Labor laws at odds with transition programs

By LAURA L. LOVE and DR. KATHRYN A. LUND

 In 1989, the U.S. Department of Labor's Wage and Hour Division fined an Arizona school district for failing to comply with federal labor laws in its special education vocational program. Literally overnight, the event set two federal agencies with conflicting, if not constraining, laws upon a collision course in one of Arizona's largest school districts.

The Fair Labor Standards Act, administered by the U.S. Department of Labor (DOL), and the Individuals with Disabilities Education Act, administered by the U.S. Department of Education, came together as a cataclysmic force where both sets of regulations set up to protect children and youth took varying courses that appeared to be diametrically opposed: one act restricting opportunities in order to protect; the other act assuring the freedom of access and opportunity.

As a result of the investigation, local education agencies (LEAs) throughout Arizona suffered severe cutbacks in community-based employment preparation opportunities for students with disabilities -- especially for those with more substantial disabilities -- and relations between schools and employers were critically damaged.

Department of Labor compliance monitoring continues in Arizona (and in other states in Region 9 as well) with additional investigations conducted this past year in two more of the state's largest school districts. Additionally, recent investigations have occurred in Nevada and Oregon, also in Region 9 of the DOL.

In these investigations, DOL compliance monitors were primarily concerned with recordkeeping, largely ignoring the actual transition experiences students were benefiting from. This article discusses the FLSA regulations, the impact of the DOL investigations in LEAs, and the implications for transition opportunities for students with disabilities. FLSA Regulations

The FLSA contains provisions and standards concerning recordkeeping, minimum wages, overtime pay and child labor. Historically, employment preparation programs operated by LEAs have been exempt from DOL enforcement of the FLSA because such programs were considered to be "training" programs, and the FLSA applies only when there is an "employment relationship."

However, two Supreme Court decisions allowed the application of the FLSA to state and local governments, thereby permitting DOL involvement in school-based employment preparation programs, treating them as employment situations. State labor regulations apply as well, and in cases involving school-age workers or trainees, whichever law provides more protection or sets higher standards applies.

School programs, sheltered workshops and all agencies administering covered work training programs must adhere to the guidelines and regulations of the FLSA and state labor laws as administered and enforced by the DOL.

According to the FLSA, a student must be paid minimum wage or prevailing wage, and is subject to overtime wage, if an "employment relationship" exists. The difficulty for school districts is in determining if there is an "employment relationship." The DOL has established six criteria (see inset) to determine a nonemployment relationship, all of which must be satisfied for a nonemployment relationship to exist (U.S. Department of Labor, 1962).

To determine whether a student is entitled to wages as opposed to being an unpaid trainee, as in a work exploration program, these six criteria may be used. If all six of the criteria apply, the trainees or students will not be considered to be employees within the meaning of the FLSA, and therefore payment is not required.

Until recently, the DOL has always considered work performed as part of an evaluation period or training period to be compensable. However, in September 1992, the federal Labor and Education departments issued a joint memorandum that specifies what would be permissible for students with disabilities in school work programs who are functioning in some "trainee" capacity at actual work sites.

The memorandum, known as "Guidelines for Implementing Community-Based Educational Programs for Students with Disabilities," applies to students who are unable to work at competitive rates and who need intensive ongoing support on the job. The guidelines allow students with physical and/or mental disabilities in school-based employment preparation programs to participate in vocational exploration, assessment and training in community-based work sites for no pay, provided their placements are tailored to the students' educational needs.

These guidelines represent an effort at the federal level to provide a reprieve from the FLSA in order for students with disabilities to receive appropriate transition opportunities.

Even with the guidelines, there appear to be many questions as to the manner in which the DOL will apply them in actual practice during an investigation. The application of the guidelines is intended for students with physical and/or mental disabilities, leaving unanswered whether students with emotional disabilities would qualify.

The DOL and ED have not defined the terms "vocational exploration," "vocational assessment," and "vocational training," instead apparently leaving this responsibility to program implementers.

In addition, there are two other conditions by which a student does not have to be paid: "volunteer" and "in-school placements." All but "in-school placements" have stringent requirements which must be met so that the student does not have to be paid.

Students and/or their parents may not waive their right to wages. The DOL will not assert that an employment relationship exists where work is performed on a bona fide volunteer basis.

The volunteer arrangement must satisfy guidelines established to protect students with disabilities from employment abuse. Some questions that can be used to test this determination are:

-- Is this an accepted and established (bona fide) volunteer position in the community?

-- Are there other volunteers working for the organization in a similar capacity?

-- Do all parties involved agree this is voluntary?

-- Do all parties involved agree that pay is not contemplated?

The DOL will not assert that an employment relationship exists in work experience occurring directly for the school district on school grounds and for periods of less than an hour per day on the average. The only exception occurs when the work performed by the student is done for an outside vendor working within the school, in which case the FLSA regulations apply and wages must be paid.

Therefore, this no-enforcement policy is not applicable to special education students performing subcontract work or sheltered workshop-type work on school premises.

