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Fair Labor Standards Act (FLSA) - Certification for Special Minimum Wages

This topic provides general information concerning the establishment of prevailing wages and commensurate wages as they pertain to the employment of workers with disabilities at Special Minimum Wages (SMW). See the Fair Labor Standards Act (FLSA) - Special Minimum Wages topic for an overview of the general provisions of Section 14(c) of the Fair Labor Standards Act (FLSA).

Difference Between Certified And Noncertified Employer

Employers who are certified - who have received a certificate from the U. S. Department of Labor - may choose to pay Special Minimum Wages (SMW) to workers who have disabilities when those disabilities diminish their productivity for the work being performed. A SMW will be lower than the applicable minimum wage required by the FLSA, except in certain cases when the work being performed is subject to the McNamara-O'Hara Service Contract Act (SCA). Without a current certificate, employers must pay workers with disabilities at least the applicable FLSA minimum wage or SCA prevailing wage, where appropriate, for all covered work, regardless of the productivity of the workers.

Applying for a certificate

Employers wishing to obtain a certificate under Section 14(c) must complete and submit the following forms, along with certain required supporting documentation:

·         Application for Authority to Employ Workers with Disabilities at Special Minimum Wages (Form WH-226).
Using this form, the applicant reports information regarding the work that will be performed, the prevailing wage surveys conducted by the employer, and the productivity evaluations conducted to establish the commensurate pay rates the firm pays the workers with disabilities. If workers with disabilities will be paid a SMW for work subject to the McNamara-O'Hara Service Contract Act (SCA), data must also be provided regarding such contract work.

·         Supplemental Data Sheet for Application for Authority to Employ Workers with Disabilities at Special Minimum Wages (Form WH-226A).
This form requires the applicant to list the names of the individuals that will be paid SMWs, identify the disabilities that impair their productivity, and report their average earnings. A separate WH-226A must be submitted for each branch establishment (physically separate location) at which employees with disabilities will receive SMWs.

Instructions for completing the above forms are included on the last page of each form. The forms may be obtained from any Wage and Hour Division Office (see Additional Information section below). In addition, these forms may be viewed and downloaded from the Wage and Hour Division Homepage on the Internet at:
http://www.dol.gov/esa/forms/whd/index.htm#WH-226

Application Submission

The Midwest Regional Office of the Wage and Hour Division is the only office that processes applications under Section 14(c) and issues certificates authorizing the payment of SMWs to workers with disabilities. Completed applications must be mailed to the following address:

U.S. Department of Labor
Employment Standards Administration
Wage and Hour Division
230 South Dearborn Street
Room 524
Chicago, Illinois 60604-1591

Types Of Certificates And Duration

Certificates under section 14(c) are issued to employers on an establishment basis. The certificates will indicate whether the establishment is a work center, also known as a Community Rehabilitation Program (CRP); a hospital/residential care center (a facility that employs patient workers); a business establishment that is not a work center or an employer of patient workers; or a School Work Experience Program (SWEP).

Work Centers

Work Centers - formerly referred to as "sheltered workshops", and now sometimes referred to as "Community Rehabilitation Programs" - historically have provided rehabilitation services, day treatment, training, and employment opportunities at their facilities to individuals with disabilities. Work centers need submit only one application (WH-226), but must include a separate supplemental sheet (WH-226A) for each physically separate branch location where workers with disabilities are employed at SMWs. The Wage and Hour Division will issue separate certificates for each location. Work center certificates remain in effect for two years.

Hospitals/Residential Care Facilities

Hospitals/residential care facilities that employ patient workers may be issued certificates authorizing the payment of SMWs. These certificates remain in effect for two years. If the facility also operates a work center, however, it must apply for a separate certificate for the work center. If the hospital or residential care facility places patients in jobs at business establishments in the community, it must either obtain a work center certificate or ensure that the business establishment has its own certificate if those workers are to receive SMWs.

Business Establishment

A business establishment (not a work center or a hospital/residential care facility) that chooses to employ workers with disabilities as SMWs must also obtain a certificate from the Department of Labor. If the employer has multiple establishments, a certificate must be obtained for each establishment in which workers with disabilities will be employed at SMWs. Business establishment certificates expire annually. But if an individual with a disability is placed at a business by a work center, supervised by work center staff, and carried on the work center's payroll, the business establishment need not obtain a certificate - the authorization to pay a SMW to the worker will stem from the certificate held by the work center. Such placements are sometimes called "supported employment" or an "enclave" worksite.

School Work Exploration Programs (SWEP)

School Work Exploration Programs (SWEP) place students with disabilities who receive SMWs at work sites in the community. Certificates for this program are issued to the school administering the program and expire annually.

