Ability One and The 14(c) Requirements
August 12, 2019
Written By: Jeff Hartnett, RVP SCA Markets
I recently attended a Department of Labor sponsored Prevailing Wage seminar where many of the sessions were geared toward new contractors. The last session I listened to discussed the 14(c) requirements and the major changes that have occurred.
Ability One contractors, through a certification
process, could have employees who are severely disabled receive wages that are
less than the federal minimum wage. I have read news stories that reported this
violation of the federal minimum wage law, among other violations. Most of
these reporters are unaware of the legislation in place that allows this to
occur and write salacious reports about the employers involved. There are valid
concerns that the goals of the AbilityOne program are out of alignment with the
goals of subsequent legislation for the advancement of the disabled community,
particularly full integration goals within the community. But, for those that
don’t know about the program in general, here is some background.
The Ability One program seeks to create
employment opportunities to people who are blind or have severe disabilities.
It history traces back to the 1938 Wagner-O’Day Act. Over the years, the US has
advanced the rights of people with disabilities as the economy has progressed
to a digitally driven economy. Congress has only reconsidered the program once
through the 1971 Javitz-Wagner-O’Day Act.
In recent years, the Federal Government has
purchased $3.3 billion annually worth of goods and services from the 527
non-profit agencies that participate in the Ability One program. Since 2008,
the Ability One non-profit agencies have employed approximately 47,000 people
each year who are blind or severely disabled. In order to participate in the
Ability One program, companies need to ensure at least 75% of the direct labor
hours are performed by individuals with severe disabilities.
In the past, The Department of Labor has issued
14(c) certificates to Ability One participants and Non-Profit Agencies, but
changes have occurred this year that intend to eliminate those certificates moving
forward. The 14(c) certificates allow employers to pay workers with
disabilities less than the minimum wage under a federal law dating back to the
1930s. This has always been a point of contention between employers and
disability advocates who feel that integration into competitive employment is
the ultimate goal of these programs. There have been a variety of studies and
commissions that have attempted to study this issue and have provided recommendations
to Congress to update the JWOD Act. Critics believe that the 14(c) certificates
are no longer in alignment with the goals of the American Disabilities Act
among other legislation.
Congress has elected to phase out the 14(c)
certification process, which would effectually make Ability One contracts more
margin thin than they already are. I have reached out to my clients to gauge
the immediate impact of this and they believe it will make supporting these
contracts more difficult. They indicate, and I have personally seen that the
work performed on these contracts in the workshops is supported by additional
staff that monitor these individuals working to ensure a safe and supportive
environment. I have also seen how hard working and dedicated these employees
are with a lower number of average sick or absentee days of work. They take
great pride in their work and it provides them a great sense of purpose to be
At The Contractors Plan, we work with many Ability One contractors and support their benefits administration on Service Contract Act contracts and we will continue to do so. I am offering my own experiences and knowledge to shed light on what these contractors are facing in the ever-changing regulatory environment. I would like to hear from Ability One brokers and clients on the impact this is having on their business and business partners. You can contact me at 512-527-5312.