Wage and Hour Division (WHD)
Archived News Release — Caution: Information may be out of date.
Date: Nov. 25, 2014
Contact: Ted Fitzgerald or Andre J. Bowser
Phone: 617-565-2075 or 617-565-2074
U.S. Department of Labor
Wage and Hour Division
Release Number: 14-2904-BOS
US Labor Department secures $300K in back wages for staff and workers with disabilities at Training Thru Placement Inc.
Employer violated rules for subminimum wage rates for workers with disabilities
PROVIDENCE, R.I. -- In a settlement agreement announced by the U.S. Department of Labor, Training Thru Placement Inc., based in North Providence, has agreed to pay a total of $300,000 to more than 100 employees, including workers with disabilities. The settlement resolves findings that, between June 1, 2010, and January 31, 2013, TTP violated the minimum wage, overtime and record-keeping provisions of the Fair Labor Standards Act. The settlement further stipulates that the department on June 12, 2013, retroactively revoked the certificates allowing TTP, subject to specific conditions, to pay workers with disabilities less than the current federal minimum wage.
“TTP failed to meet its responsibilities under the law to some of the most vulnerable workers we see. This settlement, plus the earlier revocation of its certificates, resulted from our ongoing commitment to remedy labor violations and protect the rights of workers with disabilities,” said Mark Watson, northeast regional administrator for the Wage and Hour Division. “The law provides workers with disabilities an opportunity to work and receive a paycheck for that work. We will use available enforcement tools to prevent employers from exploiting workers.”
Specifically, the department alleged that TTP failed to properly determine a subminimum wage for each worker, as allowed under Section 14(c) of the FLSA; properly record and pay employees for all hours worked; determine the prevailing wage rates for workers performing similar work in the area; and conduct appropriate time studies to determine subminimum wage rates.
The department also alleged that the company falsified documents to mislead investigators. To redress violations fully under all applicable laws, the agency referred the matter to the U.S. Department of Justice’s Civil Rights Division which, consequently, entered into an interim settlement agreement with the state of Rhode Island and the city of Providence. The agreement resolved violations of the Americans with Disabilities Act for approximately 200 Rhode Islanders with intellectual and developmental disabilities.
Based on the severity and willful nature of the violations, the Wage and Hour Division issued a retroactive revocation of TTP’s authorization to pay subminimum wages between June 1, 2010, and Jan. 31, 2013, during which time the company was operating in violation of the FLSA. As a result, all FLSA-covered employees performing work for TTP during that period are owed no less than the federal minimum wage of $7.25 per hour for all hours worked.
When notified that its authorization to pay workers subminimum wage rates would be revoked, TTP took immediate corrective action to comply with the law. TTP implemented significant changes, including replacing its board of directors and removing or replacing management and administrative staff in charge when the violations occurred. Further, TTP contracted with a new provider of services, FedCap Rehabilitation Services, to assume day-to-day operations, hire new staff and provide training to ensure understanding and compliance with Section 14(c) of the FLSA. In connection with an asset purchase of TTP, FedCap has agreed to assume TTP’s responsibilities under the settlement agreement.
Because of the extent of these corrective actions; its commitment to ensure future protection of its workers; and the results of a follow-up investigation, the division allowed TTP to apply for a new provisional certificate and continue to operate as a Section 14(c) certificate holder under the new management. This allowed TTP to continue to operate with little to no interruption and ensured that workers with disabilities continued to receive their pay and educational and vocational training.
Under the settlement agreement, TTP will pay back wages to workers with disabilities and staff. TTP will provide free benefits counseling to the workers with disabilities who are owed the majority of the back wages, at no cost to those workers, their families and guardians.
The FLSA, in general, requires that covered, nonexempt 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. Since its enactment in 1938, the FLSA has contained provisions designed to promote employment opportunities for individuals with disabilities.
Section14(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 is committed to ensuring that employers with Section 14(c) certificates carry out all provisions and requirements of the program. These strategies include using all available enforcement tools to remedy and deter future violations; providing new compliance assistance materials and tools; and hosting compliance seminars for employers, community rehabilitation programs, advocates, workers and other interested parties.
The investigation was conducted by the division’s district office in Hartford, Connecticut. Trial Attorney Nathan Goldstein of the department’s New England Regional Office of the Solicitor provided legal support.
View information about subminimum wage rates here. For more information about the FLSA and other federal wage 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.
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