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Minnesota would become the fourth state in the nation to prohibit employers from paying people with disabilities less than the state’s minimum wage, under a proposed measure that would phase out the decades-old practice by 2024.

The legislation, which passed a state House committee this week, would force dramatic changes at approximately 100 centers across the state, known as sheltered workshops, that benefit from a loophole in federal labor law that allows them to pay people with disabilities based on their productivity, rather than a fixed hourly rate. In many cases, their pay amounts to just cents an hour for basic tasks, such as packaging merchandise, scrubbing toilets and shredding paper. These state-subsidized workshops, which provide a broad range of support services, employ nearly 10,000 people with disabilities — among the most of any state, according to Minnesota workforce officials.

The practice of paying subminimum wages began in the Great Depression as a way to give people with disabilities a chance to learn job skills. But in recent years, the practice has come to be seen as discriminatory, exploitative and a violation of civil rights under the landmark Americans with Disabilities Act. A Star Tribune investigation in 2015 found that many of those in Minnesota’s workshops spend years toiling in poverty and isolation with little hope for advancement. A growing number of cities and states have banned or restricted the practice of paying sub­minimum wages, in the hope of integrating thousands of people with disabilities into the general workforce at competitive wages. Two states, Oregon and Rhode Island, have been forced to shutter workshops under legal settlements with the U.S. Department of Justice.

Parents defend workshops

Proponents of the legislation maintain that a gradual phasing out of subminimum wages would enable the state to avoid costly sanctions and would give state workforce officials and families time to develop alternative employment options in the community. “Everyone deserves to earn a minimum wage,” said Jillian Nelson, policy advocate for the Autism Society of Minnesota. “But we can’t just kick people to the streets.”

Still, the measure faces vigorous opposition from many parents of people with significant intellectual and developmental disabilities, who fear their adult children will lose support services and have nowhere to go if the local workshops close. In many smaller towns, these parents maintain, the workshops — sometimes called “day activity centers” — are the only option for community engagement and employment. In some rural communities, workshops are also the primary source of transit, shuttling people to and from work and activities in the community.

They also provide a vital source of social interaction for people who would otherwise be stuck spending their days at more isolating group homes, parents maintain.

At a contentious legislative hearing Wednesday, a number of parents spoke passionately in defense of the workshops and cautioned against hasty action that would force them to close.

“Working for less than minimum wage is a choice,” said Dawn Kovacovich, a retired educator from northern Hubbard County. She has a 28-year-old daughter with autism who attends a day activity center in Park Rapids. “If we take away that choice without first providing an alternative, we are destroying the quality of life for thousands of people.”

Anita Maloney, a 23-year-old with an intellectual disability from southern Minnesota, exemplifies the challenges many young Minnesotans with disabilities face as they seek mainstream employment at competitive wages.

Gregarious and energetic, Maloney sought work soon after graduating from a vocational training program after high school. She landed a job bagging groceries at a Hy-Vee supermarket in Owatonna, but Maloney discovered she could not handle the routine heavy lifting.

Soon after, she went to work busing tables at the Kernel Restaurant in Owatonna, a job she liked. But after a couple of months, Maloney was told the restaurant did not have a position for her, which left her feeling dejected, she said.

“I was really, really — I mean, how would you say this? — proud of working there. Very proud,” Maloney said of the restaurant job. “I was sad when they said it was not a good fit.”

Lacking other options, she now goes every weekday morning to a sheltered workshop in Owatonna where she does light assembly work. Twice a week, she and others at the center travel in a van to a Hormel plant in Austin where they assemble cardboard trays for cans of Spam. She is paid on a “piecework” basis, which means her income is based on the quantity of trays she assembles every hour.

In a productive week, Maloney can make as much as $200. But on days when she does not go to Austin, she said she often has nothing to do except play with puzzles and talk to others at the center.

Maloney said she hopes for a regular job one day, perhaps at a veterinarian clinic or animal rescue center. At the same time, she fears losing the friends she’s made at the local workshop. “I think I’m going to stick where I’m at right now,” Maloney said. “I have friends here, and there are nice people to be around.” Still, she said of her time at the workshop, “I do get bored. I mean, really, really bored.”

‘Sweatshops’

Overall, researchers have found the more segregated the workplace setting, the lower the earnings and the lower the quality of life. In a 2018 state survey of people with disabilities, those who reported earnings from workshops in Minnesota made a mere $63 a week, compared with $150 for those who held competitive jobs in the community. They also reported lower levels of participation in the broader community, the survey found.

Alex Jaffe, 32, who has Asperger syndrome and attention deficit hyperactivity disorder, said he was required to attend a sheltered workshop in Eagan for nearly two years as a condition of his stay at an adult foster care home. At the workshop, Jaffe did menial tasks such as placing zip ties in plastic bags and sorting cereal boxes.

Sometimes when orders were slow, he said, workers would be asked to undo packages and repeat work that had already been done, which he found demeaning. Jaffe said he was typically paid between $100 and $200 a week.

“Sheltered workshops are an industry that is built on the blood and sweat of a vulnerable population,” said Jaffe, who now works as a security guard and stand-up comic. “They are essentially sweatshops in our backyard.”

No one asked them

For decades, state officials in Minnesota had little knowledge about the thousands of people in sheltered workshops, their aspirations and how they ended up there. That began to change with the 2014 passage of the federal Workforce Innovation and Opportunity Act. The law required that young people be evaluated for regular work in the community before being steered to subminimum-wage labor.

In addition, the law mandated that the state vocational rehabilitation program or its representatives meet face-to-face with adults 25 and older in sheltered workshops at least once a year to gauge their interest in pursuing regular jobs at competitive wages.

In 2019, staff interviewed 9,900 people with disabilities in workshops across the state. Of these, 1,635 people, or 17% of the workshop population, indicated they were interested in competitive work in the community, according to the state Department of Employment and Economic Development.

“We have a huge population of people for whom it was just assumed that they didn’t want to work in the community — but no one had even talked to them,” said Noah McCourt, a disability rights advocate and former employee of a sheltered workshop.

The proposed legislation calls for a task force to develop a plan to phase out payment of subminimum wages in Minnesota by Aug. 1, 2024.

Chris Serres • 612-673-4308

Twitter: @chrisserres

9,900

Number of people working at subminimum wages in Minnesota

100

Number of sheltered workshops in Minnesota

$63

Average weekly earnings of workshop employees