This will impact organizations in Dayton, Springfield and Lebanon, which are participating in the federal program along with 45 other employers across Ohio.
Some day care providers who work with people with disabilities say the changes could deny opportunities to job seekers, while disability advocates are calling for equal pay for equal work.
“This is a difficult issue,” said Pamela Combs, supervisor of the Montgomery County Board of Developmental Disabilities Services. “We understand both sides: There are those who legitimately believe that everyone should be paid at least minimum wage for their work. But there are also those in our families and those we serve who believe that employers will not hire individuals with developmental disabilities who cannot meet competitive expectations.”
Below minimum wage
Section 14(c), part of the Fair Labor Standards Act of 1938, allows employers to pay less than the minimum wage to workers whose disabilities affect the productivity of certain tasks, but only if the employer holds a special certification from the U.S. Department of Labor’s Wage and Hour Division.
When the program was created, it was designed to help disabled soldiers, but it has since changed its focus to only offer jobs to veterans.
The 14(c) program has been criticized by advocacy groups because some facilities pay disabled workers just cents on the dollar.
The majority of 14(c) workers earn less than $3.50 an hour, but about 14% earn more than the federal minimum wage of $7.25, according to a 2021 report from the U.S. Government Accountability Office.
Community rehabilitation programs provide day services to people with disabilities and make up the majority of 14(c) employers, said Kirsten Sjoberg, executive director of the Ohio Disability Rights Association.
“These sheltered workshops are not your typical employers. They’re not like a company with a product that needs employees,” she says. “They’re nonprofits that want to help people with disabilities gain skills and get jobs.”
Members of the Ohio Disability Rights Coalition are among dozens of organizations that make up the 14(c) Task Force, which advocates for the repeal of the state’s subminimum wage system.
“Most, if not all, people with disabilities are able to work to some degree,” Sjoberg says. “If they can find work that matches their skills and interests, and if they are given the accommodations necessary to do the job well, they will work, and they will work well.”
However, 14(c) is also subject to change at the national level.
Discussed Changes
Federal officials announced last fall that the Department of Labor would review the program.
The study included stakeholder meetings with workers with disabilities, their families, 14(c) certified organizations, and other groups that work with people with disabilities.
The study analyzes competitive employment options, states’ experiences with expanding or banning subminimum wage wages, and the potential impact of ceasing issuance of 14(c) certification.
Fifteen states have passed laws eliminating 14(c) programs, and Ohio could join the list.
Rep. P. Scott Lipps, a Warren County Republican, is co-sponsoring a bill that proposes phasing out subminimum wage wages in Ohio over five years.
House Bill 427, introduced in April, would phase out the state’s 14(c) program over five years and prohibit the Ohio Department of Commerce from issuing or renewing the certification.
If the bill passes, current 14(c) certificate holders would also be required to submit transition plans to the Ohio Department of Developmental Disabilities.
“HB 427 marks the beginning of an important conversation on workforce development and how we best support Ohio’s (developmental disability) community and move it into the 21st century,” Rep. Lipps said in sponsoring the bill.
Jan Dougherty, co-president of the Ohio chapter of the Association of First Employers Advocates (APSE), said she and other members of the 14(c) Task Force are excited to see the bill move forward.
APSE is an organization that helps people with disabilities have equal opportunities in the workplace.
14(c) Program Reduction
Dougherty said it’s difficult to get an exact number of people working under Ohio’s subminimum wage system.
Although the U.S. Department of Labor reports the number of certificate holders by state each month, employers with “pending” certificates are not required to report the number of employees they employ under 14(c).
According to APSE, the number of active certificates and the average number of individuals served through 14(c) settings have been steadily declining.
From 2018 to 2023, the total number of certificates nationwide fell from 1,449 to 773. This means that the number of people employed by 14(c) certificate holders also fell by 64%.
The Government Accountability Office reported that the decline in wages may be due in part to federal and state policies that limit the payment of wages below the federal minimum wage.
Combs said many county disability commissions are also expanding competitive employment opportunities in their communities, and there are state-led programs to transition workers below minimum wage to competitive wages.
