Amended in Senate June 18, 2014

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 14(c) 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 begin delete persons; end delete begin insert persons who
choose to work; end insert and

begin insert

WHEREAS, The State of California has supported opportunities
for employment for all disabled workers, specifically in the
adoption of the Employment First Policy for the most vulnerable
population of disabled workers, which states that “it is the policy
of the state that opportunities for integrated, competitive
employment shall be given the highest priority for working age
individuals with developmental disabilities, regardless of the
severity of their disabilities”; and

end insert

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 are 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
productivity; and

WHEREAS, Time study practices used to determine special
wage rates are both inconsistent and unfair 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

begin delete

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

end delete

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; begin delete now therefore, be
it end delete begin insert and end insert

begin insert

WHEREAS, These employers have proven that there are
workable alternative employment models to Section 14(c) of the
1938 Fair Labor Standards Act for disabled workers, such as
Employment First, which allow for the successful development of
individuals by providing quality training and supports for
individuals with disabilities to obtain competitive integrated
employment, as well as the successful operation of businesses and
programs; now, therefore, be it

end insert

Resolved by the Assembly and the Senate of the State of
California, jointly, That the Legislature of California begin delete request end delete
begin insert requests end insert 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

begin insert

Resolved, That the Legislature of California requests that
prior to and during the phasing out of Section 14(c) of the 1938
Fair Labor Standards Act the United States Congress (1) promote
the continuation of existing employment and support models for
disabled individuals other than Section 14(c)of the 1938 Fair
Labor Standards Act, as well as further identify and develop
alternatives of access to a diverse range of employment
opportunities, to be in place and widely available prior to the
phasing out of Section 14(c) of the 1938 Fair Labor Standards
Act; (2) continue to collect comprehensive data that accurately
reflects the number of disabled individuals working, the number
of disabled individuals seeking employment, and the number of
disabled individuals who have expressed an interest in working
but who have not yet been successful in locating and securing
gainful employment; and (3) continue to utilize strategies which
identify the industries and types of work in demand in both the
public and private sector, and the skills and abilities of potential
workers with disabilities that either exist or need to be developed
to move people into these positions; and be it further

end insert

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.