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

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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 athttp://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 athttp://www.dol.gov/dol/esa/public/regs/compliance/whd/hrg.htm

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The unmoving labor rate

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Sept. 4, 2001 — Labor Day has come and gone. While pundits worry about rising unemployment rates among the general public, the employment rate for people with disabilities has not changed much since World War II — despite rehabilitation efforts and law, including the 1990 Americans with Disabilities Act.

Why has the employment rate of people with disabilities hovered around 35 percent since World War II? Ending workplace discrimination against people with disabilities was a key aim of the ADA. But it wasn’t a silver bullet. In an article being published this month in the journal Rehabilitation Counseling Bulletin, Jae Kennedy and Marjorie Olney estimate that almost 10 percent of working adults with disabilities faced job discrimination in the early 1990s, despite ADA protections. Read more from the University of Illinois press office at http://www.news.uiuc.edu/biztips/01/09ada.html

As level of education rises, so does labor force participation, and this is true for people with and without work disabilities. However, labor force participation increases much more sharply for people with work disabilities than for those without. To see details, visit the Census Bureau chart athttp://www.census.gov/hhes/www/disable/cps/cps298.htm and look at the Chartbook on Work and Disability in the United States, 1998 athttp://www.infouse.com/disabilitydata/workdisability_2_5.html

More interesting Labor Day facts about work and people with disabilities are available at our website, athttp://www.accessiblesociety.org/topics/economics-employment/labor2001.htm

For in-depth statistics and studies, visit Cornell University’s program on employment and disability athttp://www.ilr.cornell.edu/ped/il/independence/

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Block grant should strengthen families with disabilities economically, says NCD

April 8, 2003 — The Temporary Assistance for Needy Families block grant, first created in 1996 to replace Aid to Families with Dependent Children, is likely to be reauthorized by Congress in the next few months. Advocates are seeking as part of the reauthorization to strengthen protections for parents and children with disabilities participating in these block grant programs.

“It is important that the law establish policies that reflect both the intention and desire of people with disabilities to work, and the reality that certain individuals may still have severe work limitations requiring long-term assistance,” says the National Council on Disability, which has issued a position paper on TANF and people with disabilities. Read paper from NCD.

“While the TANF program is not specifically directed towards individuals with disabilities, research data indicate far-reaching effects of this program on people with disabilities,” says the Council. The General Accounting Office notes that a substantially higher proportion of TANF recipients reported having physical or mental impairments than did adults in the non-TANF population. Many families using the program include a child with a disability.

The Temporary Assistance for Needy Families block grant “presents a great opportunity to creatively design programs that can give parents with disabilities, and parents of children with disabilities, the training and support they need to secure and maintain employment. Some states and communities are already collaboratively working to help people with disabilities prepare for and sustain employment. Greater national emphasis on systemic collaboration and review of policies and legislation among federal, state, and local entities that bring consumers with disabilities to the table and begin dialogue and actions would serve to remove barriers and create real opportunities for people with disabilities to transition from welfare to work.”

“For many people with disabilities, TANF, if appropriately designed, could provide the tools and access needed to unlock doors to opportunity, productivity, and economic self-sufficiency,” says the Council.

The NCD position paper “TANF and disability-importance of supports for families with disabilities in welfare reform” summarizes research about people with disabilities and TANF and some of the proposals being offered for consideration to improve how TANF-funded programs address the needs of families with a member with a disability, and offers recommendations. Read paper.

Disabled workers deserve real choices, real jobs

By Steven J. Taylor

Labor Day, 2002 — Labor Day is traditionally an occasion for celebrating the American worker and, by implication, the value of work. Unfortunately, people with disabilities of working age don’t have much to celebrate.

Not so long ago, work wasn’t even a possibility. People with developmental disabilities and their families had two options: stay home or go into an institution. For adults with disabilities living alone or with their families, sheltered workshops emerged in the ’50s and ’60s as an opportunity to get out of the house and to have something to do during the day.

