Illinois Employer to Pay $573,836 in Wages to 215 Employees In Settlement After U.S. Department of Labor Investigation
STERLING, IL – Rock River Valley Self Help Enterprises Inc. – based in Sterling, Illinois – will pay 215 current and former employees with disabilities nearly $574,000 in back wages as part of its agreement to resolve issues uncovered by a U.S. Department of Labor Wage and Hour Division (WHD) investigation under Section 14(c) of the Fair Labor Standards Act (FLSA).
Section 14(c) of the FLSA is designed to keep job opportunities for employees with disabilities when their disability affects their productive capacity for the work being performed. Under the Section 14(c) provisions, after applying for and receiving a certificate from WHD, the employer may gauge their employees' productivity and calculate the appropriate subminimum wage as a percentage of the rate for experienced employees performing similar jobs in the area.
WHD found that the company – a nonprofit work center that does business as Self Help Enterprises and provides assembly, packaging, and recycling jobs for individuals with disabilities – failed to pay employees correctly as required by Section 14(c) and attempted to mislead and obstruct WHD's investigation by concealing information and hiding work that had not been properly time studied. Due to the nature of the violations and Self Help Enterprises' repeated failure to demonstrate its compliance with the requirements of the law, WHD revoked Self Help Enterprises' subminimum wage certificate in April 2018 and denied its applications to renew its certificate authority.
Self Help Enterprises appealed the decision to revoke its current certificate and deny its applications for renewal, and has subsequently worked with the Department to address compliance concerns. WHD Administrator Cheryl Stanton approved a comprehensive settlement agreement with the firm that resolves all remaining issues in this case. By the terms of the agreement, Self Help Enterprises will:
- Pay $573,836 in back wages to employees with disabilities;
- Provide benefits counseling to employees receiving back wages to ensure those payments do not unduly impact employees' benefits;
- Conduct training for staff on the requirements of Section 14(c);
- Retain an outside consultant to assist with compliance; and
- Submit additional documentation, demonstrating its ability to comply with all requirements, should it elect to re-apply for a Section 14(c) certificate.
"Self Help Enterprises' pay practices denied employees with disabilities the wages they rightfully earned," said Wage and Hour Division Administrator Cheryl Stanton. "As a result of the investigation and actions in this case, this employer has agreed to correct all violation issues and to pay these workers the back wages they deserve."
The Department has taken proactive steps to assist Self Help Enterprises' employees who may be impacted and require additional assistance. In coordination with federal and state partners, the Department's Office of Disability Employment Policy and the Employment and Training Administration have worked with local, state, and federal agencies to identify resources and support for the affected employees in Self Help Enterprises' geographic region, should they be needed. Additionally, law enforcement agencies were notified of this action.
For more information about Section 14(c), the FLSA, or other federal labor laws, call the Wage and Hour Division's toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at http://www.dol.gov/whd.