Democratic Gov. Jerry Brown's recent hike in the state's minimum-wage has caused panic in Ceres' Howard Training Center and similar centers in the state which may be forced to cut work training programs for developmentally disabled persons.
A special workshop luncheon was held Thursday at the Ceres facility to bring lawmakers' focus on the problem, and to develop possible legislative solutions. Attending were Congressman Jeff Denham, Assembly members Kristin Olson and Adam Gray and representatives of state Senator Anthony Cannella, and Assembly members Cathleen Galgiani and Tom Berryhill. Besides HTC officials, the event was attended by representatives of United Cerebral Palsy, Valley CAPS, Kingsview Work Training Center and Porterville Training Center.
The state minimum wage triggered the problem. Barry Jardini of the California Disability Services Association told the gathering of legislators in Ceres that centers which train and employ disabled are impacted also by the federal Workforce Innovation Opportunity Act (WIOA) enforced by the U.S. Department of Labor. The act places limitations on 14C program employees paid a commensurate wage. The federal act has triggered the state to require career counseling for about 22,000 14C certificated employees in California in order to be paid a commensurate wage, otherwise be paid minimum-wage. The California Department of Rehabilitation (DOR) is in the process of hiring only eight career counselors to train 22,000 people by July 22, 2017, which is a logistics nightmare.
"There is a grave concern that if the DOR can't meet this mandate, we don't know what services will be available to these individuals who are working today, earning money, learning skills that are helping to put them on their path to employment, wherever that may be ... come July 22, 2017," said Jardini.
Also impacted are disabled workers who are 24 and younger. Any disabled persons who started a job after July 22, 2016 was required to receive services before they can start employment; but because the Labor Department and DOR did not notify clients of the changes, some were told they have lost their jobs.
"They not only lose their jobs," said Jardini, "but now they're in a holding pattern. They're not going to get services until the Department of Rehabilitation can give them the free prerequisite services prior to getting them started on the job. Those people are basically sitting home, potentially not receiving any additional services."
Employers also had to make up the difference between the commensurate wage and state minimum wage as a result, causing financial hardships.
The new regulations threaten the contract services which disabled persons provide. For example, in Ceres, the city contracts with HTC which puts clients to work maintaining and cleaning up landscaping along public rights-of-way and along sound walls. The crew also is contracted to clean up freeway rest stops on Highway 99 south of Turlock and on I-5.
"Unless the Department of Rehabilitation steps up, we are going to have a real crisis on our hands in July of next year," said Jardini.
He asked the legislators to apply pressure to the state to remedy the situation, such as offer tax breaks to those who employ disabled workers.
Ron Killingsworth, the director of Marketing and Legislative Affairs for PSW (Promoting Self Worth) of Porterville, which serves 825 clients in the south part of the Valley, spoke about problems the new laws are creating in Tulare County. He had to sit down with 10 individuals and their parents and "tell them they could no longer work."
"I get the great privilege of being able to hand an individual a paycheck every other Friday and see someone light up because they understand that what they do matters and they're valued as an individual even though there may be some conversation that needs to happen about what their commensurate wage really means and should everyone make minimum-wage," said Killingsworth.
The problem in his organization is that disabled persons produce about a third of a non-disabled person and paying them a minimum-wage triples the labor cost for organizations such as his. While not opposed to paying minimum-wage to disabled workers, Killingsworth said some kind of funding or transitioning programming is needed to get there.
He fears that the 14C program is "moving away" and said fewer regulations would help agencies like his whittle down the 80 percent unemployment rate of the disabled.
Jardini said the 14C program is "definitely under attack," illustrated by a resolution introduced by Assemblymember Lorena Gonzalez, D-San Diego, years ago to kill it. It was defeated. Jardini quoted Gonzalez as saying "not everybody should work."
Killingsworth decried how the state "completely controls how we do business" without fulling funding the requirements. His agency and others like Howard Training Center, have to make up huge deficits by creating enterprises to sell products.
Don Sowers, executive director of PSW, told the legislators that 78 percent of the 159 clients in one work activity program will be unemployed if the changes are pushed through without a remedy. That will cause many disabled persons to seek employment on their own.
"If you're an employer, you've got to make a profit. Profit is not a dirty word. It's a fact of life. We're a not-for-profit. If an employer can't make a profit they're going to go out of business. So if you have a choice to hire one person at $15 an hour - which is their target is down the right - and that person can make 100 widgets an hour, are you going to hire three people at $15 each who can only work 30 percent and incur costs of $45 an hour. No, you can't stay in business."
Sowers said he resents the government telling his center and others "you don't know what you're doing" when it comes to job training.
He told Denham that there is a misnomer that centers using 14C workers are "working off the backs of these poor clients." Sowers said his budget for day training and adult service program is $195,000 in the red because he can't reduce labor costs because of the regulation that he hire a three-to-one or six-to-one ratio of clients per staff.
Carla Strong of Howard Training Center said all of her clients are receiving assistance from other agencies and that minimum-wage is affecting benefits.
"We have families in our agencies that will not allow the client to cash their check because they're afraid they're going to lose their benefits," said Strong. "We have to have somebody doing a better job educating them how they can manipulate the system and do what they need to do so that when they are proud of the paycheck that they get that they can cash it without Mom being afraid that they're going to lose out somewhere else."
Denham remarked that the centers are a "huge value to the community" but is concerned that "this is a national issue as well."
"We're looking for solutions," said Denham. "Our fear is that, if we don't address this now, six months or a year from now we may be seeing a lot more clients who are home with their families and their parents are unable to work as well because they're taking care of the very same individuals who are (presently) out working in our community."
The congressman said Howard Training Center has the support of the Democratic and Republican lawmakers. He hinted at committee hearings for next year.
On Friday afternoon Denham suggested the state's eight trainers may be able to train all the state through a webinar.
"What we're asking for is either a delay in the timeline or to have this training done on webinar," Denham told the Courier. "It's a PowerPoint presentation that would be very easy for them to do that over the web so they can still get the training but do it on a much larger scale."