I can relate to the following story, by Bangor daily News, as it happened to me..(Part 1 of 2)
A Maine nonprofit paid some of its workers with disabilities as little as $2 to $3 an hour, while consistently paying top managers six-figure salaries, according to a Bangor Daily News review of the organization's tax filings and a federal investigation report. One year, the organization paid a manager $570,000, which an accounting expert called "stunningly high."
Skills Inc., based in the Somerset County town of St. Albans, is the only employer remaining in Maine that pays some of its workers with disabilities less than the state minimum wage, under a little known federal law from 1938.
But while it has paid an employee as little as $2,14 per hour, it quadrupled a former manager's salary between tax years 2006 and 2013, ultimately paying him $569,844 in tax year 2013, according to the nonprofit's tax documents filed with the Internal Revenue Service. it was an increase of almost $260,000 over the previous year.
In that time, Skills also more than doubled its then-CEO's salary, paying him a high of $217,696 in tax year 2013. The nonprofit's tax year runs from July 1 to June 30.
Skill offers residential and day programming to people with intellectual disabilities, and its largest source of revenue is Medicaid, which is funded with a combination of state and federal tax dollars. In tax year 2015, Skills reported $13.8 million in total revenue.
the organization also offers its clients jobs for pay that's based on their determined productivity level, regardless of the state's minimum wage, sorting items for its thrift store, cleaning area businesses, and packaging candle wicks and other goods. It used to employ clients at a St. Albans sawmill called Sebasticook Lumber.
"At Skills, Inc. we believe that meaningful employment is one of the cornerstones of a happy life," states its website.
On its tax forms, Skills defines the enterprises where it employs clients, such as the thrift stores and lumber mill, as programs of the nonprofit, which means the organization can funnel any revenue it receives back into its operations.
But the former mill manager, Vernon Martin, received an annual bonus of 25 percent of the sawmill's earnings between tax years 2009 and 2013 instead of returning that revenue to the organization, according to the nonprofit's tax forms. In tax year 2013, Skills ran almost $500,000 in the red, while Martin collected his largest paycheck yet.
Former CEO Tom Davis also received a bonus starting in tax year 2009: 10 percent of the earnings of the nonprofit's thrift stores, kennel and cleaning service. In tax year 2011 Davis started earning an additional bonus of 10 percent of the sawmill's earnings. Skills sold the sawmill in 2016.
"We acknowledge that not all decisions made were the best decisions and some of those decisions created unplanned, unforeseen and unintended programmari property tax on the facility due to its nonprofit status, according to the St. Albans town office.
While the Skills board of directors allowed the two nonprofit administrators to receive a combined $3.44 million over seven years, the nonprofit was violating the subminimum wage law. Skills accrued 75 violations between 2001 and 2016 as a result of insufficiently paying its workers with disabilities- the most of any other Maine employer in that time, according to U.S. Department of Labor enforcement data.
Sills' financial and operational details, gleaned from public records, show the latitude employers have to make decisions about the compensation of people with disabilities. They also call into question the validity of a law that allows employers to pay people less "whose earning or productive capacity is impaired by a physical or mental disability, including those relating to age or injury," if the employers can prove the workers are not as productive as others.
"Even if they paid (workers) minimum wage, that's outrageous. That's just unheard of," said Gail Fanjoy, when told about the salaries and bonuses paid to the Skills administrators. Fanjoy is a board member of the Maine chapter of the Association of People Supporting Employment First, and is executive director of KFI, which provides job coaching and day programs to people with disabilities. "I'm absolutely speechless."
Johnson, who served as Skills' director of finance from 2010 to 2016, when she took over as executive director, said Skills' financial history is " not relevant to who we are today. We're a lot different than we were back then."
She noted that Davis, as the CEO during that time, and the board of directors were responsible for decisions about compensation.
"The board acknowledges that more attention should have been given to monitoring and adjusting those plans and changes should have been made in a more timely fashion," Johnson wrote in an email.
As the director of finance, Johnson earned an average salary of $80,000 between tax years 2011 and 2015. As executive director, she does not receive a bonus based on program revenue, she said.
The organization couldn't employ as many people with disabilities if it didn't pay them a subminimum wage, she said. It currently employs 47 people at subminimum wages, according to Johnson.
The chairman of the board, Jack Dyer, did not return four phone calls. Five other board members, who were responsible for reviewing performance and approving compensation, declined to comment or did not return phone calls. Davis did not return five phone calls over three weeks.
