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July 2013 | Vol. 5, Issue 6
Senate HELP Committee Holds Hearing on WIA
Examining the CFPB After Two Years
DOJ Cracks Down on Rhode Island Service Provider
Pew Poll on Family Caregivers
Senate Special Committee on Aging Holds Hearing on Online Fraud
House Ways and Means Subcommittee Holds Hearing on SSDI
June Employment Profile

Senate HELP Committee Holds Hearing on WIA

The Senate Health, Education, Labor and Pension (HELP) Committee held a hearing on June 20 entitled “Developing a Skilled Workforce for a Competitive Economy: Reauthorizing the Workforce Investment Act [WIA]." The Rehabilitation Act of 1973 (Title IV of WIA) is most widely known for Section 504, which prohibits discrimination against individuals with disabilities in programs that receive federal funding. The Rehabilitation Act Amendments of 1998 are included in title IV of The Workforce Investment Act of 1998. The Workforce Investment Act also includes a newly revised Section 508, which imposes strict requirements for any electronic and information technology developed, maintained, procured, or used by federal agencies.

Witnesses testified to their experiences in preparing and training workers to return to or enter the workforce. Each answered questions as to what should be improved in the next WIA reauthorization. Witnesses were:

  • Steve Partridge , President/CEO, Charlotte Works, Charlotte, N.C.
  • Beverly E. Smith , Assistant Commissioner and State Director for Adult Education, Office of Adult Education, Technical College System of Georgia, Atlanta, Ga.
  • David Mitchell , Administrator for Iowa Vocational Rehabilitation Services, Des Moines, Iowa
  • Alan N. Rosenberg , Vice President, Chief of Staff, and Chief Administrative Officer, Temple University Health System, Philadelphia, Penn.

HELP Committee Chairman Tom Harkin (D-IA) focused his remarks and many of the committee’s questions on the roles that vocational rehab and workforce systems play in disability employment. He sought to understand what about this bill the witnesses wished to see updated or changed.

In his written testimony, Mitchell emphasized that “(VR’s) mission is employment for individuals with disabilities. The focus is on competitive, integrated community-based employment settings. We do this through delivery of vocational rehabilitation services that are individualized, person centered and provided through an eligibility process, not an entitlement program. We also provide these services with qualified staff that can bridge the gap between ability and disability. I want to attempt to briefly discuss a few thoughts regarding the future of Vocational Rehabilitation, which I am quite excited about. There is increasing recognition of the importance of the work rehabilitation providers perform and the impact that work and the outcomes have on our economy, our service delivery system, the lives of the individuals with disabilities we work with and our business partners. “

Partridge emphasized the importance of passing WIA in order to modernize a fragmented and outdated system. He said that local workforce boards must position themselves as the “entry point into a vast national network of workforce resources that includes K-12, community colleges, universities and other federally funded workforce partners. Failing to do so puts America’s competitiveness at risk and leaves us with a fragmented system that is difficult to understand and access.”

An initial discussion draft of the HELP Committee’s reauthorization bill has been released but a bill has yet to be introduced in committee. The House Committee on Education and the Workforce has released separate and vastly different bills along partisan lines.

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Examining the CFPB After Two Years

Two years after Congress created the Consumer Financial Protection Bureau (CFPB) as part of the landmark Dodd-Frank Wall Street Reform Act, there is little doubt that the agency has helped strengthen consumer protections by promoting better-informed financial decisions and shielding consumers from harmful financial practices. This success comes even as the agency continues to face legal and logistic challenges thrown up by opponents.

CFPB was created with the mission “to make markets for consumer financial products and services work for Americans — whether they are applying for a mortgage, choosing among credit cards, or using any number of other consumer financial products.”

On July 17, CFED and the journal Democracy co-sponsored a Capitol Hill Policy Forum to examine CFPB’s impact, with a keynote address by former Harvard Professor and now Senator Elizabeth Warren (D-Mass.). Warren’s vision helped lead to the creation of CFPB.

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DOJ Cracks Down on Rhode Island Service Provider

In a first-of-its kind action involving coordinated efforts by the U.S. Departments of Labor and Justice, legal actions have been taken against the state of Rhode Island, the city of Providence, and a local business for violations of the Fair Labor Standards Act and the Americans with Disabilities Act.

