A now-defunct San Francisco company that employed disabled adults to do assembly and packaging work is paying more than $43,000 in back wages that it failed to pay over a yearlong period in violation of federal minimum wage laws, the U.S. Department of Labor announced today.
Disabled Employees Rehabilitation Inc. and its president, Bregy Van Cleve, were also ordered to pay the same amount in damages to the nine employees listed in the federal complaint as well as $9,900 in civil penalties.
The employees will each receive the wages they were due as well as the same amount in damages. The back wages ranged from $81.58 to $12,180, according to the consent order filed in U.S. District Court in San Francisco.
The company employed disabled adults and, according to a description on its Facebook page, was founded in 1948 to provide “a positive, nurturing and healthy environment for the physically and intellectually disabled adults to learn skills, feel empowered and be productive.”
The employees worked in a 6,000-square-foot warehouse at 2405 Third St. in the city’s Dogpatch neighborhood, specializing in “labor-intensive handiwork and assembly projects with a focus on quality and quick turn-around time.”
According to the labor department, the products assembled and packaged included iPhone wallets and cases, toys, first aid kits and soap.
Nine employees who were either paid below minimum wage or not paid at all between May 18, 2012, and June 24, 2013, were due a total of $43,613, according to the settlement.
Federal labor regulations allow some employers to pay special minimum wages less than the federal minimum wage to workers with a physical or mental disability, but such businesses have to be certified that they are following stringent regulations.
Disabled Employees Rehabilitation was not certified, the labor department said.
“This should not have happened, and the fact that it was being done under the cloak of an organization presenting itself as having a charitable purpose just makes all these violations all the more shameful,” the labor department said.
Van Cleve left the company in August 2013, according to his Facebook, the same time the proposed settlement was reached. Phone numbers listed for the business have been disconnected.
Scott Morris, Bay City News