHTS ADVOCATES BELIEVE SHELTERED WORKSHOPS ARE LONG OVERDUE FOR CHANGE

Disability rights advocates say workshops like Ideal Industries Inc. are hanging on to a more than 80-year-old employment model for people with disabilities.

They call the practice of lower pay exploitative and do not buy into arguments that any higher pay would reduce social security or disability benefits.

“People with disabilities, when they are paid minimum wage and above, they always come out ahead,” said Rocky Nichols, executive director of the Disability Rights Center of Kansas.

Nichols has championed workers moving into integrated employment and has seen a drastic decrease in the number of sheltered workshops across the country over the past decade.

“This is something that’s coming,” Nichols said. “We’re so glad that the Department of Labor is promulgating this rule, and it’s very doable that it can be done within three years.”

Ideal Industries Inc. executive director Heather Pugh disagrees, saying she is constantly balancing workers’ pay against their social security benefits due to income caps.

“Our individuals have so many complex situations,” she said. “It’s a consistent juggle.”

Pugh said she has parents that walk in every day, “and say, ‘The state just called my child unemployable.’”

“They title people unemployable,” she said. “And here we have hope.”

Missouri has 76 sheltered workshops with 3,482 workers paid less than minimum wage, according to U.S. labor department numbers. Missouri’s number is much higher than Kansas, Nichols believes, due to state financial support of the sheltered workshop model.

Kansas has only 13 sheltered workshops with just 701 employees making subminimum wage. Kansas has also incentivized employers to integrate workers with mainstream employment.

A 2023 federal Government Accountability Office report found about 120,000 workers across the country were employed through subminimum wage certificate holders with half earning less than $3.50 an hour.

Nichols points to workers at the Self Advocate Coalition of Kansas (SACK), a social service organization paying workers with disabilities more than minimum wage. Workers at SACK say employers across the country have found success away from the sheltered workshop model.

“We offer a place where people can come, they can be themselves, more like a family here,” said Phillip McGruder, who works at SACK.

SACK workers, and Nichols, believe a move away from the sheltered workshop model is long overdue, saying employers are profiting off reduced labor costs.

“A vast majority of disability service providers have already done away with it,” he said. “They’re already like, ‘Well that’s a long time ago.’”

DEADLINE APPROACHING FOR RULE CHANGE

Employees, parents, and board members at Ideal Industries Incorporated say a change to U.S. law will disrupt their lives in the coming years.

The sheltered workshop in Ray County is making a public push to stop the U.S. Department of Labor from abolishing the certificates, saying the increased pay will make benefit calculation much harder.

“Our kids will lose benefits, their housing, their medical, then what are they going to do?” said Sonja Robinson, whose son is employed at Ideal Industries Inc.

“We’re not hurting anyone,” she said. “This shop, this workshop is a blessing to our kids, and they want to take it away, for what reason? I don’t know.”

Rosetta Cates, who has worked at Ideal Industries since 2004 believes it’s not about the money.

“It’s about being able to come to a place every day and be appreciated for who we are.”

Pugh said she believes her environment provides the ideal situation for dozens of disabled employees in Ray County. She worries about her workers’ mental and physical health if the new rule goes into place, and some may leave her workshop.

“There’s nothing about my environment that is segregated,” Pugh said. “Not when they are given the opportunities they are given.”

Nichols believes the opposite, saying workers should be—and have been—integrated into the mainstream workforce across the country.

“Red states, blue states, rural, urban have done away with paying people sub minimum wage,” he said. “It’s about time we do it as a nation.”

The U.S. Department of Labor public comment period about subminimum wage certificate holders ends January 17th.

You can make public comments here about the proposed new rule.

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