Certificate Expiration

Certificates are issued with both an effective date and an expiration date. The certificate, along with the employer's authorization to pay special minimum wages, will expire on the indicated date unless the employer properly files an application for renewal with the Wage and Hour Division before the expiration date. If an application for renewal has been properly and timely filed, an existing special minimum wage certificate shall remain in effect until the application for renewal has been granted or denied. Should a certificate to pay special minimum wages expire and no application of renewal has been properly and timely filed, an employer would be required to pay all workers covered by the FLSA at least the full minimum wage (or where applicable, the full McNamara-O'Hara Service Contract Act prevailing wage) for all work performed after the certificate expiration date.

Certificate Renewal

An expiration date is printed on each certificate. Approximately two months before a certificate expires, the Wage and Hour Division notifies the employer that it is time to apply for a new certificate. Renewal applications are submitted on the same forms (WH-226 and WH-226A) and in the same manner as the initial application. If the renewal application is properly filed with the Wage and Hour Division before the existing certificate expires, the employer's existing authority to pay SMWs continues in effect until the renewal application is either granted or denied.

Certification Processing

Department of Labor Wage Specialists, employed by the Wage and Hour Division's Midwest Regional Office located in Chicago, Illinois, will review each application for completeness, accuracy and compliance with the provisions of the FLSA, including Section 14(c). Once these criteria have been met, the certificate will be issued and mailed to the applicant. In an effort to expedite issuance of the certificate, the reviewing Wage Specialist frequently will contact an applicant by telephone for clarification or to request required supporting documentation. All submitted materials are reviewed to ensure each applicant understands the requirements of Section 14(c) and has achieved and maintained compliance with the provisions of the FLSA. Occasionally, based on the information provided on the application, the Wage Specialists will identify and supervise the payment of back wages due workers with disabilities.

Application Denial And Certificate Revocation

The granting of a certificate is not a statement of compliance by the Wage and Hour Division. Possession of a certificate does not convey a good faith defense should violations of the law occur.

A certificate will be denied if the application is incomplete, makes false statements, or does not include the proper supporting documentation and attestations. If denied, the applicant will be advised in writing and told the reasons for the denial as well as the right to petition under 29 CFR Part 525.18.

SMW certificates may be revoked or an application to renew an existing certificate may be denied if it is found that false statements were made or facts were misrepresented in obtaining the certificate; any of the provisions of the FLSA, SCA, or the terms of the certificate have been violated; or it is determined that the certificate is no longer necessary to prevent the curtailment of employment opportunities for workers with disabilities.

Except in cases of willfulness or those in which the public interest requires otherwise, before an application for renewal is denied facts or conduct which may warrant such actions will be called to the attention of the employer in writing and the employer will be afforded an opportunity to demonstrate or achieve compliance with all legal requirements.

Additional Information

For additional information, you may call the U.S. DOL Wage-Hour toll-free information and helpline, available 8am to 5pm in your time zone, at 1-866-4USWAGE (1-866-487-9243).

You may also visit the DOL Wage-Hour website at:
http://www.dol.gov/esa/whd/

For more information concerning interpretations of the FLSA regulations and enforcement (non-certification) issues, contact your local U.S. Department of Labor Wage and Hour District Office. It is listed in most telephone directories under United States Government, Labor Department. Contact information and service areas, listed by State, are also available online at:
http://www.dol.gov/esa/contacts/whd/america2.htm

For specific certification questions, you may wish to contact the Certification Team member who covers your state at the telephone numbers listed below:

·             (312) 596-7198: California [business establishments and schools only (SWEPs)], Colorado, District of Columbia, Florida, Guam, Illinois, Iowa, Kansas, New Jersey, Oklahoma, Pennsylvania, Puerto Rico, Rhode Island, and the Virgin Islands.

·             (312) 596-7199: Arizona, California (community rehabilitation centers and hospital/residential care facilities only), Connecticut, Delaware, Idaho, Indiana, Maine, Montana, Nebraska, North Dakota, Tennessee, Texas, Vermont, Virginia, Washington, and Wyoming.

·             (312) 596-7200: Alabama, Arkansas, Hawaii, Louisiana, Maryland, Michigan, Missouri, Nevada, New Hampshire, North Carolina, South Carolina, Utah, West Virginia, and Wisconsin.

·             (312) 596-7202: Alaska, Georgia, Kentucky, Massachusetts, Minnesota, Mississippi, New Mexico, New York, Ohio, Oregon, and South Dakota.

Also see:

Fair Labor Standards Act (FLSA) - Overview

Fair Labor Standards Act (FLSA) - Coverage

Fair Labor Standards Act (FLSA) - Exemptions

Fair Labor Standards Act (FLSA) - FAQ

Fair Labor Standards Act (FLSA) - Child Labor

Fair Labor Standards Act (FLSA) - Special Minimum Wages

Source

Information for this topic was drawn from the U.S. DOL website at:
http://www.dol.gov/esa/regs/compliance/whd/hrg.htm
http://www.dol.gov/esa/sec14c/index.htm
http://www.dol.gov/esa/regs/compliance/whd/whdfs39a.htm

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