Much has changed. With the passage of P.L. 94-142 — now known as the Individuals with Disabilities Education Act — children with disabilities were guaranteed the right to a free, appropriate public education. The Rehabilitation Act of 1973 and then the Americans with Disabilities Act in 1990, outlawed discrimination against people with disabilities. Federal and state vocational rehabilitation programs have been established to help people with disabilities enter the work force. Work incentives have been created for beneficiaries of federal disability benefits, and tax credits and deductions have been developed to encourage employers to hire people with disabilities.

Most significantly, attitudes toward people with disabilities have begun to change. To be sure, prejudice and discrimination are still directed toward disabled people. Yet, as a community and society, we are learning that people with disabilities do not need to be put away or segregated and “sheltered” from society. We are also learning that our communities, neighborhoods, schools, and work places are enriched by the presence and participation of people with disabilities.

It’s time to consign sheltered workshops to history. The case against them is strong, not merely on philosophical grounds, but pragmatic ones as well.

Low pay. A 1998 national report indicated that sheltered workshop clients earned an average of $65 per week, while rehabilitation clients working in the competitive labor market earned an average $272. Even for people with severe mental retardation, earnings are significantly higher in competitive employment. Workshop clients earned a weekly average of $37, and workers in competitive employment made $110.

Dead-end placement. Supporters often defend sheltered workshops as a “transitional step” to prepare people to enter the competitive work force. Studies have consistently shown that segregated environments do not prepare people to live, work, or participate in integrated environments. A mere 3.5% of people in sheltered workshops move into competitive employment in a given year. This is one reason why the federal Rehabilitation Services Administration ruled in January 2001 that sheltered workshop placement would no longer qualify as an accepted employment outcome.

Incentive to keep the most productive clients.Sheltered workshops receive funding from a combination of public vocational and rehabilitation programs and contracts from businesses. Like any enterprise, workshops need to provide products of high quality to survive and continue to receive contracts. Workshops have a built-in incentive to retain the most productive and dependable clients. These are precisely the persons most likely to succeed in the competitive labor market, with the fewest supports.

Study after study has shown that people with severe disabilities can thrive in regular employment, given the proper supports. The problem is that the bulk of public funds continue to be channeled into sheltered workshops and other segregated facilities. In 1996, the Arc of the United States recommended, “Federal and state policy shall establish as a workforce development priority, employment of people with mental retardation in competitive settings with supports as necessary.”

Ironically, sheltered workshops seldom have served people with the most severe disabilities. These people are deemed unproductive and unlikely to help them fulfill their contract work.

There is no question that people with disabilities can be productive and dependable workers. I am sure that many clients at sheltered workshops are proud of their work. But wouldn’t those clients be prouder if they knew that they could perform their skills in real places of employment and be included and accepted into the regular work force — just like anyone else? And wouldn’t those businesses and places of employment be enriched by having workers with disabilities on-site, rather than out of sight?

The success of supported work and school-to-work transition programs demonstrate that people with disabilities do not need to be placed in sheltered facilities. Sheltered workshops need to be phased out of existence.

Steven J. Taylor, Ph.D. is Director of the Center on Human Policy at Syracuse University. His e-mail address isstaylo01@mailbox.syr.edu

Why do people with disabilities start their own businesses?

Feb. 13, 2001 — Over four out of 10 respondents to the first-ever national study of people with disabilities who are self employed said they chose the entrepreneurial route because they “needed to create their own job.” A similar number also said they’d chosen self employment with its flexible hours and working conditions “to accommodate a disability.”

And more than half of respondents made initial investments of less than $10,000, say researchers — over half used personal savings to start th eir businesses; only 16% got help from Vocational Rehabilitation.

These are just a few of the findings from a study conduced by the National Institute on Disability and Rehabilitation Research’s Research & Training Center on Rural Rehabilitation Services, connected with the Montana University-affiliated Rural Institute on Disabilities.

“Research has shown that there are nearly as many people with disabilities who own their own business as who work for Federal, state, and local governments combined,” says Rural Institute director Tom Seekins. “When you consider the extraordinary difficulty that people with disabilities have had finding employment, starting one’s own business makes good sense.”

The study’s major findings are online athttp://ruralinstitute.umt.edu/rtcrural/SelEm/SelEmRePrgRpt.htm .

