Goodwill Industries can pay disabled workers far less than minimum wage because of a 75-year-old Fair Labor Standards Act, NBC producer Anna Schechter reported.
Goodwill, a multi-billion dollar charity, employs 30,000 disabled workers. Thanks to Section 14 (c) of FLSA, Goodwill has special minimum wage certificates that allow the company to pay employees based on their abilities, with no limit to how low that wage can be.
NBC’s Harry Smith found Department of Labor records showing disabled workers in Pennsylvania receiving as little as 22 cents an hour in 2011.
Goodwill International CEO Jim Gibbons was paid $729,000 in salary and deferred compensation in 2011.
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Special wage certificates are usually given to nonprofit organizations that set up work centers, formerly known as “sheltered workshops,” for disabled employees. Most Section 14 (c) workers are directly employed by a non-profit, more than 90 percent of them as of 2001.
One Florida nonprofit was found paying an employee just 1 cent an hour, NBC reported.
"People are profiting from exploiting disabled workers," said Ari Ne'eman, president of the Autistic Self Advocacy Network. "It is clearly and unquestionably exploitation."
"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," Harold Leigland told NBC.
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Leigland, who is legally blind, hangs clothes at Goodwill in Great Falls, Mont., for less than minimum wage, which in Montana is $7.80 per hour. Federal minimum wage is $7.25.
"It's a question of civil rights," said Leigland's wife, Sheila, who is also blind and quit her job at the same Goodwill when they attempt to cut her wages further. "I feel like a second-class citizen. And I hate it."
Goodwill estimated that 7 percent of 130,000 employees, about 7,500 people, work under the Special Minimum Wage Certificate. Only some of those workers earn at or below minimum wage.
Leigland, 66, has been paid higher than $5.46 an hour in the past, but his wages were cut to $4.37 after a "time study." The time studies calculate salaries for the Section 14 (c) and are required under federal law. They are conducted by staff who use a stopwatch to learn how long it takes a disable worker to complete a task. It is then compared to the amount of time they estimate a person without a disability could do the same task.
Gibbons defends Goodwill’s executive pay.
"These leaders are having a great impact in terms of new solutions, in terms of innovation, and in terms of job creation," he said.
He seemed to believe disabled workers do not expect to make a liveable wage.
"It's typically not about their livelihood," he said. "It's about their fulfillment. It's about being a part of something. And it's probably a small part of their overall program."
*Update* On June 22, Goodwill responded to media coverage on the special minimum wage certificate in a press release.