Suggested Changes to Form WH-226, "Application for Authority to  
Employ Workers With Disabilities at Special Minimum Wages"	 
(06-APR-01, GAO-01-471R).					 
								 
The Fair Labor Standards Act allows individuals with disabilities
to be paid at special minimum wage rates that are lower than the 
federal minimum wage, under certain conditions.  This		 
correspondence examines form WH-226, ''Application for Authority 
to Employ Workers with Disabilities at Special Minimum Wages''.  
This form provides the Department of Labor with data on employers
and workers covered under the Act. However, GAO noted that Labor 
may not be collecting accurate information on the number of (1)  
employers because information in one of the items on form WH-226,
is incomplete and may be confusing to employers and (2) workers  
with disabilities employed under the Act because the time periods
specified in two of the items on the form are inconsistent and	 
the instructions may be confusing to employers. Labor could	 
eliminate this confusion by providing clearer instructions for	 
filling out the form as well as eliminating confusing and	 
contradictory language. 					 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-01-471R					        
    ACCNO:   A00827						        
    TITLE:   Suggested Changes to Form WH-226, "Application for       
             Authority to Employ Workers With Disabilities at Special Minimum 
             Wages"                                                           
     DATE:   04/06/2001 
  SUBJECT:   X							 
	     X							 
	     X							 
	     X							 
	     X							 
	     X							 

******************************************************************
** This file contains an ASCII representation of the text of a  **
** GAO Testimony.                                               **
**                                                              **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced.  Tables are included, but    **
** may not resemble those in the printed version.               **
**                                                              **
** Please see the PDF (Portable Document Format) file, when     **
** available, for a complete electronic file of the printed     **
** document's contents.                                         **
**                                                              **
******************************************************************
GAO-01-471R

Suggestions for Changes to Form WH- 226

United States General Accounting Office Washington, DC 20548

April 6, 2001 Mr. Michael F. Ginley Director, Office of Enforcement Policy
Wage and Hour Division U. S. Department of Labor

Subject: Suggested Changes to Form WH- 226, “Application for Authority
to Employ Workers With Disabilities at Special Minimum Wages”

Dear Mr. Ginley: We are currently reviewing the Department of Labor's
administration of the provisions of section 14( c) of the Fair Labor
Standards Act (FLSA). These provisions allow individuals with disabilities
to be paid at special minimum wage rates that are lower than the federal
minimum wage, under certain circumstances. As part of this review, we have
examined form WH- 226, “Application for Authority to Employ Workers
with Disabilities at Special Minimum Wages,” as well as a draft
revision that we received from the Wage and Hour Division. (The enclosure to
this correspondence contains a copy of the draft.)

The changes are intended to help ensure that the form provides Labor with
accurate data on employers and workers covered under the provisions of
section 14( c) of FLSA.

Data Collected on Employers

Labor may not be collecting accurate information on the number of employers
because information in one of the items on the form is incomplete and may be
confusing to employers. Specifically, item 6 on the revised form does not
ask employers to list their primary place of business and, as written,
implies that work centers are required to obtain a separate 14( c)
certificate for their clients who are employed by others at supported
employment sites. 1

Employers are required to obtain 14( c) certificates for their primary place
of business and any branch locations at which workers are paid special
minimum wages.

1 Supported employment sites are work sites operated by regular businesses
for which support services, such as job coaches, are provided for workers
with disabilities. Some work centers help place their clients at these sites
and provide the support services.

GAO- 01- 471R Suggestions for Changes to Form WH- 226 Page 2 Employers are
not required to obtain separate 14( c) certificates for workers placed at

supported employment sites. 2 Item 6 of the draft form asks employers to
list the names and addresses of all of their branch establishments and
supported employment sites and the number of workers employed at these
locations. Item 6 does not, however, ask employers to list their primary
place of business or the number of workers employed at that location. This
may be confusing to employers. Labor is more likely to obtain accurate
information on the number of employers and the branch locations for which
separate 14( c) certificates are required if employers were asked to list in
item 6 only the names and addresses of the locations for which they are
required to obtain 14( c) certificates.

Data Collected on the Number of Workers

Labor may not be collecting accurate information on the number of workers
with disabilities employed under the provisions of section 14( c) because
the time periods specified in two of the items on the form are inconsistent
and the instructions may be confusing to employers.

In item 6 on the draft form, employers are asked to list the number of
workers at each of their branch locations and supported employment sites,
but they are not required to list the number of workers at their primary
place of business. Employers are asked to provide this information for all
workers they expect to employ (no time period specified) if it is a new
application, or for workers employed at one point in time (“ during
your most recently completed representative fiscal quarter”) if it is
an application for renewal. In item 8, however, Labor requests information
on the total number of workers paid special minimum wages at all locations
during the most recently completed fiscal year.

To improve the clarity and consistency of the information collected on the
number of workers employed under the provisions of section 14( c), Labor
could eliminate item 8 and rely on item 6 to obtain information on all
workers paid special minimum wages. In addition, Labor could ask employers
to list the number of workers paid special minimum wages at each of the
locations for which they are required to obtain 14( c) certificates at one
specific point in time. For example, the item could read

“Enter the number of workers with a disability who, at any time during
[some specified time period], were paid special minimum wages for work at
your primary place of business and at each of your branch locations.”

The employer could then be asked to total these numbers to make it clear
that Labor intended them to report the total number of workers paid special

2 If workers placed at supported employment sites are employees of the work
center, they are covered under the work center's primary 14( c) certificate.
If the workers are employees of the business that provides the supported
employment site, the business, rather than the work center, must obtain a
14( c) certificate in order to pay these workers special minimum wages.

GAO- 01- 471R Suggestions for Changes to Form WH- 226 Page 3 minimum wages
at all locations for which they are required to obtain section

14( c) certificates. Employers submitting new applications could be asked to
list in item 6 all of their locations and the number of workers they
intended to employ at each location under the provisions of section 14( c).
The actual number of workers employed would be obtained from the employers'
subsequent applications for renewal.

If you have any questions regarding this report, please contact me at (202)
512- 7215 or Revae Moran at (202) 512- 3863.

Sincerely yours, Sigurd R. Nilsen Director, Education, Workforce, and

Income Security Issues Enclosure

GAO- 01- 471R Suggestions for Changes to Form WH- 226 Page 4

Enclosure Enclosure

GAO- 01- 471R Suggestions for Changes to Form WH- 226 Page 5

Enclosure Enclosure

GAO- 01- 471R Suggestions for Changes to Form WH- 226 Page 6

Enclosure Enclosure

GAO- 01- 471R Suggestions for Changes to Form WH- 226 Page 7

Enclosure Enclosure

(130041)
*** End of document ***