Sheltered Workshop Payroll

Written by Kimberly Clark
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Typically, sheltered workshops are non-profit corporations that hire people with physical disabilities and/or mental impairments. The Rehabilitation Act of 1973 and the Americans with Disabilities Act in 1990 outlawed discrimination against people with disabilities and seek to continue to integrate individuals with disabilities into the mainstream workforce. Conversely, these workshops were purposely developed to provide "sheltered," segregated work facilities for persons with limited abilities.

To qualify as a sheltered workshop, the corporation must obtain a special certification from its state government as well as from the Department of Labor (DOL). This designation then allows the sheltered workshop to pay their disabled employees commensurate wages, thus exempting the entity from the minimum wage requirements outlined in the Fair Labor Standards Act. This basically means that when compared to a person without a disability, the worker is paid a proportionate wage relative to his or her own abilities to perform.

How The Payroll System Is Set Up

Most sheltered workshops have set up their payroll systems to pay on a piece rate schedule. This method allows the disabled employee to be paid based on the sum of items they produced or by the number of projects they completed. The rate per piece that they are actually paid is a predetermined percentage of what a non-disabled person performing the same task would be paid.

Examples of assignments given to employees working for sheltered workshops consist of envelop stuffing for mass mailings, packing, and basic assembly line tasks. Subcontracts obtained from government agencies and other companies provide the bulk of the employment offered by the workshop. From time to time, the sheltered workshops also receive some government funding and private grant money. Especially in these cases, for purposes of accountability, it is essential to have a payroll system in place, preferably software-based to prevent human error and to allow for reports to be printed.


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