Figures from the 1990 Census show that self-employment is more prevalent in rural than in urban areas (in 1990, 10.2% of the rural population was self-employed versus 6.0% of the urban population) and that people defined by the Census Bureau as having a “work disability” are self-employed at a higher rate (12.2%) than people without disabilities (7.8%).

The Chartbook on Work Disability in the United States reports that:

• Nearly as many people with disabilities report being self-employed as report working for federal, state, and local government combined.
• 14.6% of men with a work disability are self-employed, compared with 9.6% of women with no work disability.
• 9.0% of women with a work disability are self-employed, compared with 5.6% of women with no work disability.

Respondents to the survey were members of the Disabled Businesspersons Association (DBA) and/or individuals who had sought assistance from state Vocational Rehabilitation agencies; thus, say the researchers, it’s likely their responses aren’t representative of people with disabilties as a whole. They call the survey “an opportunity to compare self-employed people with and without disabilities.” and said that what was needed was for “general research on self-employment and business ownership to include questions about the disability status of respondents.”

Contact Nancy Arnold, Ph.D. at nancy@ruralinstitute.umt.edu for specific information about this report.

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More about entrepreneurs with disabilities is available from The Research & Training Center on Rural Rehabilitation Services, connected with the Montana University Affiliated Rural Institute on Disabilities. Of particular interest is “The Emerging Workforce of Entrepreneurs with Disabilities: Preliminary Study of Entrepreneurship in Iowa” by Peter David Blanck, Leonard A. Sandler, James L. Schmeling, and Helen A. Schartz. The paper can be downloaded athttp://www.its.uiowa.edu/law/publications/2000/Entrepreneurship_in_Iowa.doc

