Corporate Accountability and WorkPlace

Goodwill Legally Pays Disabled Workers As Low as 22 Cents an Hour

Republican Congressman's bill would phase out the exploitative practice.

Photo Credit: Creative Commons

Goodwill Industries, a non-profit whose mission is to “enhance the dignity and quality of life of individuals and families” pays disabled workers as little as 22 cents an hour, NBC reports.

Harry Smith’s report, which aired on Rock Center with Brian Williams, probes a loophole in the Fair Labor Standards Act of 1938 that allows employers to pay disabled workers far below the federal minimum wage. Section 14 (c) of FLSA grants certificates to certain employers, permitting them to pay adjusted wages to workers “whose earning or productive capacity is impaired by a physical or mental disability.” Qualified employers create “sheltered workshops,” “where employees typically perform manual tasks like hanging clothes.”

According to Labor Department documents obtained by NBC, Goodwill used this loophole to pay disabled workers in sheltered workshops “as low as 22, 38 and 41 cents per hour in 2011,” presenting a stark contrast to charity executives. Via NBC:

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.

The National Federation of the Blind, one of the most ardent critics of Section 14 (c), maintains that the law “is, on its face, discriminatory.” In a report, NFB argues “The law does not authorize below-minimum wages for all less-productive workers—only those who have disabilities.” Under the statute, employers base disabled workers’ wages on “time studies.” In this degrading process, Goodwill and other companies pull out stopwatches to determine how quickly their employees can complete company tasks, and adjust wages accordingly.

Rep. Gregg Harper (R-Miss.) introduced a bill in February that would phase out “special wage certificates.” “Meaningful work deserves fair pay,” said Harper in a statement. “This dated provision unjustly prohibits workers with disabilities from reaching their full potential.” The third-term Congressman has a 23-year-old son with an intellectual disability. His bill is currently in the Workforce Protections Subcommittee.

Meanwhile, Goodwill CEO and millionaire Jim Gibbons defended his charity’s practice of underpayment, telling NBC, “It's typically not about their livelihood. It's about their fulfillment. It's about being a part of something. And it's probably a small part of their overall program.”  

NBC also spoke with Harold Leigland, a legally blind Goodwill worker with a different view from the company’s CEO. “We are trapped," he said. "Everybody who works at Goodwill is trapped."

Steven Hsieh is an editorial assistant at AlterNet and writer based in Brooklyn. Follow him on Twitter @stevenjhsieh.

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