National Disability Employment Policy, From the New Deal to the Real Deal: Joining the Industries of the Future

SCOPE: Findings and recommendations are the result of site visits in six states and interviews with over 160 people in 26 states representing people with disabilities, their families, employers, advocates, supported employment service providers, direct support staff, private industry representatives, employer associations, university centers for excellence, technical assistance centers, sheltered workshop providers and their employees, institutions, federal and state agencies, protection and advocacy organizations, entrepreneurs, foundations, and other national and local subject matter experts. From the New Deal to the Real Deal is a follow-on study to NCD’s 2012 report, Subminimum Wage and Supported Employment, in which NCD recommended the phase out of FLSA’s Section 14(c), which in 1938 made legal the payment of subminimum wages to people with disabilities, and the phase in of competitive integrated employment options for people with disabilities. Six years later, NCD renews its previous recommendations; evaluates the progress that the country has made toward that end; highlights the structural barriers that remain; and clearly identifies the risks should service systems not modernize. This report also highlights several successful examples of transformation in which providers have transitioned away from providing services in segregated settings that paid 14(c) subminimum wages to contemporary models of individualized supported and customized employment services that allow people with disabilities to work and thrive in CIE.

SUMMARY: NCD’s study reports on trends regarding American workers with disabilities being paid below minimum wage, recent policy changes impacting this employment model, and characteristics of for-profit entity use of subminimum wage work in their supply chains. The study found federal and state funded employment service providers across the country still grapple with providing employment services within outdated systems in a dynamically changing legal and policy environment. As providers straddle the requirements of new and old laws, providers confront significant barriers, as the intended outcomes of many employment funding sources, programs, and services, still conform to models that were conceived of more than fifty years before the ADA, when legal protections were based in a manufacturing-based economy, and at a time when people with disabilities were largely absent from the labor market altogether and, as a result, employment was conflated with charity. Highlights of the report’s recommendations to improve opportunities for competitive, integrated employment (CIE), self-employment, and entrepreneurship for people with disabilities include:

• Phasing out of 14(c) on a six-year timeline, concurrent with a “phase-up” of systems changes necessary to bring people with disabilities into CIE.
• Department of Labor issuing a two-year moratorium on any new 14(c) certificates
• Increasing oversight of the existing 14(c) system until phase-out is complete.
• Retaining the current definition of CIE used by the Department of Education’s Office of Special Education and Rehabilitative Services’ regulations and guidance to build on systems-change success.
• Amending the Javits Wagner O’Day Act, which requires all federal agencies to purchase certain supplies and services from nonprofits that employ people who are blind or have significant disabilities, to better support employment of people with disabilities in CIE.

The report also makes data-driven observations on the need to build capacity and infrastructure for supported employment services; to change pay structures to promote recruitment, retention and advancement of a skilled labor force that can provide supported employment and related services; and to make improvements to the processes of vocational rehabilitation and other employment service providers who support people with disabilities.