The National Council on Disability, an independent federal agency, is calling for a phase-out of a provision in the Fair Labor Standards Act that allows employers who receive a certificate from the U.S. Department of Labor, to pay less than federal minimum wage to workers with disabilities for work performed.

The central theme of the recommendations in the report is the gradual phase-out of the 14(c) program, and accompanying systems change to enhance existing resources and create new mechanisms for supporting individuals in securing integrated employment. Among the findings of the NCD report:

• Sheltered workshops are ineffective at transitioning individuals with disabilities to integrated employment; according to a 2001 investigation by the Government Accountability Office into the 14(c) program, only approximately 5% of sheltered workshops employees left to take a job in the community.

• Individuals in supported employment who had previously been served in sheltered workshop settings do not show a higher rate of employment as compared to those who had gone straight to supported employment without ever being in a sheltered workshop, and that those who had previously been in sheltered workshops had higher support costs and lower wages than comparable individuals who had never been in sheltered workshop settings.

• The 14(c) sub-minimum wage program is utilized primarily by non-profit or state-operated social services providers – specifically, sheltered workshops – rather than private, for-profit businesses. According to the GAO, 95% of all workers with disabilities being paid less than minimum wage under the 14(c) program were employed by sheltered workshops.