***************************************************************************
The subminimum wage was first established by the Fair Labor Standards Act of 1938. Maine and other states have gradually moved away from the practice. New Hampshire became the first state to abolish the subminimum wage in 2015, and fewer Maine employers have been using it in recent years.
In 2013, 13 Maine employees obtained subminimum wage certificates-which are good for two years- from both the U.S. Department of Labor and the Maine Department of Labor to allow them to pay subminimum wages, according to the Maine Department of Labor. In 2015, eight employers were authorized.
Today, Skills is the only one paying employees a subminimum wage after Pine tree Society stopped using it July 1. "We believe in discovering people's abilities and helping them grow and live more fully," said terry Berkowitz, the chief operating officer at Pine Tree Society, which serves children and adults with disabilities. "We just felt like the subminimum wage doesn't... align well with that general philosophy."
The practice of paying people with disabilities less than minimum wage has been heavily debated in disability rights circles in Maine and around the country, with employers arguing it allows some people to have job opportunities they otherwise wouldn't qualify for. Others decry it as discriminatory and outdated, and as pushing people around menial tasks when more rewarding jobs exist that could be better suited to their strengths.
Employers decide how much to pay people with disabilities by timing them at certain job tasks and then comparing their speed to the speed and pay of employees without disabilities elsewhere That means the subminimum wage employer must call at least three other firms to devise an average baseline wage, say, for cleaning a bathroom. It then compensates its workers with disabilites at a commensurate level- for example, paying them half of the baseline wage if they take twice as long to clean a bathroom as workers without disabilities. There is no minimum amount workers with disabilities can earn.
What has been less debated in Maine is the limited government oversight over employers paying people subminimum wage. It's largely up to the employer to set wages, which legally could be as little as a few cents per hour; there is no independent approval or review of the pay rates. The Maine Department of Labor foes not know which individuals receive subminimum wage, nor does it check to ensure workers are in positions that best suit their abilities.
It's often only when there's a complaint and subsequent investigation that families and communities can know how people who are blind, or have Downs Syndrome or autism, are faring at work.
"We have to go on the same system , the same methodology that we use for every other employer in the state of Maine." said Pam Megathlin, the director of the Bureau of Labor Standards at the Maine Department of Labor. "it's just like any other wage-and-hour law. We are not out there knocking on the door of every employer to make sure they're in compliance every day."
Between 2001 and 2016, the U.S. Department of Labor investigated nine Maine employers and discovered a total of 292 subminimum wage violations; the department required back pay of about $42,800 to 213 employees. Skills accumulated the greatest single number of wage violations; 75, according to the U.S. Department of Labor.
Most of Skills'violations of the Fair Labor Standards Act occurred between 2013 and 2015. At the time of the federal investigation in 2015, Skills employed 80 workers across seven programs who were eligible to be paid subminimum wage. Of those 80 workers. .70 were improperly paid.
to the investigation reports requested under the Freedom of Information Act. Investigators found Skill made math errors when computing the wages, and failed to conduct time studies every six months, as employers are required to do. In some cases it didn't conduct time studies at all. It also didn't keep records of the results of certain time studies, appeared to have copied results from previous time studies and didn't adjust wages after conducting studies. Investigators also found that Skills improperly conducted wage surveys, such as by not contacting enough outside employers or not providing their sources' contact information as they're required to do.
Davis, Skills' CEO at the time of the investigation, told investigators that the violations might have resulted from the "decentralized nature" of Skills' operations, according to the 2015 investigation report. Each program was in charge of handling its subminimum wage operations. In some cases, workers either did not have the training to follow the subminimum wage requirements, or they did not do work they were supposed to do.
"Yes, we did have some compliance issues that needed to be addressed," Johnson, Skills' current executive director, said. "We did address them immediately and implemented a new system of controls and protocols and procedures to make sure that those deficiencies did not happen again. All compensation and pay was appropriately corrected."
it was the eighth time Skills, or one of its programs, had been investigated by the U.S. Department of Labor. A 2010 investigation resulted in five subminimum wage violations for Sebasticook Lumber. A 2001 investigation into Sebasticook Farms found one violation. (Sebasticook Farms was the former name for Skills before it merged with Ken-A-Set, a thrift store, in 2005). Three investigations into Ken-A-Set in 1992 found 51 subminimum wage violations.
Two other investigations found no subminimum wage violations but did find one violation of the Family and Medical leave Act for Skills' failure to reinstate an employee after that employee took leave.
After all the investigations, Skills owed its subminimum -wage employees back wages totaling $38,879.
To be continued.
No comments:
Post a Comment