The City of Providence, the Providence School Board and the Harold A. Birch Vocational Center and School have signed a settlement agreement to pay $250,859 in back wages to 60 student workers with disabilities following an investigation by the U.S. Department of Labor’s Wage and Hour Division that found violations of the minimum wage provisions of the Fair Labor Standards Act. As part of the settlement agreement the department has retroactively revoked the certificate that allowed the school to pay the workers less than the current federal minimum wage for the work performed.

Specifically, the department found that Birch Vocational School failed to determine the prevailing wage rates for workers performing similar work in the area, failed to determine the appropriate sub-minimum wage to be paid to each worker as allowed under Section 14(c) of the FLSA, failed to maintain proper records, and failed to properly pay employees in accordance with the Act.

Rather than calculate and pay wages commensurate with workers’ individual levels of productivity, as required under the terms of a certificate, the employer in this case paid workers flat rates of $1- $2.01 per day, without regard to the number of hours they had worked or to how much they had produced. The company also falsified time-study documents that are necessary to calculate legitimate rates of pay. Student employees were paid sporadically, sometimes going for weeks at a time between paychecks. Birch ceased operation of its work center as of April 12, 2013. While employed by the work center, students performed work assembling, packing and sorting of goods by hand.

The FLSA, in general, requires that covered, non-exempt 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 workweek. 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 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.

The division has been pursuing strategies to strengthen compliance with Section 14(c) and maximize the impact of its benefits for workers with disabilities, their employers, families and communities. These strategies include using all available enforcement tools to remedy and deter future violations; providing new compliance assistance materials and tools; and hosting new compliance conferences for employers, community rehabilitation programs, advocates, workers and other interested parties.

The Wage and Hour Division issued a retroactive revocation of the certificate authorizing Birch to pay sub-minimum wages between June 1, 2010, and June 1, 2013, during which time the school was operating in violation of the law. As a result, all FLSA-covered employees performing work for Birch during that time period are owed no less than the federal minimum wage of $7.25 per hour for all hours worked. The agreement signed by the parties waives any right to appeal this revocation. The employer has further agreed not to pursue another certificate in the future.

This resolution comes just months after the department announced the revocation of authorization for Training Through Placement, Inc., based in North Providence, to pay disabled workers less than the federal minimum wage. That investigation disclosed that the program at Birch served as the point of origin for many people entering the program at TTP. In June the Justice Department also announced that it had entered into an interim settlement agreement with Rhode Island and the city to resolve violations of the Americans with Disabilities Act for approximately 200 state residents with intellectual and developmental disabilities who performed work for TTP and the Harold A. Birch Vocational Center and School.