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Presentation (PDF) Open in new window Overview • Fair Labor Standards Act (FLSA) Section 14(c) • For the Repeal • Against the Repeal • Stone Belt • Data Sources • Inputs • Baseline • Minimum Wage Analysis • Assumptions • Conclusions Fair Labor Standards Act (FLSA) Section 14(c) • Stone Belt employees are compensated with a commensurate wage which is “a special minimum wage paid to a worker with a disability that is based on his or her individual productivity (no matter how limited) in proportion to the productivity of experienced workers who do not have disabilities performing essentially the same type, quality, and quantity of work in the vicinity where the worker with a disability is employed. (U.S. Wage & Hour Division, 2009). For the Repeal of 14 (c) • National Federation of the Blind • Arguments • Section 14(c) Discriminates Against People with Disabilities • Does not encourage open-market employers to hire • Does not prepare clients for open-market employment • Wages are not reliably related to worker productivity Source: Bagnestos, 2012 Against the Repeal of 14(c) • Goodwill Industries • Arguments • The repeal would result in thousands of people with disabilities losing their jobs • Significantly disabled persons would be disproportionately affected • Denial of intangible benefits Source: Walling, 2013 Stone Belt • Mission • “We believe in the uniqueness, worth and right to self-determination of every individual. Therefore, it is our mission, in partnership with the community, to prepare, empower and support persons with developmental disabilities and their families to participate fully in the life of the community.” Stone Belt Community Employment Services • Helps clients: • Gain meaningful employment in a community setting • Increase opportunities for developing relationships with others • Increase opportunities for informed decisionmaking • Ongoing performance evaluations to ensure employer/employee satisfaction • Helps employers: • Comprehensive business assessment to identify employer needs • Screening of applicants to ensure a quality job match to reduce turnover • Implementation of incentives such as the Work Opportunity Tax Credit (WOTC) Stone Belt Manufacturing Services • Stone Belt employees are trained in: • machine operation, • materials and small parts handling, • kitting, • light manufacturing, • sub contract manufacturing, • sub assembly, • packaging, • warehousing, • quality control and • industrial hygiene. • Some of Stone Belt’s clients include: • Cook Medical, • Cook Urological, • Walnut Springs Water, • Carlisle Brake & Friction and • Indiana University Data • Stone Belt Financial Statements • Client Individual Program Plans • Community Employment Program Data • Timeframe: May 2013 – April 2014 Inputs 33% = Clients who work in the community and in manufacturing services 17% = Clients who work in manufacturing services but are interested in community employment 50% - Clients who are only interested in working in manufacturing services n=95 Baseline - Per Pay Period $6.83 social benefits per hour worked + $2.66 average hourly pay = $9.49 per hour worked Baseline - Per Pay Period $6.83 social benefits per hour worked + $2.66 average hourly pay = $9.49 per hour worked Minimum Wage – Per Pay Period Over 30 clients who would not become employed in the community and would no longer have work at the Manufacturing Services program Assumptions • Assumptions that result in an underestimate of social benefits • Minimum willingness to forgo • Calculated social benefits are only for clients who do not wish to be involved in Community Employment • We are unable to capture the social benefits for clients who work in the Manufacturing Service program and in Community Employment Conclusions • The social benefits of the manufacturing services program are $6.83 per hour • Combined with the average hourly pay clients receive, clients earn $9.49 per hour • If Section 14 (c) is repealed, over 30 clients will end up unemployed in both the community and in manufacturing services, about 32% of clients who currently participate in manufacturing services Stone Belt • Mission • “We believe in the uniqueness, worth and right to self-determination of every individual. Therefore, it is our mission, in partnership with the community, to prepare, empower and support persons with developmental disabilities and their families to participate fully in the life of the community.” Questions? Contact info: Caitlin (Holmes) Cheek, MPA Candidate caitholm@indiana.edu Appendix A – Baseline Annual Appendix B – Minimum Wage Annual Methodology • Social Benefits = • (Total number of clients – (Clients who work in the community and in manufacturing + Clients who are interested in working in the community)) • (95-(31+11)) • Multiply by ((Difference in average hourly pay)*(Difference in average hours worked per pay period)) • *(($2.66-$8.35)*(31.22-35.49)) • $11,353 • Opportunity Cost = • (Clients who are interested in working in the community*Employment rate for adults with disabilities in Indiana) • (11*.34) • Multiply by ((Difference in average hourly pay)*(Difference in average hours worked per pay period)) • *(($2.66-$8.35)*(31.22-35.49)) • -$90