Two more bills have been filed to roll back the state minimum wage overwhelming approved by Arkansas voters just last November.
As we’ve detailed on the blog, Sen. Bob Ballinger filed a bill, amended this week, to exempt people younger than 18 years old, people with developmental disabilities, people with felony convictions, and businesses or nonprofits with fewer than 25 employees.
Rep. Robin Lundstrum filed bills yesterday that would do a similar rollback:
HB 1752 would exempt:
* Businesses with fewer than 25 employees
* Private nonprofits whose operating budget is less than $1 million
* Private nonprofit developmental disabilities service providers “whose operations are primarily funded by state or federal reimbursement, or both, on a fee-for-service schedule”
HB 1753 would exempt people who are younger than 21 and enrolled as a full-time student in high school or in an institution of higher education. This would replace the current law, which allows employers to pay 85 percent of the state minimum wage to full-time students employed to work 20 hours while school is in session or 40 hours when school is not in session.
In November, 68.5 percent of Arkansas voters approved a ballot initiative to increase the state minimum wage, in phases, to $11 by 2021. A previous initiative, in 2014, had increased the state minimum wage to $8.50, backed by 66 percent of voters. If passed, Lundstrum’s bills, like Ballinger’s would leave those exempted with the federal minimum wage of $7.25.
Ballinger told me that he had not yet read the bills but would support any measure that accomplished his goals of exempting certain employees and employers from the minimum wage.
The DD service providers, as described in HB 1752, appear to be a reference to around 40 sheltered workshops in the state, segregated work facilities for disabled people that pay sub-minimum wage (sometimes pennies an hour), often for menial tasks. The facilities are run by community rehabilitation programs (CRPs), which are intended to provide vocational rehabilitation services services to people with disabilities. Under federal law, employers can apply for a “Section 14(c)” certificate allowing sub-minimum wages for disabled workers from the U.S. Department of Labor; most of these certificates today are held by CRPs. Around 3,000 disabled employees in the state currently make less than the federal minimum wage, under 14(c) certificates.
The sheltered workshops are controversial (see this report from Disability Rights Arkansas), but current state law (§ 11-4-214) already allows the workshops to receive similar state certificates allowing such facilities to pay sub-minimum wage; under the state Department of Labor’s rules, holders of 14(c) certificates essentially have automatic approval to pay wages below the state minimum. Therefore, said Thomas Nichols, an attorney for Disability Rights Arkansas, the state minimum wage law has no bearing on 14(c) employers such as the sheltered workshops — they already have an exemption under current state law. Lundstrum’s bill could have the unintended consequence, however, of allowing sheltered workshops, as well as other developmental disability service providers, to exempt other low-wage employees who are not clients in their vocational rehabilitation programs from the minimum wage.
I’ve reached out to Lundstrum to ask why this exemption was included. By contrast, Ballinger’s amended bill targets not the sheltered workshops but conventional employers in the community — for example, a grocery store could pay a worker with a developmental disability the federal minimum wage of $7.25 while another worker doing the same job would get the higher state minimum wage. Ballinger argues that such workers might not be hired if employers had to pay them the higher state wage, drawing sharp criticism form Disability Rights Arkansas. Lundstrum’s bill would not apply to such workers employed outside of developmental disability providers.
Like Ballinger’s bill, Lundstrum would exempt businesses with fewer than 25 employees (as opposed to four under current law). I don’t have numbers on how many workers that would impact, but it’s significant. Arkansas Advocates has been able to crunch the numbers at a slightly lower threshold based on available data, and found that 84 percent of businesses in the state have fewer than 20 employees.
For private nonprofits, Lundstrum shifts the exemption threshold from the number of employees (25 under Ballinger’s amended bill) to operating budget, setting the line at $1 million.
HB 1753, meanwhile, would exempt any student under 21 years old in high school or college, while Ballinger’s bill would simply exempt anyone under 18 years old. This would cut the pay of college students who were working while enrolled, and perversely would create a dynamic where employees would be penalized for being in school. A student could make a higher wage under this provision by dropping out.