Labor Day and People with Disabilities

Labor Day was established in the late 19th century — to provide a “workingmen’s holiday” and later evolved into a tribute to the hard-working men and women of our nation. Discrimination’s role in labor market figures. Why has the employment rate of people with disabilities hovered around 35 percent since World War II? Since 1995, the employment rate for women who are not disabled, has been 80.06 percent; for women with disabilities it is 33.06 percent. Since 1995, the employment rate for men who are not disabled, has been 94.96 percent; for men with disabilities it is 36.21 percent. For graduates of 4-year colleges, the employment rate, both men and women; has been 89.9 percent. For college graduates with disabilities, the employment rate is 50.6 percent. Not surprisingly, given these figures, the median household income for women with disabilities during this time was only $13,974 (as compared to$28,518 for nondisabled women). Disabled men had a median household income of $15,275 (as compared to $31,068 for nondisabled men). These numbers show that people with disabilities are not getting jobs; even when they do get jobs, their income is half what others are making. Why these low employment levels? We have legislation in place to remove barriers that prevent people with disabilities from getting around their communities and into businesses, schools and public facilities. We have laws to ensure that children with disabilities get a quality education. We have the Americans with Disabilities Act to prevent discrimination against people with disabilities on the basis on their disability in gaining employment. The truth is that, although these laws are on the books, they are only very slowly making an impact. America is still not a very accessible place for people with disabilities. Widespread discrimination, rooted in old and pervasive stereotypes, continues to exclude people with disabilities from participation in employment and other activities of social life. According to a study by Susanne M. Bruyere, director of Cornell University’s Program on Employment and Disability, employers who had hired a person with a disability said the most difficult change to make in order to meet that employee’s needs was “changing coworker/supervisor attitudes.” That change was rated as “difficult” by more than twice as many surveyed who had made the change for the next named reason (“changes to management system”), and at a rate of sixteen times greater than those responding who made changes “ensuring equal pay and benefits” for employees with disabilities. That change was rated as “difficult” by more than twice as many surveyed who had made the change for the next named reason (“changes to management system”), and at a rate of sixteen times greater than those responding who made changes “ensuring equal pay and benefits” for employees with disabilities.Unless they knew better, employers might well wonder why they should hire a person with disability who might require extra attention, assistance or have trouble fitting on or getting along with co-workers. Surveys conducted by DuPont Corporation and other companies show that employees with disabilities have lower turnover rates, absenteeism, and high productivity. Successive studies at DuPont Corp. consistently found that 90 percent of employees with disabilities were rated average or better in job performance by their managers. Policymakers struggle to make workable an old tangle of overlapping and sometimes contradictory policies: e.g., for Social Security, being disabled means one cannot work, whereas under the ADA disability is not an impediment to working and holding a job. Currently, the federal and state governments are in the process of implementing the Ticket to Work and Work Incentives Improvement Act, a pilot program designed to encourage people with disabilities to get off Social Security benefits and get jobs. A major barrier to that transition is health care coverage. A person on disability benefits is unlikely to leave the government benefits program and venture into the world of work if it means losing health care coverage. And getting health care coverage is no sure thing. This Act will enable participants to go off the benefits program and buy into the Medicaid program to continue medical coverage. This is a positive step forward. But making it possible for more people with disabilities to be available for work is not enough. Employers must be prepared to hire people with disabilities who are qualified to do the job. And they must also ensure that workplaces are accommodating — equipment and facilities for sure, but also the attitudes of co-workers and supervisors. Millions of Americans with disabilities want to work, and are capable of working, and can be productive members of the labor force. Committing ourselves to an inclusive society in which everyone, especially those millions of working-age people with disabilities, has a real opportunity to experience the genuine rewards of labor would go a long way to restoring the real meaning of Labor Day. Discrimination not uncommon in years following ADA passage, say researchersEnding workplace discrimination against people with disabilities was a key aim of the Americans with Disabilities Act passed in 1990. But it wasn’t a silver bullet, at least early on, according to Jae Kennedy and Marjorie Olney, both professors of community health at the University of Illinois. In an article being published this month in the journal Rehabilitation Counseling Bulletin, Kennedy and Olney estimate that almost 10 percent of working adults with disabilities faced job discrimination in the early 1990s, despite ADA protections. Press release from University of Illinois. For more information:Susanne M. Bruyere, Ph.D., CRC, Director Program on Employment and Disability Cornell University School of Industrial & Labor Relations-Extension Division Ithaca, New York 14853-3901 USA Telephone: 607-255-9536 e-mail: smb23@cornell.edu Website: http://www.ilr.cornell.edu/ped/ Peter Blanck Director, Law, Health Policy and Disability Center University of Iowa 319-335-9043 emailpeter-blanck@uiowa.edu Website: http://www.uiowa.edu/%7Elhpdc/ Robert Silverstein, Director, Center for the Study and Advancement of Disability Policy of the School of Public Health and Health Services, George Washington University: 202-223-5340. More background Does labor force participation of people with a work disability differ by education? As level of education rises, so does labor force participation, and this is true for people with and without work disabilities. However, labor force participation increases much more sharply for people with work disabilities than for those without. Among the work-disabled population, 25 to 64 years of age, only 16% of those with less than 12 years of education were in the labor force. Labor force participation rises to 27.3% for those who completed 12 years of school, increases again to 40.9% for those with 13 to 15 years of education, and reaches 50.6% for people with 16 or more years of education. In comparison, among people in the same 25 to 64-year-old age group who do not have a work disability, 78.1% of those with less than 12 years of education were in the labor force. For those with 12 years of school, the rate was 85.6%; for those with 13 to 15 years of school, 88.2%; and for those with 16 years or more, 89.9%. Labor force participation increases with education level more sharply for those with a work disability than for those without. From Chartbook on Work and Disability in the United States, 1998 More data can be found at the Census Bureau website, including the table Labor Force Status–Work Disability Status of Civilians 16 to 74 Years Old, by Sex: 1998

Unemployment rate for people with disabilities more than 40 percent, Census data shows

LABOR DAY, 2002:
Unemployment Rate for People with Disabilities More than 40 Percent, Census Data Shows
Supreme Court Decisions, Inequities in Job Websites, and Mixed Effects of Federal Government Initiatives Paint Bleak Picture This Labor Day

Only 56.6 percent of working-age Americans with disabilities are employed compared with 77.2 percent of non-disabled Americans, according to recently released Census 2000 figures.

Recruiting on Internet Bypasses Jobseekers with Disabilities.

“Despite the Americans with Disabilities Act and other federal initiatives, high unemployment among people with disabilities remains a huge problem,” says Cyndi Jones, director of the Center for an Accessible Society. “Adverse court rulings and contradictory federal policies that actually make it difficult for people with disabilities to work contribute to this problem, as do people’s attitudes towards what people with disabilities are able to do.”

