A Quicksburg nonprofit must pay over $40,000 in back wages to 40 workers for failing to have a valid certificate to pay them below the minimum wage.

Investigators found that Shen-Paco's certificate that allowed them to pay wages below the federal minimum had expired, leading to a violation of Section 14 (c) of the Fair Labor Standards Act's Employment of Workers with Disabilities at Subminimum Wages provisions, according to a news brief from the U.S. Department of Labor Wage and Hour Division. 

Section 14 (c) of the FSLA allows employers to pay below the federal minimum wage level to workers who have disabilities.

Shen-Paco Industries Inc., at 1032 Wissler Road, is community-based organization that provides day support and employment services to adults with disabilities.

The organization offers area companies business services that include custodial services, bulk mailing, small parts assembly, packaging, collating and sorting, recycling and document destruction.

Certification employers must obtain an authorizing certificate from the Wage and Hour Division prior to paying subminimum wages, Leni Fortson with the U.S. Department of Labor stated.

Without a valid certificate, the law requires Shen-Paco to pay 40 affected workers the full minimum wage, the Labor Department stated. Shen-Paco also failed to maintain accurate records of employees’ work hours, the department stated.

The company will have to pay $46,386 in back wages.

Wage and Hour Division District Director Roberto Melendez in Richmond said in a statement that his division is committed to ensuring that workers with disabilities receive fair treatment and are afforded the full protections of the Fair Labor Standards Act. "We will use available enforcement tools to ensure subminimum wage certificate holders are in compliance with the Fair Labor Standards Act,” Melendez said.

In a prepared email statement to the Daily, Shen-Paco CEO Cena Hubbell said: 

"Several years ago the state decided that individuals with disabilities could no longer 'work' within the confines of these four walls. They could go to work in the outside workforce, stay home or attend a day program. When COVID hit our country, many facilities were shut down, never recovered and were not able to reopen. We were blessed to have a supportive Board of Directors and hardworking staff and slowly we worked to reopen.

"For those that are under the type of funding that allows them to 'work,' we do time studies with the help of our community partners that do like work, then these individuals are in turn paid piece rate. By paying piece rate, we fall under the Department of Labor’s 14C certificate and, as you can imagine, audits. We were audited by DOL, which is not uncommon at all — this is my third audit in nine years. After submitting the paperwork and meeting all their criteria, the audit was closed."

Contact Charles Paullin at cpaullin@nvdaily.com

(1) comment

BeetleJuice

This is not a very good explanation for the poor book keeping.

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