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By Janel Davis December 18, 2013

Goodwill faces criticism over pay for disabled workers

Workers’ wages have become a lightning rod issue recently.

Fast-food employees have lobbied for an increase in the minimum wage. Earlier this year, Wal-Mart workers protested low wages at the mega store. And President Barack Obama is now backing a proposal by congressional Democrats to raise the minimum wage from $7.25 to $10.10 an hour and tie it to inflation.

The wage discussion has spilled over into jobs for disabled workers as well, with the National Federation of the Blind claiming Goodwill Industries International doesn’t adequately compensate its disabled workers.

The NFB recently organized a public awareness campaign with members of local chapters delivering petitions to Goodwill affiliates nationwide asking the company to change its payroll practices that allow "payment of wages as low as pennies per hour to workers with disabilities."

"For over seventy years, Section 14(c) of the Fair Labor Standards Act has allowed employers to obtain special wage certificates that permit them to pay their workers with disabilities wages far less than the federal minimum," said a news release from the organization.

Is Goodwill really paying some employees pennies per hour? We decided to investigate.

Goodwill Industries is a nonprofit organization that provides job training and placement, among other services, to people with disabilities. The company comprises 165 independent, community-based affiliates in the United States and Canada, according to its website. There are four regional Goodwill offices in Georgia.

When it comes to pay, Goodwill has long faced criticism. Earlier this year, the company was featured on NBC’s "Rock Center with Brian Williams" in a segment claiming that some disabled workers at the company’s Pennsylvania affiliates were paid as little as 22 cents an hour. Forbes reported that some Goodwill workers in Montana earn less than $4 per hour sorting and hanging clothes in stores. Salon and the Huffington Post have also reported on the low wages.

Company officials said the cases highlighted in those reports are special cases and were not indicative of Goodwill’s overall pay scale, which has most workers earning at least minimum wage.

According to corporate officials, only 64 affiliate agencies pay disabled workers below minimum wage and 101 do not, said Chris Danielsen, the NFB’s spokesman. "(Goodwill) says it’s a local decision by each affiliate to pay workers below minimum wage. And that this affects only 7,000 workers; our point is that it should not affect any," he told PolitiFact Georgia.

Critics have also noted the high pay of Goodwill President and CEO Jim Gibbons, who is also blind. An Internal Revenue Service 990 form reports that Gibbons’ pay was more than $508,000 in 2011, plus an additional $217,000 in other compensation. Last year’s report, which is posted on the agency’s website, listed Gibbons’ pay at more than $533,000, plus an additional $99,000 in other compensation.

So how is Goodwill allowed to pay workers below the federal minimum wage? And what about disabled workers at Georgia’s Goodwill affiliates, is their pay also lower than $7.25 an hour?

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In an online response to media reports and questions about its payroll practices, Goodwill Industries highlights the Special Minimum Wage Certificate, authorized under the Fair Labor Standards Act of 1938. This provision, Section 14(c) of the law, allows employers to pay people with disabilities below the federal minimum wage. The organization also produced a position paper on the issue.

"The certificate is not a ‘loophole,’ " reads the Goodwill corporate statement, which goes on to note, "eliminating this program would harm -- not help -- people with significant multiple disabilities."

We called each of the four regional Georgia affiliates covering the Atlanta, Columbus, Macon and Savannah areas to determine their compensation policies.

There are no workers paid below minimum wage at stores or offices in the Macon region, a spokeswoman told us. The region possesses the 14(c) special wage certificate but doesn’t use it, she said. The North Georgia affiliate, which includes the Atlanta area, does not have the 14(c) certificate and pays all its some 2,500 disabled workers at least minimum wage, a spokeswoman said. All workers in the Columbus region are also paid at least minimum wage, and the affiliate does not have the 14(c) certificate allowing for lower wages. More than 30 percent of the 700 Goodwill employees in the Savannah region are disabled, a spokeswoman said. The region does hold a 14(c) certificate but doesn’t use it, and the lowest hourly wage offered employees in the region is $7.75 an hour.

Despite the Georgia results, the state chapter of the NFB has criticized Georgia’s Goodwill affiliates for about two years, asking the regions with the special wage certificates to eliminate them.

Nationally, the NFB is supporting congressional legislation, introduced by U.S. Rep. Gregg Harper, R-Miss., that would repeal the section of the federal law that allows special wage certificates. Georgia Democratic Congressmen Sanford Bishop and John Lewis have signed on as co-sponsors of the bill.

The NFB has started an online petition for Goodwill Industries International to pay its workers a real wage. Thus far, more than 170,000 people have signed on to the petition.

So is the National Federation of the Blind correct that Goodwill Industries pays some disabled employees pennies per hour?

Yes and no.

The international nonprofit, like other organizations that employ disabled workers, is allowed to pay those employees below minimum wage because of a provision of the federal labor law.

For Goodwill, which allows each of its independent affiliates to determine whether to use the reduced wage allowance, the pay scale varies. Some affiliates pay workers minimum wage and even more, while other affiliates do pay extremely low wages, depending on the situation and how much work employees are able to complete.

In Georgia, all four affiliates pay disabled workers at least minimum wage. And two affiliates possess the lower wage certificate, which they could eventually decide to use.

We rate the NFB’s claim Half True.

Our Sources

National Federation of the Blind, news release, "(NFB) to unmask Goodwill’s exploitation of workers with disabilities," Oct. 31, 2013

Phone interview, Chris Danielsen, public relations director, National Federation of the Blind, Nov. 1, 2013

Phone interview, Garrick Scott, Atlanta representative, National Federation of the Blind, Nov. 18, 2013

Phone interview, Jan Bass, marketing director, Goodwill of the Coastal Empire (Savannah, Ga.), Nov. 25, 2013

Phone interview, Elaine Armstrong, director of public relations, Goodwill of North Georgia, Nov. 22, 2013

Phone interview, Julie Bennett, director of communications, Goodwill Southern Rivers (Columbus, Ga.), Nov. 25, 2013

Phone interview, Vicki Mills, marketing director, Goodwill of Middle Georgia (Macon, Ga.), Nov. 25 petition, "Goodwil Industries International: Pay disabled workers a real wage"

NBC News, Rock Center with Brian Williams,"Some workers at Goodwill paid as little as 22 cents an hour," aired June 21, 2013

Forbes, "Does Goodwill Industries exploit disabled workers?" Susan Adams, July 30, 2013

Goodwill Industries International, "Goodwill responds to recent media coverage on special minimum wage certificate," Jun 22, 2013

Goodwill Industries International, position paper, "Employment of People with Disabilities through FLSA Section 14(c)," June 2013

U.S. Department of Labor, Employment of Workers with Disabilities overview, HR 831: Fair Wages for Workers with Disabilities Act of 2013, Rep. Gregg Harper, R-MS, introduced Fec. 26, 2013

Goodwill Industries International, Inc., "Get to Know Goodwill Industries International President and CEO Jim Gibbons," Feb. 17, 2011

Goodwill Industries International, Inc., annual reports, 2012 IRS 990, CEO compensation, page 9; full report

Guidestar USA, Inc, Goodwill Industries International, Inc., 2011 IRS 990, page 18, full report

Huffington Post, "Obama gets behind Democrats’ $10.10 minimum wage proposal," Dave Jamieson, Nov. 7, 2013

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