Charlotte’s rehabilitation center flouts labor law in the name of “therapy”

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For six months, Prince Foster III woke up at 6 a.m. every day and hung clothes in a red brick Salvation Army warehouse in Charlotte.

He was spending 40 hours a week working – but instead of earning North Carolina minimum wage, he was earning a small weekly allowance of much less value.

The remainder of Foster’s salary went to his room and board at the Salvation Army Adult Rehabilitation Center in Charlotte. From May to November 2020, Foster, 37, was a patient in the Charlotte ARC program, recovering from a cocaine addiction he had faced since his early twenties.

Foster declined to say how much he was paid, but Richard New, administrator of the Charlotte ARC, said patients were tipped $ 26 per week. The Fair Labor Standards Act requires a national minimum wage of $ 7.25 per hour. With the CRA’s $ 26 weekly allowance, participants who work 40 hours per week receive about 65 cents an hour.

Across the country, the California Salvation Army is now facing a class action lawsuit for alleged labor violations. In Spillman v. Salvation Army, the California Superior Court ruled that the organization must pay damages to participants, including unpaid overtime, minimum wage compensation, and time off allowance.

In this case, the plaintiffs claimed to receive between $ 1 and $ 25 per week in “canteen cards” and wages, often working more than 40 hours.

Given the FLSA and the legal precedent in the Supreme Court case Tony and Susan Alamo Foundation v Secretary of Labor, the Salvation Army’s type of work therapy program is almost certainly illegal.

Yet a continuing lack of oversight and competence from federal and state agencies allows drug rehab centers like the Charlotte ARC to bypass employment law and pay recovering addicts next to nothing for their long hours on the job.

About the program
The Salvation Army, a Christian organization known for its thrift stores and charitable work, has 101 rehabilitation centers across the country. The centers are known for their use of “labor therapy,” where recovery participants work full-time for little or no pay: a process some have called “slave labor.”

The Charlotte ARC opened in 1951. For the approximately 116 men who participate at a time, the program can last between six months and two years, New said. Tasks for participants may include handling donations, hanging and sorting clothes, helping out in stores and helping with reception, or working in the kitchen.

“Our main goal is to rehabilitate man as a whole,” he said. “And so it comes down to talking to that spiritual side, providing social and emotional support.”

When not working, participants attend 12-step meetings, a Bible study, and classes on topics such as finances, anger management, and a healthy lifestyle. The Charlotte ARC also partners with Pfeiffer University, which provides interns who study drug and alcohol counseling.

The program is divided into four phases, each lasting 45 days. During the first phase, participants are under “total lockdown,” New said – they cannot leave the building or have phones. New said participants gain more freedom with each additional phase.

The facility provides attendees with food, room / board, and work opportunities, New said, and their tip is intended for personal items: “Things like laundry. “

Lawyer D. Michael Hancock, former deputy administrator of the Wages and Hours division of the United States Department of Labor, wrote a guest column on NBC on occupational therapy rehabilitation programs. Hancock said the Salvation Army makes a huge amount of money from its thrift stores.

In 2019, the North and South Carolina branch of the Salvation Army received more than $ 115 million in revenue. Of that amount, thrift stores provided $ 26 million and donations provided an additional $ 59 million.

There is a thrift store adjacent to the Charlotte ARC and two more in the area that ARC participants help support.

“All that kind of behind-the-scenes work – a lot of it is done by these residents, and that translates into a huge amount of income,” Hancock said.

Salvation Army Representative Major John Murphy said via email that the Charlotte ARC operates thrift stores and converts donated goods into cash to pay for the cost of the rehabilitation program.

“All income from thrift stores is used to pay for expenses related to the operation of the program,” he said.

Lack of oversight, impact
The Charlotte ARC is not licensed. Charles Epstein, legal communications specialist for the North Carolina Department of Health and Human Services, said the agency does not authorize or inspect the CRA due to a religious exemption.

Murphy said part of the reason the center is not accredited is that “the services provided to the program are not clinical in nature.”

Additionally, no state or federal labor organization oversees or regulates the Charlotte ARC.

