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When Emily Munson started working for Indiana Disability Rights in 2015, 40 employers in the state were permitted to pay employees with disabilities less than the federal minimum wage.
That number has since been cut to 17.
Since at least 2017, when state legislators passed a law recognizing that people with disabilities should be given the same work opportunities and wages as those without disabilities, Indiana has been promoting efforts to end so-called sheltered work, which allows nonprofits or companies to pay people with disabilities less than minimum wage through an exception of the federal Fair Labor Standards Act of 1938.
Instead, the state has been moving toward competitive integrated employment, in which people with disabilities work alongside non-disabled people for the same wages and benefits.
Now, Indiana’s progress might be sped up by the federal government. Under the direction of former President Joe Biden, the U.S. Department of Labor is looking to phase out 14(c) certificates, which allow for sheltered work.
The Labor Department last month proposed a rule that would stop issuance of new Section 14(c) certificates and institute a three-year period for employers holding existing Section 14(c) certificates to phase them out.
Public comment on the rule closed Jan. 17, meaning the final rule could still be revised. And President Donald Trump, who took office Monday, could choose to abandon it altogether.
While some advocates see the proposed change as a win, others warn that it could take away a work option covered by Medicaid and that disabled people might struggle to find jobs right for them.
Challenges mount
Shane Burton is CEO of DSI Services, a Columbus, Indiana-based nonprofit with locations around the state. Burton has worked in disability services for 33 years and started his career in supported employment. In that model, nonprofit employees work alongside employees with intellectual or developmental disabilities to help them learn and do jobs effectively at various locations. Employees are paid competitive wages.
Now, he’s running a sheltered workplace that employs 70 people with disabilities in packaging, quality inspection, shipping, assembly and document shredding.
DSI Services also provides employment opportunities to 200 to 300 people with disabilities around the state through supported employment and vocational rehabilitation programs.
Employees currently doing sheltered work would have to move to supported employment or enter the competitive workforce, employment that might be difficult for them to find because they might have a lower productivity level than able-bodied employees, Burton said.
He told IBJ he’s concerned that the DOL’s new rule will prohibit an opportunity that 805 Hoosiers rely on.
“Philosophically, I’m 100%, I believe our consumers should be in the community doing everything like you, I, or anyone else. But at the end of the day, we also should provide options to those we serve,” Burton told IBJ.
Many people with disabilities rely on a Medicaid waiver, which can be used to fund various services, including transportation, workplace assistance, therapy, care and day services.
Sheltered work is often cheaper for day services than supported work and vocational rehabilitation programs, Burton said.
Munson, who is responsible for pushing Indiana Disability Rights’ legislative strategy, said the writing has been on the wall for a long time that sheltered work would be ending.
Before the Biden administration’s announcement last month to end sheltered work, Indiana was already working through a multi-phased plan to stop using Medicaid waivers to fund pre-vocational training in 14(c) settings by the end of 2027.
That’s why the Family and Social Services Administration’s Division of Disability and Rehabilitative Services has worked the past two years to retool the state’s system to pay for services like career exploration, Munson said.
Filling the void
Whether the federal government or Indiana is the first to phase out sheltered work, Hoosiers employed in sheltered workplaces will need to find new roles.
At least two Indiana organizations already have programs that aim to connect people with disabilities to competitive integrated employment opportunities.
Kim Dodson, CEO of The Arc ofIndiana, said the nonprofit runs the Erskine Green Train-ing Institute to train individuals for jobs in food service, hospitality and now health care.
The program has operated since 2016.
“We really have to show employers in Indiana the variety of jobs that people with disabilities can do, because people with disabilities can really do anything if they have the passion and the right resources and the tools available to them,” Dodson told IBJ.
The training institute began in Muncie as a residential program at the Courtyard by Marriott and later expanded into a commuter program in Indianapolis with workers at Allison Transmission. And just this month, a program that allows participants to learn about the health care field at Riley Hospital for Children began. It has just three students for its inaugural year.
During the 10- and 12-week training sessions, Erskine Green Training Institute students master key job skills in classes and gain valuable work experience through an internship. Data from October 2024 shows that the program has 327 graduates in total, and nearly 80% became employed after graduation.
Noah Upchurch, a graduate of the hospitality program, worked for four years at a Carmel hotel. He started at the front desk and worked his way up to night manager. That was before Upchurch discovered his passion for advocacy. He’s now an advocacy specialist with The Arc, along with president and administrator of Self-Advocates of Indiana, a nonprofit affiliated with The Arc that puts disabled individuals at the forefront.
“[The program] really helped me find my voice; it helped me find confidence and taught me those job skills,” Upchurch told IBJ.
Other employers are hoping to create similar success stories.
In an otherwise nondescript space on a basement floor of Eli Lilly and Co.’s gigantic campus on the south side of downtown, a door with a glass window reads, in colorful bubble letters, “Noble of Indiana.”
Noble of Indiana has 18 participants who manage the facility’s recycling, prep labs, sanitize goggles and do housekeeping tasks. Through the contract with Noble, Lilly agrees to give the individuals work and pays Noble to fund their pay and benefits.
In addition, Noble helps the employers it partners with create a human resources framework to accommodate employees with disabilities in the future.
The program is called Noble Employment and Workforce Services, abbreviated NEWS. It has existed for about a decade, but Rob Hartman, assistant director at Noble, said it’s finally transforming from a startup to a fully realized program.
In addition to Lilly, participants can be placed at Siemens and Corteva Agriscience. About a dozen workers are split between those latter two locations, where they work on a factory line and in a greenhouse, respectively. These jobs are scaled based on each person’s level of independence: Lilly workers are the most independent, followed by those with Corteva and Siemens.
“The biggest challenge is, we don’t have jobs for everybody,” Hartman told IBJ, because not everyone fits at one of those three companies. Part of the goal, too, he said, is that, unlike sheltered workshops, Noble can provide workers with more choices and power.
That’s why Noble is looking for more employers to partner with.
Noble’s employment services program also provides people over the age of 16 with career coaching, networking help, interviewing skills and resume development. Rita Davis, director of communications and marketing for Noble, said the program is one step in proving that people with disabilities are valuable employees.
“We’re not asking for charity,” Davis said. “It is just asking for a fair shot.”•
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