Three Supreme Court rulings this past term narrowed the parameters of the Americans with Disabilities Act, impeding efforts to create workforce diversity that includes people with disabilities.

Federal policies are often biased in favor of unemployment for people with disabilities. For example, under current Social Security regulations, a person with a disability is allowed to enroll in Medicare but can earn only a few hundred dollars a month — any more, and all benefits could be lost. Likewise, federal and state regulations are still biased in favor of nursing homes and institutional care providers over personal attendant services at home, which forces many people to live in nursing homes instead of at home, where they’d be easier able to obtain employment.

Federal Government Supervisors Mixed in Response to Employees with Disabilities, Survey Finds

“The federal government is meant to be a model employer of people with disabilities,” explained Susanne Bruyere, Director, Program on Employment and Disability, School of Industrial and Labor Relations at Cornell University. “Our recent survey of federal agency supervisors shows a mixed record toward employees with disabilities.”

On the positive side, the survey of three thousand supervisors in 17 major federal agencies found seven percent (approximately 70,000) of the almost one million workers are individuals with disabilities. About one-third of the supervisors surveyed reported that they had hired at least one person with a disability in the past five years. Three-quarters of supervisors have made at least one workplace adjustment for employees with disabilities – and nearly four made four or more — over the past five years. Accommodations most often reported were advocating to make existing facilities accessible or modifying a work environment. Finally, over half of the supervisors reported that it was easy to make changes in the recruitment and pre-employment screening processes to accommodate individuals with disabilities.

On the negative side, less than half of the supervisors are familiar with special government initiatives to hire 100,000 more qualified individuals with disabilities over the next five years. In addition, only one-third are familiar with the kinds of accommodations available for person with disabilities that are applying for jobs or are aware of initiatives to use telecommuting to accommodate those with significant disabilities.

“The fact that so few supervisors are aware of a recent executive order to hire and accommodate individuals with disabilities points to a troubling disconnect – how can these initiatives be effective when so few supervisors on the ‘front line’ are aware of them?” says Bruyere, who conducted the study with William Erickson at Cornell and Richard Horne, from the Presidential Task Force on Employment of Adults with Disabilities in the U.S. Department of Labor.

The 17 agencies account for half of all federal employees in the executive branch of the federal government and include such departments as Agriculture, Commerce, Education and Transportation; the Social Security Administration; and Health and Human Services.

“People with disabilities can work, and they are under-utilized,” said Bruyere. “The number of employees between 55 and 65 will increase 40 percent in the next ten years. As the workforce ages, the number of people with disabilities will grow. The federal government and the private sector in turn will need to be more aware of making the needed accommodations to ensure that their workers are productive and utilized to their full abilities.”

Recruiting on the Internet Often Excludes Jobseekers with Disabilities

Recruiting on the Internet has become one of the primary ways that companies attempt to find employees, as proven by the over 28,500 websites vying for employer job postings and resumes. But a review of literature by Cornell University’s Program on Employment and Disability in the School of Industrial and Labor Relations found web recruiting technology to be of mixed use to job applicants with disabilities.

Web recruiting technology offers great potential to many job applicants, especially those who may have a disability that reduces mobility, as the job search can take place at their own computer. And individuals with disabilities are just as likely to use the Internet to search for jobs as those without disabilities.

However, people with disabilities are less likely to have a computer and Internet access. Worse, according to one of the most comprehensive studies to date of Web accessibility, only 18 percent of the 100 most trafficked job recruiting Web sites were found to be accessible.

Accessibility was determined by BOBBY, a commonly-used evaluation tool to find barriers and determine how accessible Web sites are. The Cornell review was performed in collaboration with the Washington Business Group on Health, the Society for Human Resource Management, and The Lewin Group.

“Americans with disabilities want to work, and are capable of working, and can be productive members of the labor force. A commitment to an inclusive society in which everyone, especially those millions of working age people with disabilities, has the opportunity to experience the genuine rewards of labor would go a long way to restoring the real meaning of Labor Day,” says Jones.

