Amended in Assembly March 25, 2014

California Legislature—2013–14 Regular Session

Assembly Joint Resolution No. 36

Introduced by Assembly Member Gonzalez

(Coauthor: Senator Hueso)

February 19, 2014

Assembly Joint Resolution No. 36—Relative to wages.

LEGISLATIVE COUNSEL’S DIGEST

AJR 36, as amended, Gonzalez. Special Minimum Wage Certificate Program.

This measure would urge the United States Congress to phase out the use of the Special Minimum Wage Certificate provision and eventually repeal Section begin delete 14 (c) end delete begin insert 14(c) end insert of the 1938 Fair Labor Standards Act.

Fiscal committee: no.

WHEREAS, Meaningful employment, and the wages associated
with it, can be an integral part of enabling human dignity and
creating more meaningful lives for disabled persons; and

WHEREAS, The 1938 federal Fair Labor Standards Act sets
out in Section 14(c) the ability for entities that employ disabled
persons to obtain special minimum wage certificates from the
United States Department of Labor’s Wage and Hour Division
which entitle them to pay a disabled worker less than the legislated
minimum wage rate; and

WHEREAS, The 1938 Fair Labor Standards Act’s subminimum
wage provisions were created in the era of the Great Depression
with the intent of subsidizing sheltered workshops which could
not afford to pay their workers full wages and, some may argue,
incentivizing private companies to employ disabled persons; and

WHEREAS, These special wage rates are calculated according
to productivity with no specified wage floor; and

WHEREAS, The productivity-based calculation of a special
minimum wage is generally done by a complicated “time study”
which entails an administrator comparing how fast a disabled
worker is able to complete a certain task compared to nondisabled
workers; and

WHEREAS, There begin insert are end insert differing work and equipment conditions
beyond the worker’s control, a lack of oversight and enforcement
by the Wage and Hour Division for the special minimum wage
certificates, a lack of consistency in the time study tests done by
employers, and a singling out of disabled workers given that the
general workforce is not subjected to standards of timed
begin delete productivity, the time study practice to determine that wages are
both inconsistent and unfair end delete begin insert productivity end insert ; and

WHEREAS, Time begin delete studies end delete begin insert study practices used to determine
special wage rates are both inconsistent and unfair end insert and the
subminimum wages they produce have been described by disabled
workers throughout the media as humiliating, degrading, and
making them feel like “second-class citizens”; and

WHEREAS, Some entities have claimed that the special
minimum wage certificates are an essential stepping stone to
permanent and fully paid employment in the general workforce.
The Psychiatric Rehabilitation Journal published empirical
evidence in 2004 which suggested that sheltered workshops are
generally ineffective at progressing the disabled workers, while
for other employers the special minimum wage certificates serve
as an incentive to exploit disabled workers rather than integrate
them into the mainstream economy; and

WHEREAS, It has been widely documented that many of the
organizations which employ disabled persons are in financial
situations that would enable them to pay minimum wage to all of
their disabled employees, evident in the high compensation
packages paid to their executives; and

WHEREAS, Some employers, such as the National Industries
for the Blind, have already recognized the exploitive nature of
paying disabled workers subminimum wage and have been able
to transition to the payment of Federal minimum wage, or higher,
to their disabled employees without a significant change in
profitability or a reduction in their workforce; now therefore, be
it

Resolved by the Assembly and the Senate of the State of
California, jointly, That the Legislature of California request that
the United States Congress should phase out the use of the Special
Minimum Wage Certificate provision and eventually repeal Section
14(c) of the 1938 Fair Labor Standards Act to support the goal of
competitive integrated employment of people with disabilities
through the use of modern practices of vocational training,
improved technology, and innovative rehabilitation and
employment strategies; and be it further

Resolved, That the Chief Clerk of the Assembly transmit copies
of this resolution to the Speaker of the House of Representatives,
to the Majority Leader of the Senate, and to each Senator and
Representative from California in the Congress of the United
States.