Wages for Ex-Welfare Recipients Fuel Dispute

In their first major confrontation over welfare reform, the Wilson and Clinton administrations are locked in a dispute over the rights of welfare recipients to be paid the minimum wage for government-sponsored work.

The dispute, which has reignited old antagonisms between Republican and Democratic administrations over labor policies, was brought to a head by a provision in the state’s welfare reform act requiring recipients to be offered community service work if they have not found jobs after two years on aid.

But as counties have begun to set up community service work programs, they have been faced with contradictory guidance from the federal and state governments.

Federal officials, citing the Fair Labor Standards Act, have insisted that any welfare-to-work programs that treat recipients like employees also must pay them the minimum wage.

State officials, however, have urged counties to ignore the federal advice, arguing that welfare by definition is an assistance--not an employment--program.

“These are aid recipients, not employees,” said Bruce Wagstaff, deputy director of the state Department of Social Services’ Welfare to Work Division. “We think we have a strong position that the [minimum wage] is not applicable.”

But a U.S. Department of Labor spokesperson warned that the state is creating potential legal troubles for both counties and private employers who participate in community service and is endangering a critical element of the welfare reform effort.

“We don’t believe the state’s guidance is accurate,” the spokesperson said, “and we are concerned [that] employers who rely on the state’s guidance will find themselves with unexpected liabilities under the Fair Labor Standards Act.”

The dispute over the minimum wage illustrates an unexpected legal pitfall in the nation’s efforts to reform its public aid system and change the philosophical direction of welfare from a program that provides assistance to one that promotes work.

Margaret Pena, a lobbyist for the California State Assn. of Counties, said most counties have not decided whether to require the minimum wage. “Our hope is that there would not be differences between the state and federal government on these issues,” she said. “But where there are differences, [they] may ultimately have to be resolved in the courts.”

In Los Angeles County, officials will not begin designing their community service program until July. For a small number of recipients, the county already provides some work experience to allow them to brush up on their job skills, and does not pay the minimum wage. The Los Angeles City Council recently passed a resolution urging the county to require the minimum wage, which is $5.75 in California.

Community service is a key element in the reform effort because it is designed to give the hardest-to-employ recipients the work experience that will help them move off assistance and into the job force before they hit a five-year lifetime limit on receiving aid.

The programs, most of which are still in the planning stage, use private employers, nonprofit organizations and government agencies to provide work experience for welfare recipients. The recipients usually are not paid a wage but are required to work in the community service job a certain number of hours a week to continue receiving their aid payment.

If federal labor laws come into play, the number of hours each recipient works would have to be determined by dividing the $5.75-an-hour state minimum wage into their aid payment. For example, in a family of two for which the maximum monthly aid payment is $456, a welfare mother could only work 18.3 hours a week.

Across the nation, the minimum wage issue has become increasingly controversial as more and more welfare recipients move into the work force. In New York City, government workers complained that welfare recipients in work programs have often been used to displace city workers.

“This doesn’t just affect welfare recipients,” said Muneer Ahmad, staff attorney for the Asian Pacific American Legal Center of Southern California. “It affects every worker in the state because basically what it does is create a cheap source of labor which is going to depress wages for everyone.”

Ahmad said he fears that Southeast Asian aid recipients will be affected more than other groups by the state’s position because they are more likely to end up in community service jobs. He said high rates of illiteracy, lack of English proficiency and low levels of education make it more difficult for them to get employed quickly.

“This is not just some legal thing,” said Maurice Emsellem, an attorney at the National Employment Law Project, which represents low-wage workers. “This is about how the welfare system in California is going to operate. . . . California is the only state that has directly as a matter of policy challenged the Department of Labor’s position.”

But Wagstaff said state lawyers felt comfortable in opposing the federal position because they believe that none of California’s welfare-to-work programs create an employment relationship.

“These activities are all about assisting recipients to become employed, to attain the skills necessary for employment and to remove barriers to employment,” he said. “They [recipients] are not working.”

Federal officials, however, said welfare-to-work programs should be reviewed on a “case by case” basis to determine whether recipients are receiving training--or are actually working and therefore entitled to the minimum wage. Otherwise, they said, private employers who participate in the community service program by providing work sites could be liable for minimum wage violations.