Employers reluctant to hire workers with disabilities, says new survey

April 1, 2003 — Only one in four companies in the U.S. employs workers who are known to have disabilities. This is one of the key findings of the latest report from the John J. Heldrich Center for Workforce Development at the Edward J. Bloustein School of Planning and Public Policy at Rutgers University.

The nature of their company’s work is such that it cannot be effectively performed by workers with disabilities, said a third of the respondents.

Restricted Access: A Survey of Employers About People with Disabilities and Lowering Barriers to Work, was released a few weeks ago and is available online as a PDF file. A lack of physical accessibility, lack of experience on the part of disabled jobseekers, employer reluctance to hire a worker with a physical or mental disability, and discrimination are all reasons for this finding, says the report.

“When asked what the greatest barrier to employers hiring people with disabilities, nearly one-third (32%) say that the nature of their company’s work is such that it cannot be effectively performed by workers with disabilities,” write the authors. The report was prepared by K.A. Dixon, with Doug Kruse, Ph.D. and Carl E. Van Horn, Ph.D.

“Many employers do not provide any training to their employees regarding working with people with disabilities,” they write.

From the report:

• Nearly one-fifth (17%) of employers say that lack of skills and experience on the part of the job seeker is the greatest barrier, while 15% cite employer reluctance to hire workers with disabilities.
• Less than half (40%) of employers surveyed provide training of any kind to their employees regarding working with or providing accommodations to people with disabilities. Only 34% of companies with 5-24 workers — the small companies that are 70% of the nation’s employers — provide training to their employees in this area. More than half (52%) of larger companies employing more than 25 workers provide training. Companies that employ workers with disabilities are more likely than those that do not to say they have provided training to their workers regarding working with or providing accommodations to people with disabilities (52% and 34%, respectively).
• The vast majority (73%) of employers report their disabled workers did not require accommodation. Many (40%) employers maintain that it can be difficult or costly to provide accommodations to workers with disabilities — particularly those that have no experience doing so. Smaller firms are more likely than larger firms to agree that it is generally difficult or costly to accommodate workers with disabilities (44% and 32%, respectively). Only 35% of firms who have in fact hired workers with disabilities agree that it is costly to accommodate them.

“Thirteen years after the passage of the Americans with Disabilities Act that mandated greater access to the workplace for people with disabilities, disability remains a barrier to entrance to the workplace,” say the report’s authors. “People with disabilities are underrepresented in the labor market, despite the desire and ability to work.Restricted Access reveals that though many employers are willing to hire people with disabilities, misconceptions regarding hiring and accommodation abound.”

Restricted Access is the fourteenth in the Work Trends survey series, which “polls American workers and employers about issues regarding the economy, the workforce, and the workplace, and how they view the policy choices made by lawmakers to address their concerns.”

The survey and project were directed by the John J. Heldrich Center for Workforce Development at the Edward J. Bloustein School of Planning and Public Policy at Rutgers University, and funded in part by The Rehabilitation Research and Training Center on Workforce Investment and Employment Policy for Persons with Disabilities, which in turn is funded by the National Institute on Disability and Rehabilitation Research.

Restricted Access: A Survey of Employers About People with Disabilities and Lowering Barriers to Work, by K.A. Dixon with Doug Kruse, Ph.D. and Carl E. Van Horn, Ph.D. is available online as a PDF file To download the file go tohttp://www.heldrich.rutgers.edu . For a copy of the report in accessible format or for more information, contact:
Herbert A. Schaffner
herberts@rci.rutgers.edu
Director of Marketing, Communications, and Publications
John J. Heldrich Center for Workforce Development
http://www.heldrich.rutgers.edu

Tax credits have had limited effect on employment of people with disabilities

Feb. 3, 2003 — More than 17 million working-age individuals have a self-reported disability that limits work. Their unemployment rate is also twice as high as for those without a work disability, according to recent Census data. In the Ticket to Work and Work Incentives Improvement Act of 1999, the Congress mandated that GAO study and report on existing tax incentives to encourage businesses to employ and accommodate workers with disabilities.

