Wage hike threatens disabled job centers

Developmentally disabled men and women employed in programs designed to help them transition into the mainstream work force are in jeopardy of losing their jobs when the state’s new minimum wage laws take effect Jan. 2.

Proposition 202, which raises the state’s minimum wage to $6.75 an hour, passed by nearly a 2-1 margin on Nov. 7. But until recently, few foresaw that transitional job centers, which were exempt under federal law from paying minimum wage, could be adversely affected by the voter-approved initiative.

Federal labor laws can exempt job shelters from paying minimum wage to disabled workers who would otherwise not be able to find work in the community. But because the state’s new $6.75-an-hour law is ostensibly better for employees than the federal standard, state law will trump the federal exemption, labor experts say.

Some organizations that provide jobs for the severely disabled fear they will not be able to afford to employ many of their workers unless state officials find a way to reconcile existing work programs with the new law.

At the same time, however, at least one prominent advocacy group has voiced disapproval over allowing job centers to continue paying subminimum wages to the disabled on the grounds that it’s unequal.

“What I’m frustrated by is that nobody seems to grasp the ramifications of this,” said Randy Gray, president and CEO of the Marc Center in Mesa, which offers transitional employment to about 500 people.

“I have been working around the clock with high-paying labor attorneys who are saying that unequivocally, the net effect of this is we have to cease and desist all center-based workshop operations effective Jan. 1.”

Industrial Commission of Arizona director Larry Etchechury agreed Prop. 202 presents a legal conflict for work programs that pay less than minimum wage.

The commission is responsible for enforcing the new minimum wage standards and will issue a set of interim rules in January that explain how the law will be applied.

The permanent rules won’t take effect for at least six months, following a public input process.

Etchechury said it might be possible to maintain existing work programs by redefining the relationship between developmentally disabled workers and their employers as educational in nature, or by getting the Legislature to approve an amendment to the law by a supermajority of three-fourths.

But, he said, those two options would only work if all parties affected by the law agreed that the status quo is preferable, and so far there does not seem to be a consensus.

According to Gray, other states that have passed similar minimum wage laws included a clause in their legislation that exempted organizations such as the Marc Center.

He estimated there are about 5,000 people statewide enrolled in some type of employment center for the developmentally disabled.

These centers teach people job skills and often contract with private companies such as Bashas’ or government agencies for labor.

At the Marc Center, for example, workers head over to a large building on Extension Road every day where they stuff tea bags into boxes for P.F. Chang’s or glue together cardboard pieces to make protective covers for furniture.

Because most of the workers cannot perform tasks as quickly as someone without a disability, they are paid a commensurate rate that is based on their level of productivity, said Rick Mahrle, a labor attorney representing the Arizona Association of Providers for People with Disabilities.

Those with high productivity levels can make minimum wage while working at the center, although many do not. At the Marc Center, for instance, Gray estimated about 8 percent of workers earn minimum wage.

Some of these programs serve as a stepping stone to help workers transition into mainstream employment where they can receive higher wages.

Others are “shelter” programs designed for people who are not likely to find employment beyond the center, but whose self-esteem and development are boosted by getting an opportunity to work.

Dave Cutty, the president and CEO of Tempe-based The Centers for Habilitation, employs 240 people in job shelters statewide.

He said it would cost his organization $450,000 extra on payroll a year if every employee earned minimum wage. Those are dollars the center just doesn’t have, he said.

“It’s pretty ominous if this thing transpires the way we have been told it may,” he said.

But Carrie Hobbs Guiden, executive director of the state advocacy group Arc of Arizona, said she believes there are other options for the developmentally disabled besides job shelters.

She said Arc of the United States and Arc of Arizona take a different position from that of the Marc Center and other providers throughout the state.

“People with disabilities have the same rights as everyone else, so if the Legislature says all people should be paid the minimum wage, then people with disabilities are included in that,” she said.

“The Arc of the United States supports communityintegrated employment over sheltered, segregated employment.”

Many organizations in favor of the subminimum wage job centers have urged the families of the disabled workers to call Gov. Janet Napolitano’s office requesting she hold an emergency legislative session next week to take care of the problem.

Jeanine L’Ecuyer, press secretary for Napolitano, said her office has received 57 calls about the work programs this week, which is not a high number.

“This is not a simple issue,” L’Ecuyer said. “There are very strong opinions on both sides of it.”

But it was clear from the calls that some groups representing the disabled believe work programs paying less than minimum wage should be eliminated, she said.

As a result, any government action to change the effects of Prop. 202 would likely precipitate a lawsuit, L’Ecuyer said.