Rhode Island nonprofit owes disabled workers $300,000 in back wages

In a settlement with federal labor officials, a Rhode Island nonprofit has agreed to pay $300,000 in back wages to more than 100 of its disabled employees who earn less than minimum wage, according to a Providence Journal article.

The U.S. Department of Labor found that the nonprofit, Training Thru Placement Inc. (TTP), violated a federal provision that allows employers to pay workers with disabilities less than the federal minimum of $7.25 per hour.

The provision was included in the 1938 Fair Labor Standards Act to encourage employers to hire people with disabilities by allowing them to adjust wages for lower productivity. Most employers who operate under a Section 14(c) certificate pay a piece rate, a fixed amount for each task or product completed.

But employers must follow specific requirements to come up with those rates. They are required to check with local businesses that do similar work to see what they pay, and they must also test the productivity of a non-disabled person doing the same work, called time studies.

The violations at TTP in North Providence occurred between June 2010 and January 2013.

At TTP, workers assembled and sorted goods by hand. But federal labor officials found that instead of calculating the wages based on workers’ individual productivity levels, as required under the terms of their certificate, the school paid the students flat rates of $1 to $2.01 per day, with no regard to the number of hours they had worked or the amount of work completed, and without calculating the appropriate “sub-minimum wage” allowable based on the prevailing wage rates in the area, labor officials said.

Training Thru Placement also falsified time-study documents needed to calculate legitimate rates of pay, labor officials said. Employees were paid sporadically, sometimes going for weeks at a time between paychecks.

The Department of Labor reports that the nonprofit has taken corrective action by replacing its board of directors and firing managers who would have or should have been privy to the violations.

The labor department had initially revoked the nonprofit’s certificate but has issued a new one because of the changes that were made, according to the article.

“This settlement,” said Mark Watson of the labor department, “resulted from our ongoing commitment to remedy labor violations and protect the rights of workers with disabilities.

“The law provides workers with disabilities an opportunity to work and receive a paycheck for that work. We will use available enforcement tools to prevent employers from exploiting workers.”

PublicSource reported in August that the labor department has ordered Pennsylvania organizations to pay $118,000 in back wages to workers with disabilities since 2011. The back wages were paid to 1,193 employees, including non-disabled employees in some cases.

About 13,000 disabled Pennsylvanians earn an average of $2.40 an hour in subminimum-wage work programs, according to a PublicSource analysis of federal labor documents.

Reach Halle Stockton at 412-315-0263 or hstockton@publicsource.org. Follow her on Twitter @HalleStockton.