Companies violate law in paying sub-standard wage, says GAO report

Apr. 24, 2001 -- Migrant workers at a turkey processing plant which had been "certified" to pay its workers less than the minimum wage since they had been labeled as having mental retardation were receiving as little as $60 a month in cash for their work, says an audit from the General Accounting Office.

The Fair Labor Standards Act includes a provision for paying a lower minimum wage to "those whose earnings or productive capacity for the work to be performed is impaired by a physical or mental disability." Nearly half a million workers nationwide were paid these sub-standard wages in FY 1999, says the March, 2001 report, which can be downloaded in pdf format at http://www.oig.dol.gov/public/reports/oa/2001/05-01-002-04-420.pdf

Employers who wish to pay only this "special minimum wage" must be certified by the Wage and Hour Division of the U.S. Department of Labor 's Employment Standards Administration. The papers the turkey processing plant had filed with the Wage and Hour Division to maintain their certification reported that the workers were paid $5.65 an hour -- and the Wage and Hour Division's method of review, says the audit, was merely to look over papers filed by employers -- a method that offers "little assurance that employers are complying" with the law.

To arrive at the $5.65 hourly rate its paperwork showed, the turkey processing company had "totaled all yearly expenses related to the employment of the workers with disabilities, then divided total expenses by the total number of hours worked during the year."

These "included costs that would not be allowed under the Fair Labor Standards Act," said the audit. The company listed "$67,200 per year for the group home" where workers were housed; a home owned by the city for which the company paid $7,200 a year in rent. Other expenses included "$100,000 for construction of a retirement home" and owners' salaries. "One of the owners ran a ranching operation and was not directly involved in the turkey processing operation." said the audit.

Violations the audit uncovered elsewhere included "institutionalized patient workers" diagnosed with schizophrenia who were paid as little as $10 a month and thrift store workers with alcoholism who were being paid far less than nondisabled workers for doing the same jobs.

Learn more about the Fair Labor Standards Act at http://www.dol.gov/dol/esa/public/regs/compliance/whd/hrg.htm

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