The actions grew out of an investigation by the U.S. Department of Labor’s Wage & Hour Division, regarding improper subminimum wages being paid to people with disabilities working at a private facility-based employment service provider, Training Thru Placement (TTP). The findings by the two agencies resulted in revocation by the Department of Labor (DOL) of TTP’s certificate for an exemption under the Fair Labor Standards Act Section 14(c) and by the Department of Justice (DOJ) of a settlement with the state and city to resolve violations of the Americans with Disabilities Act (ADA) for approximately 200 Rhode Islanders with intellectual and developmental disabilities.

A. DOL revokes TTP’s wage certificate
The actions began with an investigation of the service provider, Training Thru Placement, by DOL’s Wages and Hours Division. The investigation found that the company was paying workers with disabilities salaries below even the sub-minimum wage allowed under an exception to the Fair Labor Standards Act that the company previously had received. It determined that TTP “willfully violated” the Fair Labor Standards Act by failing to determine the appropriate sub-minimum wage to be paid as allowed under Section 14(c) of the FLSA, failing to properly record and pay employees for all hours worked, and falsifying documents to mislead investigators.

Since its creation 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 Wage and Hour 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.  Congressman Gregg Harper (R-Miss.) has introduced the Fair Wages for Workers with Disabilities Act of 2013 (H.R. 831),which would repeal Section 14c.

The action by DOL is part of a new focus by DOL’s Wage and Hour Division to increase enforcement efforts to strengthen compliance with Section 14(c).  In response to the severity and willful nature of the violations, DOL issued a retroactive revocation of TTP’s authorization to pay sub-minimum wages, meaning that all work for TTP during that affected time period received no less than the federal minimum wage of $7.25 per hour for all hours worked. After losing its waiver from the Wage and Hour Division, TTP took immediate corrective action to come into compliance with the law and had its Section 14(c) status restored on a conditional basis.  

Perhaps most significantly, DOL referred the case to the Department of Justice’s (DOJ) Civil Rights Division.

B. DOJ Reaches Settlement Agreement with Rhode Island

Following DOL’s referral of the matter, DOJ launched an investigation under the Americans with Disabilities Act (ADA) into Rhode Island’s day activity service system for people with intellectual and developmental disabilities, with an initial focus on the private provider, TTP. The investigation found that the majority of people receiving state- and city-funded employment and daytime services through segregated programs can and want to work and receive services in more integrated community settings, pursuant to their rights under the ADA. 

But the investigation also revealed that a high school-based sheltered workshop was the point of origin for many people entering TTP and that those workers were not in the most integrated setting appropriate for them. DOJ said the school operated a "sheltered workshop" where intellectually and developmentally disabled students worked long hours doing manual labor, including bagging and assembling jewelry, for little or no wages. Students were given little choice but to participate in the workshop, according to the letter to the city, and at least one former student said she was forced to spend full days in the workshop when it had deadlines to meet.

The investigation found that people with with intellectual and developmental disabilities typically remained at TTP all day, segregated from workers without disabilities, packaging and labeling medical supplies, wrapping television remote controls in plastic or hand-sorting jewelry. TTP workers with disabilities make an average hourly wage of $1.57 per hour, with one individual making as little as 14¢ per hour. DOJ also found that students at the school sheltered workshop were paid between 50¢ and $2 per hour, or were not paid at all, no matter what job function they performed or how productive they were, and with virtually no opportunities for students to experience or prepare for real jobs. 

The department also made a finding that people with disabilities at TTP are capable of working in real jobs with supports, and participating in activities in the community, such as volunteering, exercising, taking classes, going to museums, plays and sporting events, none of which was provided by TTP, even after TTP clients had specifically and repeatedly asked for help to find and be supported in real jobs in the community.

Following the investigation and findings, DOJ announced a landmark interim settlement agreement with the state of Rhode Island and the city of Providence that resolves violations of the Americans with Disabilities Act for approximately 200 Rhode Islanders with intellectual and developmental disabilities. 

The agreement is the first of its kind in addressing the rights of people with disabilities to receive state- and city-funded employment and daytime services in the broader community, rather than in segregated sheltered workshops and facility-based day programs exclusively with other people with disabilities. 

