Part 2 of the report from the Bangor News..
Employers nationwide have been found to incorrectly pay their workers with disabilities. Between 1997 and 2016, there were 77,855 subminimum wage violations across the country, requiring employers to pay their workers with disabilities about $16.5 million in back wages, according to the U,S, Department of Labor's enforcement data.
"There's all sorts of ways you can get in trouble if the federal government or the state Department of Labor chose to really dig around," said Gail Fanjoy, with KFI. "It's a lot to go through to not pay people minimum wage."
Congress has moved to limit the use of sobminimal wages nationwide by requiring workers currently being paid one to receive information about job-help services available through their state Division of Vocational Rehabilitation programs, which can match them with training, adaptive equipment, experiences to learn on the job and, eventually, higher-paying jobs for which they can apply. The new rules require workers to meet with vocational rehabilitation staff no later than July 22, and once a year thereafter.
As of July 10, about two-thirds of people receiving subminimal wages at Skills had been told about vocational rehabilitation services, said Julie Rabinowicz, the director of policy and earning minimum wage or better, and are therefore planning to apply for services with vocational rehabilitation,' she said.
Johnson said Skills "fully supports" vocational rehabilitation services "to integrate folks with intellectual or any type of disability into competitive employment."
At Skills, workers paid the subminimal wage are also residents of its day programs. They typically work 10 hours a week- two hours a day, Monday through Friday, according to the 2015 investigation report. Skills also offers in-home assistance to people with disabilities, such as help taking medications or house cleaning, if they are living independently or in group homes.
Though they can an do earn more than minimum wage based on their productivity, Skills' clients currently work for a subminimal wage in three areas, Johnson said: as custodial staff, making and assembling goods under contracts with outside companies, and sorting goods for Skills Inc. Thrift Store. All employees who dismantle and refurbish computers for Skills' eWaste Alternatives computer recycling program earn at least the state minimum wage, in addition to those who work at the front of the thrift store.
Currently, most of the people earning subminimum wage work behind the scenes at the thrift store- "some of whom have been working in support of the store for a very long time, love their jobs and have come to rely on the money they earn," Johnson said. The store has operated at a loss for years.
Subminimum wage, Fanjoy argued, is unfair from the start. "No one times me in my job and pays me less than a fellow executive director. The rest of society doesn't operate like that," she said. "There's this huge population of people, often with intellectual and developmental disabilities, that are subjected to those kinds of archaic practices, put in positions that they're lousy at by virtue often of their disability, and paid sub-standardly."
Having a sawmill as a program of a nonprofit raised questions for Gloria Vollmers, a professor of accounting at the University of Maine who reviewed information from Skills' 990 tax forms filed with the IRS.
At issue is whether the sawmill employed enough people with disabilities to warrant it being a nonprofit service. "Where does the gray area end in which you can have a business within a nonprofit and still call it a nonprofit?" she said.
Between tax years 2006 and 2015, the sawmill employed an average of 10 people with disabilities each year at subminimum wage, out of roughly 30 to 40 employees total, according to the 2010 and 2015 investigation reports.
Martin, who oversaw their work, received $148,109 in tax year 2006. While the workers with disabilities continued to earn less than minimum wage, his compensation rose each year, and in tax year 2008 he started collecting a portion of the mill's earning. Between tax years 2009 and 2013, he received an average bonus of $211,156 per year on top of an average salary of $113,300.
"That just struck me as stunningly high," Vollmers said.
Martin could not be located for comment. Johnson declined to provide his contact information, and no phone number or email was publicly available.
A small-sized sawmill in Maine started collecting a share of sawmill revenue, Davis also started receiving a bonus based on the performance of Skills' business enterprises. He received 10 percent of the net earnings of several of the organization's enterprises. In tax year 2011, Davis began earning an additional bonus of 10 percent of the mill's net earnings, according to the tax forms. On average, these bonuses netted him an additional $29,700 per year in addition to his base salary of $120,000, not including benefits, for four years.
"Any nonprofit makes a profit, but they make a profit that is plowed back in the organization, so you don't generally give it to the director or managers as bonuses," said Carolyn Ball, an associate professor of public policy and management with the Muskie School of Public Service at the University of Southern Maine.
Paying high salaries and awarding bonuses is not illegal, Ball noted, but it does raise further questions about how an entity is using its money to serve clients.
These concerns were echoed by Fanjoy, of KFI, after she learned about the extent of the bonuses.
"When we had a thrift store, for example, then the money would come into the organization," she said. "I can't imagine why you would set it up to benefit any one person, especially an administrator."
The Skills board's choice to allow bonuses came at the expense of the bottom line. In tax year 2013, Skills ran almost $500,000 in the red. This was the same year Davis and Martin collected their highest salaries.
"They paid themselves and not their agency," Fanjoy said. "(The board members) totally, absolutely failed to do their job."
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Today, the sawmill is showing that it's possible to pay people with disabilities a minimum wage and still stay in business.
When Martin, the mill manager, left in tax year 2013, Robert Zelie, who had worked with Skills as a log buyer, took over operations. Under Zelie, workers with disabilities received a raise in pay; all employees were making at least minimum wage by January 2015.
Davis, the CEO, retired in 2016, the same year Skills sold the sawmill to Zelie, who has continued to employ workers with disabilities without using subminimum wage. They are still employed there today, making the same wages as their coworkers without disabilities.
"When I bought the mill, I bough it in the spirit of maintaining employment for these people," Zelie said. "We're still trying to do it with people in mind and employment, not so much just the bottom line."
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