Kansas plan may allow paying disabled workers below minimum wage

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Kansas legislators are considering a proposal that many disability rights advocates say would encourage employers to keep paying disabled workers less than the minimum wage, bucking a national trend.

A Kansas House bill would expand a state income tax credit for goods and services purchased from vendors employing disabled workers, doubling the total allowed to $10 million annually. A committee approved it Monday, sending it to the full House for debate, possibly later this week.

Vendors qualify now by paying all of their disabled workers at least the minimum wage, but the measure would allow vendors to pay some workers less if those workers aren't involved in purchases of goods and services to earn the tax credit. Supporters argue the bill would enable more vendors to participate, boosting job and vocational training opportunities for disabled people.

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The Kansas debate comes as employers nationally have moved toward paying at least the federal hourly minimum wage of $7.25. About 122,000 disabled workers received less in 2019, compared to about 295,000 in 2010, according to a U.S. Government Accountability Office report to Congress in January.

Critics argue that below-minimum-wage jobs exploit workers such as Trey Lockwood, a 30-year-old Kansas City-area resident with autism, who holds down three part-time jobs paying more than the minimum wage. At one of them, The Golden Scoop ice cream shop, he greets customers and makes ice cream with a "spinner," a machine he said is like a washing machine. He has money to buy clothes and other things.

"I feel good about that," he said.

His mother, Michele Lockwood, said employers who pay less than the minimum wage aren't fostering independence.

Neil Romano, a member of the National Council on Disability, agreed, adding, "It is very much against the flow of history."

But other advocates and operators of programs questioned about their wages said the severity of some physical, intellectual and mental disabilities mean such programs can't be eliminated without depriving people of valuable opportunities.

Cottonwood Inc., in Lawrence in northeastern Kansas, handles packaging for some companies. Its wages are based on the prevailing industry standard in the area of more than $15 an hour, adjusted for a worker's productivity. As workers get more productive, they earn higher pay.

CEO Colleen Himmelberg said Cottonwood helps workers who need one-on-one support that other employers won't provide.

"They're likely not going to help someone toilet or clean up an accident. There's the reality," Himmelberg said. "But that person can work here and still earn a paycheck."

Pat Jonas, president and CEO of the Cerebral Palsy Research Foundation in Wichita, Kansas, said the goal is a more "user friendly" tax credit program shorn of a big burden for some vendors. If employers currently want to participate, while also maintaining below-minimum-wage jobs as vocational training, they must set up a new, separate company or nonprofit paying workers at or above the minimum wage.

A Kansas proposal would allow vocational institutions paying certain disabled employees below minimum wage to receive tax credits. (AP Photo/Heather Hollingsworth)

"It’s just sad that everyone can’t be pulling in the same direction," Jonas said, adding that the foundation has always paid at or above the minimum wage.

Thirteen states bar below-minimum-wage jobs for disabled workers, including California, Colorado and Tennessee, according to the Association of People Supporting Employment First, which promotes inclusive job policies. Virginia lawmakers sent a bill last month to Republican Gov. Glenn Youngkin, and there’s a bipartisan proposal for a national ban in Congress.

Andy Traub, a Kansas City-area human resources consultant who works with The Golden Scoop and much larger businesses, said there might be a limited place for sheltered workshops, but "not as a default setting." Groups serving the disabled ought to be required to help them try "competitive" jobs first, he said.

The federal law allowing an exemption from paying the minimum wage dates to the 1930s. It is based on the premise that a lower wage offsets an assumed lower productivity among disabled workers and exempted employers must regularly study how quickly employees do their work. The January report to Congress said 51% of exempted employers’ disabled workers make less than $3.50 per hour and close to 2% earn less than 25 cents hourly.

Some advocates argue they're still battling traces of attitudes from decades ago, when many disabled people were put in institutions and not educated.

They cite the mid-February meeting of a Kansas legislative committee that highlighted the tax credit proposal's provisions. The chair of the committee handling the bill, state Rep. Sean Tarwater, a Kansas City-area Republican, defended programs paying below the minimum wage.

"They are people that really can’t do anything," Tarwater told his committee. "If you do away with programs like that, they will rot at home."

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Days later, Tarwater said he was referring to severely disabled people. But his comments appalled national and state disability rights groups.

Connecticut state Rep. Jane Garibay, a Hartford-area Democrat, said being paid fairly is "part of being valued as a human being." She lives with an adult niece with Down syndrome and is sponsoring a bill that would require Connecticut employers to pay workers with intellectual disabilities the state minimum wage, $15 an hour, if they can do a job.

"It’s as if, as a woman, I would get paid less than a man for doing the same job. We’ve been there, right?" Garibay said. "If you’re doing the same job, it should be the same wage."

In the Kansas City area, the nonprofit Golden Scoop ice cream shop opened in April 2021 paying its workers $8, plus tips — higher than the state's $7.25 minimum wage. Amber Schreiber, its president and CEO, praises disabled workers as loyal and enthusiastic. Golden Scoop hopes to open another shop and a plant making ice cream to sell wholesale.

In the Washington D.C. area, a nonprofit, Melwood, phased out below-minimum-wage jobs starting in 2016. President and CEO Larysa Kautz said Melwood had to shut down a print shop with disabled workers doing menial tasks, but it started a recycling sorting service. The organization does government landscaping jobs across the area, and between 900 and 1,000 of its 1,300 workers have significant disabilities, she said.

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The report to Congress in January said the number of employers with exemptions allowing them to pay below the minimum wage dropped to fewer than 1,600 in 2019 from more than 3,100 in 2010. Romano said it should fall to 1,300 this year.

"It requires innovative thinking," Kautz said. "But there are so many of us that have done it."