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Files suit against Montana ranch for violating law, illegally paying as little as $1.17 an hour

WASHINGTON – The U.S. Department of Labor announced new guidance published today by the department’s Wage and Hour Division on important limitations on the payment of subminimum wages under Section 511 of the Rehabilitation Act, which applies to certified employers otherwise authorized to pay subminimum wages to workers with disabilities under specific requirements of the Fair Labor Standards Act.  

Section 511 requires employers with a certificate under Section 14(c) of the FLSA to ensure that workers have received critical resources and information prior to and throughout the duration of employment at a subminimum wage. The timely provision of these resources and information helps maximize opportunities for workers to obtain competitive integrated employment. When employers fail to comply with the requirements of Section 511, they are required to pay workers the full federal minimum wage.   

The new guidance, Field Assistance Bulletin No. 2022-4 “Enforcement of the Rehabilitation Act Section 511 Requirements for Workers with Disabilities in the Section 14(c) Program,” supplements Field Assistance Bulletin Nos. 2016-2 and 2019-1, Fact Sheet 39H and other materials designed to provide guidance on the provisions of Section 511 and the protections it offers workers in the Section 14(c) program. The new FAB reaffirms and provides assistance to stakeholders in determining compliance with the timing and documentation requirements of Section 511.

“Section 511 of the Rehabilitation Act of 1973, as amended by the Workforce Innovation and Opportunity Act, created significant requirements for employers paying subminimum wages to workers with disabilities,” said Wage and Hour Division Deputy Administrator Patricia Davidson. “These requirements help ensure that workers have critical resources and information designed to improve access to competitive integrated employment. The Wage and Hour Division evaluates an employer’s compliance with the Section 511 requirements in every investigation it conducts of an employer that holds a subminimum wage certificate under the FLSA. This work protects the rights of workers with disabilities and ensures they receive the full federal minimum wage when it is owed.”

The Wage and Hour Division has been evaluating and determining employer compliance with the requirements of Section 511 of the Rehabilitation Act since 2016. As evidence of the agency’s continued commitment to vigorous enforcement of the law, yesterday, the department’s Office of the Solicitor filed suit in the U.S. District Court for the District of Montana, Billings Division, alleging the owner and operator of Special K Ranch – a Columbus, Montana, residential and working ranch facility for individuals with intellectual and developmental disabilities – violated the requirements of Section 511.

The litigation follows a Wage and Hour Division investigation that found the employer falsely stated that required counseling and referrals had been provided to workers paid subminimum wages, and that it informed these workers of available training opportunities, when it had not. The employer’s failures required Special K to pay the full minimum wage to legally continue to employ the workers until the workers received the required information and services.

Investigators determined the facility paid 35 employees below federal minimum wage during and after the investigation period. Special K paid the workers as little as $1.17 per hour in violation of the law.

“The U.S. Department of Labor will not tolerate wage theft or an employer’s failure to provide the important services and information required under Section 511 to workers with disabilities,” said Solicitor of Labor Seema Nanda. “Special K Ranch’s alleged violations demonstrate a disregard for the law and disrespect for the dignity of workers. Let there be no misunderstanding, the department will take decisive action to protect the rights of workers employed under Section 14(c) of the Fair Labor Standards Act.”

Employers, workers or other stakeholders with questions about Section 511 of the Rehabilitation Act, the FLSA Section 14(c) program, or other the laws enforced by the Wage and Hour Division are encouraged contact the division’s toll-free helpline at 866-4US-WAGE (487-9243). Calls are answered confidentially, in more than 200 languages, regardless of immigration status.

Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division.

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