There are special provisions in the FLSA for students participating in a school work experience program where students earn less than minimum wage. The DOL has an "Application for Special Worker Certificate" that a rehabilitation counselor, school official, or employer must submit and have approved. The process of obtaining a subminimum wage certificate requires schools and/or employers to conduct time studies to determine productivity -- as compared to workers without disabilities -- to calculate the percent of the prevailing wage to be paid. Impact of FLSA on LEAs in Arizona

The school district that was the first to be investigated in Arizona began the subminimum wage application process two years prior to the DOL investigation, when it became aware that LEAs fell under the 1989 amendments to FLSA.

Prior to the investigation, LEAs in the state were mostly unaware that the FLSA now applied to school-based employment preparation programs. After the DOL investigation found the school district to be in noncompliance with the FLSA and levied monetary penalties, the school district curtailed and revised all employment preparation programs for students with disabilities.

The DOL made it known that other LEAs in the state would be investigated; therefore, any school district with work experience programs, community-based instruction programs, or sheltered workshop programs could be subject to investigation, and potentially to fines and the payment of back wages for areas of noncompliance.

The FLSA guidelines regulating vocational opportunities for students with disabilities were applied stringently during the investigation of the school district such that immediate program curtailments followed in LEAs statewide.

Schools and employers were soon reluctant to become involved in community-based employment training for students with disabilities for fear of running the risk of investigation.

Considering the difficulty in satisfying all six criteria for a nonemployment relationship, many employers became unwilling to provide training sites for students, due to having to pay full minimum wage to students who performed even the smallest amount of work while training, often with hand-over-hand job coaching assistance.

Despite efforts to assist schools in re-establishing community-based employment training programs, many school districts and employees continue to proceed cautiously with implementation. Implications for Transition

The investigative and enforcement actions of the DOL do create a great concern for the survival of employment preparation programs and appropriate transition opportunities for students with disabilities in Arizona and nationally, particularly those programs that are community-based and/or include "meaningful" employment preparation as part of the students' education.

While the FLSA provisions are designed to protect minors by prohibiting employment in jobs and under conditions detrimental to their health and well-being, their application by DOL not only restricts real-life job experiences for youth with disabilities, it further inhibits the implementation of appropriate transition services as mandated by another federal law, the Individuals with Disabilites Education Act (IDEA).

The IDEA requires that a free and appropriate public education (FAPE) in the least restrictive environment -- including transition services -- be provided to students receiving special education services.

Services determinations and placement decisions are made on an individual student basis by the Individualized Education Program (IEP) team. Among the transition services that schools must provide are community experiences, development of employment objectives, and, if appropriate, functional vocational evaluation.

The labor regulations restrict the freedom of the IEP team to place students into environments and experiences based on their needs by prescripting the types of activities in which they can participate, severely limiting the continuum of transition preparation options available to students, at least in Region 9.

Secondly, in an era which strongly emphasizes communication and collaboration among agencies serving children, the enforcement of the labor regulations in Arizona occurred in virtually an overnight "gotcha" investigation which resulted in severe curtailment of highly beneficial employment preparation programs for students with disabilities.

The enforcement of the labor regulations continues to vary greatly from region to region of the DOL, making it appear that some states are being harshly penalized for the same educational practices that states in other DOL regions are allowed without penalty.

To prevent this regional discrimination, consistency is needed nationwide in the monitoring and enforcement practices of the DOL when investigations of school-based vocational programs for students with disabilities are concerned.

The Departments of Education and Labor need to continue considering the impact of the labor regulations on providing FAPE and appropriate transition services, and develop policies clearly delineating the process by which those opportunities will be monitored.

Before the DOL starts investigations in other regions, states also should be taking the initiative to develop policies guiding schools in defining their employment preparation programs in light of the FLSA and related guidelines.

Although Region 9 of the DOL appears to be one of the few regions nationally, thus far, to have increased its monitoring of school programs with strict application of the FLSA regulations, it is only a matter of time before other states' employment preparation programs for students with disabilities are scrutinized, resulting in curtailment of the same transition opportunities now mandated by IDEA.

Education professionals are required to provide opportunities for students with disabilities to obtain the skills needed for transition from school to adult life, yet the abrasive application of the FLSA in Region 9, without consideration of the education and transition needs of students with disabilities, prohibits such crucial preparatory experience.

It is truly unfortunate, since these are the very types of programs that hold the greatest promise for students with disabilities to become fully integrated into the community at large. Balance is needed to ensure that schools are allowed the opportunity to provide the best education for life beyond the school house door. Laura L. Love is an education program specialist for the Arizona Department of Education, Special Education Section. Dr. Kathryn A. Lund is the state director of special education in Arizona.

Editor's note: The U.S. Department of Education will be providing further instruction and clarification on implementing these guidelines. An article on the subject will appear in the next edition of Counterpoint.

REFERENCES

United States Department of Labor (1962). Field operations handbook(6/21/62-10b10-10b11). Washington, DC: United States Department of Labor. Author.

United States Department of Labor (1975). Field operations handbook (6/24/75-10b03-3). Washington, DC: United States Department of Labor. Author.

United States Department of Labor (1986) Analysis of the 1986 Amendments to Section 14(c) of the Fair Labor Standards Act (10.16086). Washington, DC: United States Department of Labor. Author.

United States Department of Labor (1990). The Fair Labor Standards Act of 1938, as Amended (WH Publication 1318). Washington DC: United States Department of Labor. Author.