Rhode Island Company Violated FLSA Provisions Related to Employees with Disabilities

Tuesday, June 18, 2013

The U.S. Department of Labor's Wage and Hour Division has revoked authorization allowing Training Thru Placement, Inc. (TTP), based in North Providence, to pay less than the current federal minimum wage to its workers after an investigation of the nonprofit educational and vocational training center found willful violations of the Fair Labor Standards Act.

The agency found that TTP failed to determine the appropriate sub-minimum wage to be paid to each worker as allowed under Section 14(c) of the FLSA, properly record and pay employees for all hours worked, and determine the prevailing wage rates for workers performing similar work in the area. The company also falsified documents in order to mislead investigators. In an effort to comprehensively redress violations under all applicable laws, the agency referred the matter to the U.S. Department of Justice's Civil Rights Division, which announced an interim settlement agreement with the state of Rhode Island and the city of Providence that will resolve violations of the Americans with Disabilities Act for approximately 200 Rhode Islanders with intellectual and developmental disabilities.

The FLSA, in general, requires that covered employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular rates of pay, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. However, since its enactment in 1938, the FLSA has contained provisions designed to promote employment opportunities for individuals with disabilities. Section 14(c) of the act allows employers, after receiving a certificate of authorization from the Wage and Hour Division, to pay wages less than the federal minimum wage to workers with disabilities when their disabilities impair their productive capacities for the work being performed.

Based on the severity and willful nature of the violations, the division issued a retroactive revocation of TTP's authorization to pay sub-minimum wages between June 1, 2010, and January 31, 2013, during which time the company was operating in violation of the law. As a result, all FLSA-covered employees performing work for TTP during that time period are owed no less than the federal minimum wage of $7.25 per hour for all hours worked. TTP is allowed under the law to file a timely appeal within 60 days.

Upon notification that its authorization to pay workers sub-minimum wage rates would be revoked, TTP took immediate corrective action to come into compliance with the law. The nonprofit has implemented significant changes including replacing its board of directors in its entirety, and removing or replacing the management and administrative staff who were in charge during the time period in which the violations occurred. Further, TTP has contracted with a new provider of services, Fedcap Rehabilitation Services, to assume day-to-day management of operations, hire new staff and provide proper training to ensure understanding and compliance with Section 14(c).

Due to its aforementioned corrective actions, its commitment to ensure future protection of its workers and a follow-up investigation, the division has concluded that TTP can operate as a Section 14(c) certificate holder on a conditional basis until August. This allows TTP to continue to operate with little to no interruption and ensures that workers with disabilities continue to receive income, and educational and vocational training. The division will continue to closely monitor TTP's adherence to the law. TTP's vocational programs provide workers with disabilities opportunities to perform services such as product assembly and packaging, janitorial work, food processing and packaging, and other work.

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