Goodwill is one of the nation’s best-known so-called charities and is paying disabled workers as little as .01 cent an hour, due to a 75-year-old legal loophole that experts say needs to be changed.
Goodwill Industries, a multibillion-dollar company whose executives make six-figure salaries, is among the nonprofit groups permitted to pay thousands of disabled and handicapped workers much less than minimum wage due to a federal law known as Section 14 (c). Labor Department records show that some Goodwill workers in Pennsylvania earned wages as low as .22, .38, and .41 cents per hour in 2009.
“If they really do pay the CEO of Goodwill three-quarters of a million dollars, they certainly can pay me more than they’re paying,” said Harold Leigland, who is legally blind and hangs clothes at a Goodwill for less than minimum wage.
“It’s a question of civil rights,” added his wife, Sheila, blind from birth, who quit her job at the same Goodwill store when her already low wage was cut further. “I feel like a second-class citizen. And I hate it.”
Section 14 (c) of the Fair Labor Standards Act, which was passed in 1938, allows employers to obtain special minimum wage certificates from the Department of Labor. The certificates give employers the right to pay disabled workers according to their abilities, with no bottom limit to the wage.
Most, but not all, special wage certificates are held by nonprofit organizations like Goodwill who then set up their own so-called “sheltered workshops” for disabled employees, where employees typically perform manual tasks like hanging clothes or separating clothes hangers.
Other businesses like restaurants and department stores sometimes benefit from section 14 (c). Taking advantage of the system by paying disabled citizens less than minimum wage has become a popular but scrutinized trend in the United States.
When a non-profit provides Section 14 (c) workers to an outside business, it sets the salary and pays the wages. For example, the Helen Keller National Center, a New York school for the blind and deaf, has a special wage certificate and has placed students in a Westbury, New York, Applebee’s franchise. The employees’ pay ranged from $3.97 per hour to $5.96 per hour in 2010. The franchise said it has also hired workers at minimum wage from Helen Keller. Ocala Post reached out to Applebee’s, however they refused to comment.
The Helen Keller National Center also placed several students at a Barnes & Noble bookstore in Manhasset, New York, in 2010, where they earned $3.80 and $4.85 an hour. A Barnes & Noble spokeswoman defended the Section 14 (c) program by saying “it provides jobs to people who would otherwise not have the opportunity to work.”
Florida is by far the worst state for taking advantage of the disabled; which is ironic seeing as though Florida has some of the toughest laws on criminals that take advantage of the elderly or the disabled. In 2011 workplaces in Florida reported paying as little as one cent per hour to disabled workers. Ocala Post reached out to several businesses including Goodwill Industries for Central Florida and all refused to comment.
Businesses and nonprofits are profiting from exploiting disabled workers. Defenders of Section 14 (c) say without it, disabled workers would have few options. The Department of Labor told Ocala Post that Section 14 (c) “provides workers with disabilities the opportunity to be given meaningful work and receive an income.” A fancy way of saying if the law did not exist, nonprofits and for-profit businesses would leave disabled citizens out in the cold.
Harold Leigland, said he feels that Goodwill can pay him a low wage because the company knows he has few other places to go. “We are trapped,” he said. “Everybody who works at Goodwill is trapped.”
Leigland, a 66-year-old former massage therapist with a college degree, currently earns $5.46 per hour working for Goodwill.
Goodwill bases pay on “time studies” or “timed tests.” Staff members of Goodwill stand over the disabled employees with a stopwatch to calculate how long it takes for a person to hang hangers or articles of clothing. Are you sitting down? That time is then calculated against a person that does not have a disability. Goodwill then uses a formula to calculate the salary for that individual, which always comes out to be much less than minimum wage. Goodwill repeats the “tests” every six months.
Goodwill also gets around the Family Medical Leave Act (FMLA). One worker with Goodwill was making $4.50 per hour, she had to have emergency knee surgery and when she returned to work, Goodwill knocked her down to $2.75 per hour without giving her a “time study.” That worker was eventually forced to quit her job.
One worker said the “time studies” are stressful and sometimes it seems Goodwill staff make the tests harder just to be able to lower wages.
Leigland’s pay has been higher than $5.46, but it has also dropped down to $4.37 per hour, based on the time-study results. He also said he believes Goodwill makes the time studies harder when they want his wage to be lower.
In 2011 the CEO of Goodwill Industries of Southern California took home $1.1 million in salary and deferred compensation. His counterpart in Portland, Oregon, made more than $500,000. Salaries for CEOs of the roughly 150 Goodwill franchises across America total more than $30 million.
Goodwill International CEO Jim Gibbons, who was awarded $729,000 in salary and deferred compensation in 2011, defended the executive pay.
According to Goodwill’s own figures, salaries for the CEOs in 69 franchises that hold special minimum wage certificates totaled almost $20 million in 2011.
Gibbons also defended the “time studies,” and the entire Section 14 (c) approach. He said that for many people who make less than minimum wage, the experience of work is more important than the pay. However workers that cannot pay their bills, disagree.
The bill is opposed by trade associations for the employers of the disabled, and past attempts to change the law have failed. Marc Maurer, president of the National Federation of the Blind and a foe of the sheltered workshop system, says ” the current system sends the message that Americans who have disabilities aren’t as valuable as other people,’ and that’s wrong. These folks have value. We should recognize that value.”
One worker said, “with CEO’s of Goodwill bringing home a total of $20 million in salaries, they do not seem so nonprofit.”
Experts say as long as communities continue to support Goodwill, disabled Americans will continue to be taken advantage of.
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