A federal judge this month affirmed a 2016 federal administrative finding that three Ohioans with disabilities should get back pay and damages to make up for the subminimum wage they were paid in a sheltered workshop. The court ruling and the underlying federal administrative ruling set a new, higher standard for employers to meet in order to justify paying less than full wages to people with disabilities, according to Disability Rights Ohio (DRO). Meanwhile, state data show far fewer Ohioans with disabilities working in subminimum wage positions today versus several years ago, following the state’s adoption of the Employment First policy. And a new grant-funded program now in the pilot stages aims to get more than 1,400 additional Ohioans with disabilities into full-wage jobs.

The ruling from Judge Jeffrey Helmick of the Northern District of Ohio in Seneca Re-Ad Industries v. Department of Labor upholds a U.S. Department of Labor (DOL) decision to award payment of minimum wages, back pay and liquidated damages to Ralph Magers, Pamela Steward and Mark Felton. The three were employed by Seneca Re-Ad Industries, which contracts with the Seneca County Board of Developmental Disabilities to provide employment for people with disabilities within a flooring factory.

Seneca Re-Ad Industries has a DOL 14(c) certificate, which allows payment of subminimum wage. But Magers, Steward and Felton filed for review of their wages with DOL, and an administrative law judge determined the employer failed to show a causal connection between their disabilities and their productive capacities. Seneca Re-Ad Industries challenged that decision before DOL’s Administrative Review Board (ARB), which upheld the administrative law judge’s conclusions.

Simple existence of a disability cannot justify payment of subminimum wages, nor can productivity comparisons between employees with disabilities and those without, according to the ruling.

“As the ARB concluded, ‘measuring performance of a disabled individual and comparing it to a person without disabilities may tell us that the disabled individual is less productive, but it doesn’t tell us why the disabled individual is less productive,’” the ruling states.

Again citing the ARB’s conclusions, Helmick wrote the burden rested on Seneca to demonstrate a connection between disability and productivity. “In reaching this conclusion, the ARB stated there was ‘nothing inherent’ in the jobs the employees performed ‘that would make someone with blindness, an intellectual disability or Asperger’s Syndrome necessarily less productive at those tasks.’ The ARB further observed that plaintiff claimed ‘three very different kinds of disabilities … all reduce productive capacity for the same type of work.’”

DRO, which assisted the employees in this case, welcomed the ruling and said it marks an important change in how these wage decisions are made. DRO is a nonprofit designated by the state to advocate for people with disabilities as a condition of receiving federal funding.

“Based on what the administrative law judge put in his original ruling, I do think the bar is relatively high. It appears to require what he calls a fair assessment of objective evidence, to look at the person’s impairment and how that impacts their wage-earning capacity and their ability do a specific job,” Kerstin Sjoberg, executive director of DRO, told Hannah News in an interview. “It has the potential to put in place a pretty high standard for employers. People have to be aware of it, both on the employer side and the employee side.”

Attorneys with DRO and the firm of Brown, Goldstein & Levy assisted the workers in the litigation. The National Federation of the Blind helped the employees petition DOL to review their wages in the first place.

“The National Federation of the Blind has fought the payment of subminimum wages to the blind and other workers with disabilities since our founding,” said Mark Riccobono, president of the federation, in a statement. “Now, after nearly a decade of litigation, a federal court has affirmed, for the first time, that disability by itself cannot be used to demonstrate lower productivity even under the terms of Section 14(c) of the Fair Labor Standards Act. This ruling points to the truth that we have always known: the subminimum wage exemption is simply a manifestation of society’s low expectations and false assumptions regarding the capacity of workers with disabilities. We applaud the court for recognizing this truth as it applies to the courageous workers who took their case to the Department of Labor, but we will not rest until no blind or disabled worker can be victimized by this antiquated, discriminatory and immoral practice.”

DRO has advocated against use of subminimum wage generally, including through a task force on 14(c) jobs led by the Ohio chapter of the Association of People Supporting Employment First, Sjoberg said.

Ohio launched its Employment First policy more than a decade ago, with the goal of finding more full-wage, integrated employment opportunities for people with disabilities. (See The Hannah Report, 3/19/22.)

According to the Ohio Department of Developmental Disabilities, about 3,500 people are in subminimum wage positions today, down substantially from 18,536 in 2016.

Opportunities for Ohioans with Disabilities (OOD), the state agency focused on helping people with disabilities find and keep employment, rolled out the Works4Me initiative in October. Supported by a five-year federal grant, Works4Me aims to provide supports and services to enable 1,450 people with disabilities to complete activities that lead toward “competitive integrated employment” – generally meaning jobs in which they’d earn comparable wages and benefits to those of colleagues without disabilities, and have similar opportunities for advancement and public interaction as their colleagues do.

According to Kim Jump, spokesperson for OOD, pilot work on Works4Me is underway now in Cuyahoga, Hamilton, Lake and Lucas counties, with statewide implementation planned later this year.

“For its part, Works4Me will bring together partnerships across the state to bridge skills gaps through career development, work incentives planning, paid community-based work experiences, and wraparound services. The idea is to help people currently working in or thinking about subminimum wage jobs see their potential for competitive integrated employment and provide them with the resources and opportunities needed to achieve outcomes equal to those without disabilities. It’s a strategy built on empowering individuals and their families to make informed choices based on reliable information and real-life experiences -- including pursuing rewarding employment that fulfills their potential,” Jump said in an email.

In the prior General Assembly, Rep. Dontavius Jarrells (D-Columbus) and former Rep. Brigid Kelly (D-Cincinnati) introduced legislation to eliminate subminimum wage, 134-HB716. It was referred to the House Commerce and Labor Committee but did not receive a hearing.

The ruling in Seneca Re-Ad Industries v. Department of Labor is at www.hannah.com>Important Documents & Notices>Library.

More information about Works4Me is at http://tinyurl.com/bdfk6f7d.