As of this month, about 50 locations in Ohio have 14(c) certification active or in the process of applying, and three of those workshops are in this eight-county region.
The Department of Labor reported there are more than 2,600 14(c) workers with valid certification in Ohio, but APSE estimates the total number of workers at 3,500.
More than 80 employees work for 14(c) certificate holders in Montgomery, Greene, Butler, Warren and Clark counties, according to the U.S. Department of Labor.
And that figure counts only two active certificate holders, Better Living Home Health Supplies in Dayton and Production Services Unlimited in Lebanon, and does not include a license pending application from TAC Industries in Springfield. TAC employed 69 people through its 14(c) program in May, according to archived reports.
Production Services Unlimited did not respond to a request for comment, and TAC declined to be interviewed.
“14(c) gives us that opportunity.”
The only 14(c) certificate holder in Montgomery County is Better Living Homehealth, which operates a day services facility for people with disabilities on Kunz Road in Dayton.
Better Living provides both 14(c) and competitive jobs to dozens of people with developmental disabilities, according to marketing manager Tracy Shoby.
According to the day service provider, the day centre employs 31 people under a 14(c) certificate.
Better Living has several companies that have contracted with it to do work for them. Projects assigned to 14(c) workers include assembling boxes, inserting screws and nails into plastic bags, and folding packaging instructions.
“You end up taking on that kind of work,” she said. “We don’t have the machines to do it, but our staff can do it because it’s labor-intensive.”
A 14(c) worker’s pay is not calculated by time and a flat rate, but rather is measured by the number of steps he or she can complete on the job and their productivity over a period of time.
Workers are paid every two weeks, with pay ranging from $21 to $400 depending on the individual. Some 14(c) workers choose to work fewer than a certain number of hours each week to maintain their public benefits, and Shoby said the day center is happy to work with any clients who want work.
A few years ago, many work centers that supported people with disabilities were able to send groups of their clients to work in local businesses, but these relationships have weakened, and many of their clients are unable or unwilling to go out in public for a variety of reasons.
“If you want to work and there’s a way for us to put you to work, we’ll find it,” she said. “But 14(c) gives us that opportunity.”
Chaubey estimated he would likely lose 15 jobs if the 14(c) program were eliminated.
“This is going to really hurt people who want to work but don’t want to or can’t work all the time,” she said. “They’re going to have to choose between doing the whole job or not being able to work at all.”
However, day programs will not be eliminated, regardless of the existence of 14(c) programs: Day services are mandated by the state to meet Medicaid requirements.
When workers aren’t assigned to work, they can be found exploring the community playing basketball around the center, listening to stories, or even heading out on Better Living field trips to local lunch spots.
“Services will continue, they’ll just look different,” she said.
Support for families and workers
Dougherty, who has a son with a disability, said subminimum wages devalue people with disabilities and limit their capabilities, but they also create uncertainty for families about jobs.
“There’s so much fear,” she says. “They think if they leave the workshop they’ll never see their friends again. Or they’re scared they’ll lose their benefits. They’re scared something bad will happen at work. There are so many things the system is telling us that no one on the other side is telling us.”
Officials said the Montgomery County Developmental Disability Services Board would work with service providers and individuals on a case-by-case basis if subminimum wage wages were phased out at the state or national level.
The state also has support systems in place for workers below minimum wage. Works4Me, part of the Ohio Disability Opportunity Agency, helps adults with disabilities and out-of-school youth complete activities that will help them secure competitive employment.
According to the Ohio Opportunities for People with Disabilities, Ohioans who qualify for vocational rehabilitation services and are currently working at or below the minimum wage or considering starting work at or below the minimum wage for the first time can receive assistance from the program.
Additionally, about 300 people have been competitively employed in Montgomery County with the help of the local Board for People with Developmental Disabilities. These jobs pay the minimum wage as a starting salary, Combs said.
These workers are given vocational mentors and other long-term supports funded by the county Developmental Disabilities Board, and are placed with employers who can utilize their skills and interests. The main employers working with the county Developmental Disabilities Board are the grocery chains Meijer and Kroger.