The state has now stopped providing services or funding for new participants at TTP’s sheltered workshop and facility-based day program, and the city has stopped providing services or funding to the in-school sheltered workshop.

“The type of segregation and exploitation we found at TTP and Birch is all too common when states allow low expectations to shape their disability programs,” said Eve Hill, Senior Counselor to the Assistant Attorney General for Civil Rights.

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Pew Poll on Family Caregivers

A new poll by the Pew Research Center examining the makeup of family caregivers in the United States finds that the number of adults who provide unpaid care to a child with a health challenge or disability has gone up to 8 percent from 5 percent in 2010. Overall, the poll found that four in ten adults in the U.S. are caring for an adult or child with significant health issues, up from 30percent in 2010. The study also found that caregivers "are highly engaged in the pursuit of health information, support, care, and advice, both online and offline, and do many health-related activities at higher levels than non-caregivers."

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Senate Special Committee on Aging Holds Hearing on Online Fraud

The Senate Special Committee on Aging met on Wednesday, June 19 to conduct an investigative hearing on identity theft related social security fraud issues. This hearing, entitled “Social Security Payments Go Paperless: Protecting Seniors from Fraud and Confusion,” was attended by committee members Senator Elizabeth Warren (D-Mass.), Richard Blumenthal of (D-Conn.), Joe Donnelly of Indiana (D-Ind.) and presided over by Chairman Bill Nelson (D-Fla.).

The following witnesses were called to testify: Alexandra Lane, a victim of Social Security fraud from Florida, Rebecca Vallas, an attorney and policy advocate from the Community Legal Services of Philadelphia, Theresa L. Gruber, the Assistant Deputy Commissioner of Operations of the  Social Security Administration, Richard Gregg, the Fiscal Assistant Secretary of the U.S. Department of the Treasury, and the Honorable Patrick P. O'Carroll, Jr., the Inspector General of the Social Security Administration.

Three central questions were addressed during the meeting:

  • After having successfully switched the benefit receiving method of 98 percent of all seniors from paper checks to online direct deposit, why is the Social Security Administration still forcing the dwindling 2 percent of seniors who are the least tech savvy, the most elderly, and the most vulnerable to online fraud to switch to online direct deposit?
  • Since the Treasury issues a debit card, the Direct Express card, that has minimal fees and a high security level, why are private debit cards that are not required to comply with federal regulations and have low security levels and high fees allowed to receive federal benefits such as Social Security?
  • Why has Treasury paid the creators of the Direct Express card, Comerica, $30 million more than negotiated in 2008 despite not knowing the amount of profit Comerica is making on the cards?

Rebecca Villas, an advocate for elderly disabled clients, testified regarding this point that electronic deposits are not convenient for many of her clients. One of her clients, Juliet, a woman subsisting on less than $700 per month, lost 6 months of payments due to online fraud. This led to Juliet’s loss of her section 8 housing benefits. 

While the Department of the Treasury does allow waivers to be granted under special circumstances, the waiver forms are not available publicly, and they must be specifically requested over the phone and mailed to the office. Only 150 waivers have been granted in all of Florida. Additionally, while the SSA claims that waivers do not need to be notarized, the form contains a field for notorization. Furthermore, the SSA has sent out multiple letters to seniors threatening the suspension of benefits should they refuse to switch to online deposits. With only 3 percent of recipients receiving benefits by paper check, there is little reason to force these last remaining seniors to switch to online deposits with extreme means, Vallas said.

Vallas also testified that the Direct Express card, a product sponsored by the Treasury and issued by Comerica is “a great product.” It has low fees and a high level of security. Private Label cards, however, often have high fees and do not adequately protect against fraud. In addition, the card issuing companies are not required by law to refund victims of online frauds. She recommends that private label cards be banned from receiving SS benefits. Secretary Gregg testified that while he does not have the power to stop the creation and proliferation of private label cards, he may have the power to ban them from receiving federal benefits. Gregg promised Senator Nelsen that he will look into the matter.

