Pritzker order aims to end subminimum wage for disabled people in state contracts

[October 05, 2021]  By JERRY NOWICKI
Capitol News Illinois
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SPRINGFIELD – Gov. JB Pritzker signed an executive order Monday that would prevent companies contracting with the state from paying disabled workers at less than the minimum wage.

Pritzker took the action in what he said was a broader effort to try to push federal lawmakers to change the law that allows companies to pay disabled people less than the minimum wage.

“Today, I'm very proud to sign an executive order that will ban state agencies from entering contracts with vendors who pay workers with disabilities a subminimum wage,” Pritzker said at a news conference in Chicago. “With this change, every contract the state of Illinois enters from now on will ensure that people with disabilities receive a wage that affirms the value of their work.”

Pritzker said the order requires state agencies currently contracting with vendors that pay a subminimum wage to renegotiate those contracts. Barry Taylor, vice president of civil rights at the disability advocacy group Equip for Equality, said there would be about 35 contracts renegotiated due to the order.

“To be clear, this wage increase will not cost any employee their job,” Pritzker said. “As we move forward, the state will work with its vendors to ensure that they have the tools they need to continue providing people with disabilities an opportunity to engage in meaningful work with standard pay.”

Specifically, the order applies to the State Use Program, which “encourages all agencies to purchase products and services produced and provided by people with disabilities,” according to the governor’s office.

The State Use Committee, a preexisting unit in state law, will review contract amendments “to ensure they are fair and reasonable and are not substantially more than a competitively solicited price,” according to the order.

The order would only apply to companies contracting with the state. Provisions in the federal Fair Labor Standards Act section 14(C) allow employers to obtain a certificate to hire disabled individuals at less than minimum wage. Private companies in Illinois will be able to continue to take part in that federal program despite the executive order.

Karen Tamley, president and CEO of the disability advocacy group Access Living, said the federal 14(C) program “allows disabled workers to be paid pennies on the dollar for work that's often performed in segregated or sheltered settings.”

“And if we can all imagine the sting of taking home just a few dollars for two weeks work, that's the reality for many in our community,” she said.

Taylor said the federal law dates back to the New Deal era, when it was passed in 1938 in an effort to provide a temporary launching point for disabled workers, before allowing them to “move into competitive and integrated employment.”

But, “that promise didn't happen, unfortunately,” he said at the news conference, “And so people have been stuck in these jobs, in these places, obviously for 80 years now.”

Gov. JB Pritzker signs an executive order Monday aimed at preventing companies contracting with the state from paying disabled workers at less than the minimum wage. At his left is Karen Tamley, president and CEO of the disability advocacy group Access Living. (Credit: Blueroomstream.com)

“What they're doing is technically legal, but we believe its bad public policy,” he added. “And we think the governor’s step today gets the ball moving to eliminate this public policy, and hopefully change the law.”

Taylor said advocates are now calling on the General Assembly “to take the next step, and eliminate the use of subminimum wage for people with disabilities in all jobs.”

In 2019, state Rep. Theresa Mah, a Chicago Democrat, sponsored a measure that would have called on the state’s Department of Human Services to develop and implement a five-year plan to phase out subminimum wage procedures at 14(C)-licensed sheltered workshops. It also would have frozen new 14(C) certificates.

It would have allocated 1 percent of the DHS Division of Developmental Disabilities budget – or $17 million – to assist with the phase out, increasing by another percent each of the next three years.

At the time, advocates said a review of state records showed some certificate holders have paid wages far lower than $1 hourly. They estimated there were more than 100 facilities in the state with 14(C) licenses as of July 2018, and they employed more than 10,000 disabled individuals.

The bill had 31 co-sponsors in the state House, but it ultimately failed to move after being sent to subcommittee early in the 2019 session.

“I'm thrilled to see the governor take this important step,” Mah said in a news release. “I've been working on the effort to abolish the subminimum wage for a number of years now, and I look forward to continuing the work with the governor and advocates so that subminimum wage is no longer permissible anywhere in the state.”
 

Pritzker said about 80 percent of contractors already pay disabled workers the minimum wage, and he agreed that state or federal action is needed to phase out subminimum wage. Illinois’ U.S. Sen. Tammy Duckworth has been an outspoken advocate for ending the 14(c) exemption, he said.

Capitol News Illinois is a nonprofit, nonpartisan news service covering state government and distributed to more than 400 newspapers statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.