Real Wages, Real Work for People with Disabilities

An article on sheltered workshops by Julie Foster and Sonja Kerr as published in The Legal Intelligencer on May 29, 2015.

Nancy Stewart wants to work in an office. She successfully worked as an office assistant for six months before being laid off in downsizing, and was not able to get help finding another job. Since then, Stewart has worked in a segregated warehouse packaging car parts and labeling food for subminimum wages, earning between $10 and $40 per week. Stewart is one of approximately 13,000 Pennsylvanians with disabilities who labor in more than 100 segregated sheltered workshops, performing menial repetitive tasks, for an average of $2.40 an hour.

Stewart says, “I should be paid equal pay. I should be getting sick pay and vacation pay.” All she wants is a chance “to prove to people I can make it in the outside world.”

Stewart’s story is affected by several federal laws that say she should be given the supports to work a real job. Under the Americans with Disabilities Act (ADA) and the Rehabilitation Act, the U.S. Supreme Court held in Olmstead v. L.C., 527 U.S. 581, 626 (1999), that services, such as employment services, must be provided to individuals with disabilities in the most integrated setting appropriate. In a seeming contradiction, the Fair Labor Standards Act allows sheltered workshops to pay people with disabilities less than minimum wage. More recently, in July 2014, Congress passed the Workforce Innovation and Opportunity Act (WIOA) which requires people under the age of 24 have the opportunity to work in the community before starting subminimum wage work. WIOA also requires Stewart and her peers receive employment counseling and information on an annual basis. Finally, in January 2014, the Centers for Medicare and Medicaid Services (CMS) issued a final rule requiring services funded by Medicaid waivers, such as the prevocational (or pre-employment) services provided to Stewart in the sheltered workshop, be provided in integrated settings.

So, why is Stewart still working in a segregated setting? This article explores the present barriers Stewart and thousands of others face in accessing real jobs and for real wages.

Moving out of the Institution

Sheltered workshops are a part of the story of institutionalization of people with disabilities in Pennsylvania. When institutions began to close in the 1960s and 1970s, concerned members of the community created workshops with the idea that individuals could learn employment skills such as maintaining a work schedule and interacting with supervisors, that could later be used in a community-based job.

Recreating Institutional Settings, Learning on the Job

Sadly, sheltered workshops today have the same hallmarks of the historical institutions; individuals interact principally with paid staff, have little to no engagement with nondisabled peers, and cannot leave when they choose. Most sheltered workshops are in warehouse settings where participants package, assemble, or bundle consumer goods on contract for private companies. Workshops typically pay 1 cent per piece, which can mean as little as 40 cents a day. Only 5 percent of people who enter workshops ever move on to work in regular jobs in their communities.

While sheltered workshops were created with good intentions, studies show they are not effective. Workshop participants who transition to competitive employment earn less than their peers who did not spend time in workshops, according to Robert Cimera’s “Does Being in Sheltered Workshops Improve the Employment Outcomes of Supported Employees With Intellectual Disabilities?” No other adults go to a facility for decades to learn job skills. We learn the skills on the job.

Sheltered workshops are principally funded by the Medicaid waiver system, which pays a daily rate for these “prevocational” services. The same Medicaid waivers can fund supported employment services to help people find and keep jobs in the community.

National data shows it costs taxpayers an average net of $251.34 per month per person more in the long term to keep a person in a segregated workshop than to support that person in a regular job in his or her community, Cimera wrote in “The Economics of Supported Employment: What New Data Tell Us.”

In 2012, Pennsylvania spent more than $220 million on segregated day services but just $17 million to help people work in integrated employment. That meant only about 10 percent of the waiver participants got supports to work in the community, according to The Institute on Disabilities’ “Independent Monitoring for Quality: A Statewide Summary” (2011-12).

Reversing this huge funding disparity would be more consistent with the ADA’s requirement to help people with disabilities work in regular jobs in their communities. We know that most people can and want to work in the community. Most of our funding should be supporting employment in the community.

What Can We Do?

Unfortunately, many people believe that some individuals with disabilities are incapable of working. Concerns about safety, transportation, physical and mental health, and a belief that individuals are not ready for work “on the outside” echo the past opposition to transitioning from residential institutions to the community.

For those of us without firsthand experience in supported employment, it may be difficult to imagine how individuals with significant disabilities can work in the community. But research from the past 40 years has shown that even people with severe intellectual disabilities who are medically fragile can work in the community. And there are jobs for them. WIOA recognizes that customized employment is an important supported employment service. Rather than appeal to a business’s sense of charity, customized employment offers business solutions to employers by creating a job completing tasks the employer had not previously been able to accomplish efficiently or at all.

In one case, J.T. has a passion for dismantling engines and helped save an airplane manufacturer $70 an hour it spent paying engineers to take apart the engines they refurbished. This employee, previously deemed unemployable and languishing in a segregated program, now makes $15 an hour taking apart engines, freeing up the engineers to focus on reassembling the refurbished engines. The result benefits J.T., who is now employed and independent, his family, taxpayers, and the company.

There are challenges. But the greatest challenge is changing our views of people with disabilities to recognize that everyone can work.

Change on the Horizon

We cannot continue to create false barriers to real work by assuming people are less capable. Instead, individuals with disabilities can and should earn competitive wages and have the personal dignity and respect that comes from real work.

The CMS final rule and WIOA offer the opportunity to give people with disabilities a meaningful choice of paid employment in the community. If these laws were implemented correctly, Stewart would no longer be in a segregated setting doing something she hates. Instead, Stewart could be taking computer classes to improve her marketable skills to work in an office. She might also work one day a week in a secretarial pool, learning skills on the job, and building her resume to obtain real, paid work.

Pennsylvania is currently in the process of implementing the CMS final rule and WIOA. How that will play out in Pennsylvania depends, in part, on us. Call your legislator to urge Pennsylvania to fully implement the integration mandates of the CMS final rule, and to fund the employment services and subminimum wage prohibitions in WIOA. Pennsylvania SB 200 would appropriate an additional $5 million to match $18 million in federal funds Pennsylvania is currently leaving on the table. We also need to tell Pennsylvania legislators that we support a meaningful Employment First policy in Pennsylvania. You can call and voice your support for this action today.

Finally, each law firm in Pennsylvania can actively recruit and hire individuals with disabilities. The law firm Woodcock Washburn, which is now combined with Baker & Hostetler, and the Philadelphia Municipal Court have made disability recruitment a priority, and you can too. Who will hire Stewart?

Sonja D. Kerr is the director of disability rights for the Public Interest Law Center. Kerr has litigated special-education cases on behalf of students with a variety of disabilities, in nine different states, gaining a national reputation for groundbreaking litigation on behalf of children with disabilities.

Julie Foster is an independence fellow at the law center, where she represents low-income individuals with disabilities in discrimination matters. Foster also engages in education and outreach to help individuals with disabilities access and remain in the workforce.

Reprinted with permission from the May 29, 2015 edition of the The Legal Intelligencer © 2015 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. –