Gregg testified that the company Coamerica agreed to create the Direct Express Card, a low fee, easy-to-use debit card for the purpose of allowing recipients without bank accounts to receive SS benefits in 2008. Coamerica agreed to provide this service at no cost to the US government, aiming to generate its revenue through the fees obtained from the cards. The company received support from Treasury for their plan after out-competing several other firms with higher requirements for funding.  However, since 2008, Treasury has paid Coamerica $30 million in relation to the Direct Express Card. Treasury does not know if Coamerica has made profit from the cards and agreed to pay the company after hearing that the number of recipients using the cards has risen to an unexpected 5 million, 4 million more than estimated. Senator Warren asked Gregg to explain why Coamerica would need more funding when the unexpected rise in the number of users should bring the company higher profit. Gregg was unable to answer. Gregg was also unable to answer inquiries as to whether the Treasury would have saved more money by selecting another company to create the card in 2008.

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House Ways and Means Subcommittee Holds Hearing on SSDI

The House Committee on Ways and Means Subcommittee on Social Security, chaired by Congressman Sam Johnson (R-Texas), held a hearing on encouraging work through the Social Security Disability Insurance (SSDI) program on June 19 2013.  The hearing examined the impact of the SSDI program on the economy, efforts by Social Security to return individuals to work, efforts internationally to return individuals to work, and other options to encourage work.

The witness list is as follows:

  • Mark G. Duggan, Ph.D., Professor, The Wharton School, University of Pennsylvania
  • Mary C. Daly, Ph.D., Group Vice President and Associate Director of Research, Federal Reserve Bank of San Francisco
  • Kevin Ufier, National Director Managed Disability, GENEX Services
  • Lisa D. Ekman, Director of Federal Policy, Health & Disability Advocates, on behalf of the Consortium for Citizens with Disabilities Social Security Task Force
  • James Smith, Budget and Policy Manger, Division of Vocational Rehabilitation, Vermont Agency of Human Services, Burlington, Vermont
  • David Weaver, Ph.D., Associate Commissioner, Office of Program Development and Research, accompanied by Robert Williams, Associate Commissioner, Office of Employment Support Programs, Social Security Administration

All but one of the witnesses spoke with the guiding idea that there are too many Americans relying on SSDI, and many of these Americans can become productive members of the workforce given the correct work incentives and prevention tactics. Only Ekman argued that the SSDI “does exactly what it is supposed to do.” She believed that SSDI funding must not be decreased. In fact, she believes in further funding for the program in order to help it run in a more efficient manner. Furthermore, Ekman warned against comparisons of the SSDI program with those of European nations, since different countries present different situations, she said.

Other witnesses suggested different ways of decreasing SSDI spending through their respective expertise. After several senators asked questions regarding SSDI fraud, David Weaver testified that SSDI fraud is not rampant, most recipients, in his experience, do not lie about their conditions. However, the standards for approving recipients may need to become more stringent, he said.

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June Employment Profile

Using BLS Labor data released Friday, July 5, all indicators suggest that June was a difficult month for people with disabilities in comparison with June 2012. A Wall Street Journal analysis shows that the labor force participation rate for people with disabilities decreased from 31.9 percent in June 2012 to 31.4 percent in June 2013 (down 1.6 percent; 0.5 percentage points). The labor force participation rate is the percentage of people who are working or actively looking for work. In contrast, a small decrease was seen among people without disabilities -- from 77.2 percent to 77.1 percent (down 0.1 percent; 0.1 percentage points). "This is evidence that people with disabilities are less engaged in the labor force, when compared to last June," according to John O'Neill, PhD, Kessler Foundation's Director of Employment and Disability Research.

Furthermore, the WSJ points out that the employment-to-population ratio decreased from 27.4 percent in June 2012 to 26.4 percent in June 2013 (down 3.6 percent) for working-age people with disabilities. "This change indicates that a lesser proportion of people with disabilities are working," added Andrew Houtenville, PhD, UNH-IOD Professor of Economics. The employment-to-population ratio, a key indicator, reflects the percentage of people who are working relative to the total population (the number of people working divided by the number of people in the total population multiplied by 100).

U.S. Disability Employment Profile
With Disability
Without Disability
Percent of Population in the Labor Force
Employment-Population Ratio
Unemployment Rate
As reported by the U.S. Department of Labor's Bureau of Labor Statistics, Table A-6

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