“A very small portion” of either corporate taxpayers (or individual taxpayers with a business affiliation) use the tax credits to encourage the hiring, retention, and accommodation of workers with disabilities, according to IRS data, says the GAO Report. “Taxpayers in the retail and service industries accounted for the largest share of the work opportunity credits reported in 1999, while providers of health care and social assistance services accounted for the largest share of the disabled access credits.

GAO Report 03-39, a report prepared for the Senate Finance Committee and the House Ways and Means Committte, was released in December. Titled “Incentives to Employ Workers with Disabilities Receive Limited Use and Have an Uncertain Impact,” it found that for the 1999 tax year, businesses reported $254 million in tax credits from the Work opportunity Credit, set up to “encourage the hiring of economically disadvantaged workers, including those with disabilities.”

The Disabled Access Credit, which was designed to help small businesses provide accommodations to customers and employees, allows a business to take up to $5,000 a year. Nearly $60 million were reported to the IRS in 1999 from use of this credit.

However, no figures were available for the Barrier Removal Deduction, said the GAO. This deduction is designed to make businesses and transportation vehicles more accessible and with a $15,000/year maximum allowance, since “usage information” on this was not available to the GAO on the IRS databases they used for their report.

The full report discusses the current usage of the tax incentives, looks at the incentivesÕ ability to encourage the hiring and retention of workers with disabilities, and offers options to enhance awareness and usage of the incentives.

“Information on the effectiveness of the incentives is limited and inconclusive. Only the work opportunity credit has been studied,” says the GAO, “and these studies, along with those of a prior hiring credit, showed that some employers revised their recruitment, hiring, and training practices to increase the number of disadvantaged workers hired and retained, but that credits have also have been claimed by employers for workers they would have hired anyway. However, these studies have not focused on workers with disabilities and data limitations preclude conclusively determining their effectiveness for these workers.

“To increase the awareness and usage of the tax incentives, business representatives and experts on disability issues and tax incentives suggested (1) improving government outreach and education efforts; (2) increasing the maximum dollar amount of the incentives; and (3) expanding the types of workers, businesses, and accommodations that are eligible for the incentives. While these options may increase incentive usage, it is uncertain whether the potential loss in tax revenues would be offset by improvements in the employment of workers with disabilities.”

Read the GAO report (in PDF format only)

Employers know little about tax credits, says study

April 29, 2003 — Human resource professionals in the nation’s top companies know little about the tax incentives available to businesses for hiring persons with disabilities, says a study released in April. They also fear lawsuits over lack of compliance.

The Society for Human Resource Management conducted the survey, Employer Incentives for Hiring Individuals with Disabilities Survey, in conjunction with the Cerebral Palsy Research Foundation, the University of Texas at San Antonio and Wichita State University.

The most-used incentive program, says the study, is theWork Opportunity Tax Credit; however, only 16 percent of companies participating in the survey said they used this. Over three-fourths (77 percent) of respondents said their companies weren’t using any of the incentive programs available for hiring persons with disabilties.

The following tax breaks are available to companies that hire people with disabilities:

• The Work Opportunity Tax Credit, which allows employers tax credits of up to $2,400 for hiring people with disabilities
• The Small Business Tax Credit
• The IRS Code Section 44, Disabled Access Credit, which helps small businesses cover the cost of making their businesses accessible, up to a maximum benefit of $5,000
• The Architectural/ Transportation Tax Deduction: IRS Code Section 190, Barrier Removal, which allows businesses an annual deduction of up to $15,000 for expenses incurred to remove physical, structural, and transportation barriers for persons with disabilities at the workplace.

“Human resource professionals believe the ADA has had a positive impact on changing the climate toward hiring individuals with disabilities,” says the Society, “yet they also believe the ADA has created an increased fear of lawsuits from compliance issues.” The group says it is “the world’s largest association devoted to human resource management,” with more than 170,000 members.

Copies of the full report can be obtained from SHRM’s Frank Scanlan at 703-535-6043 (fscanlan@shrm.org) or Jen Jorgensen, 703-535-6356 (jjorgensen@shrm.org).

Read press release from SHRM

A GAO study drew similar conclusions. Read about study.

More about tax breaks from the Dept. of Labor

More information from National Center on Workforce and Disability

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