In 1990, the US Department of Labor ruled that the Salvation Army must pay its workers minimum wage, according to a report by The Charlotte Observer. Charlotte Salvation Army officials said occupational therapy programs would be difficult to run if beneficiaries were paid a salary.

Salvation Army officials said the organization did not intend to comply with the minimum wage requirement. And three decades later, they still aren’t.

In response to the 1990 investigation, the Salvation Army filed a complaint and lobbied lawmakers, refusing to pay drug addiction participants. The Ministry of Labor quickly backed down, suspending its investigation into the Salvation Army.

The ministry even added new rules to its field operations manual that required investigators to obtain approval before investigating Salvation Army rehabilitation centers, according to a 2020 report from Reveal.

“One of the things you will find in the field operations manual is a statement that says they are not to sue the Salvation Army,” Hancock said. “But it also makes it clear that the Salvation Army is still covered by law and that workers have the right to bring their own lawsuits to recover any wages they do not receive.”

Murphy said participants in the rehabilitation program are not paid for their work because they are not considered employees.

Called ‘beneficiaries’, they perform tasks that ‘are designed to help the beneficiary develop skills for the workplace,’ he said.

Public records requests to the North Carolina Department of Labor and the US Department of Labor did not find any records relating to the Charlotte ARC. The US Department’s Worker’s Compensation Office said the claim would fall under the North Carolina state’s workers’ compensation program, which has yet to respond.

And after?
The Charlotte ARC is not the only rehab center in the state accused of unethical practices in occupational therapy programs. Despite efforts to expose these work therapy programs for work violations, institutions continue to offer programs due to an unwavering demand for drug addiction programs in North Carolina.

Recently, concerns about the legality of work-based programs that violate fair wage standards have reached members of Congress.

In November 2020, U.S. Senators Elizabeth Warren (D-Mass.) And Tammy Baldwin (D-Wis) sent a letter to the Government Accountability Office, asking it to begin investigating federally funded facilities.

“Requiring individuals to work without compensation is a violation of the Fair Labor Standards Act,” the senators wrote in the letter. In addition, they said, federal funding dedicated to supporting people with substance use disorders should be used in evidence-based treatment settings.

The letter also mentioned the apparent lack of evidence to support the idea that work-based therapy programs are beneficial for substance abuse treatment.

Over 20 years ago, the Federal Administration of Addiction and Mental Health Services also expressed concerns about workplace rehabilitation programs. Their 2000 results revealed that these programs do not help participants move from low-skilled work to better-paying employment opportunities. They noted that basic education and sufficient training procedures for low-skilled workers are more useful.


As concerns about workplace programs continue to reach government agencies and officials, the future of these programs is in question.

Recent developments in the legal battle with the Salvation Army may be the beginning of the end for the organization’s countless attempts to evade action by the Department of Labor.

On May 14, a New York-based law firm filed a nationwide class action lawsuit against the Salvation Army. The company accused him of violating anti-discrimination laws after the Boston CRA banned Mark Tassinari from his facility for using buprenorphine, a drug that helps people with blood disorders. use of opioids to manage their addictions.

The Salvation Army’s drug policy violates the American Disabilities Act, Rehabilitation Act, and Fair Housing Act.

The Charlotte ARC program has proven to be ineffective for the vast majority of its participants. But the few successes that emerge keep it going.

Prince Foster III graduated from the program in November 2020. Now Foster works as a pallet builder at 48forty Solutions and Chep Pallets in Charlotte, where he was born and raised. He also started a rap career, using his music as an outlet for his drug addiction struggles.

“Labor therapy has conditioned my brain to be able to get up every morning and go to a real job,” Foster said.

Graduation rates for government-run programs, such as the Walter B. Jones Center in Greenville and the Julian F. Keith Alcohol and Drug Abuse Treatment Center in Black Mountain, typically hover between 70% and 90%.

Meanwhile, in many workplace drug rehabs, the graduation rate is 30% or less. But this is not the case for the Charlotte ARC. Not even close.

It’s 12%.

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