“Work Therapy” = Three Hots and a Cot – Little to No Pay

Chicago, IL Our brothers and sisters who live and work at The Salvation Army’s adult rehabilitation centers and adult rehabilitation programs (ARCs) are desperate – and very vulnerable. They are homeless, or marginally housed, very poor, suffering from drug or alcohol addiction, mentally ill, and/or entangled with the criminal justice system.

“Work Therapy” = Three Hots and a Cot – Little to No Pay But it gets worse.

Michael Clancy v. The Salvation Army, an unpaid wages lawsuit alleges that they are also the victims of wage theft at the hands of the very same religious organization that purports to “save” them.

Now in the summary judgment phase, Clancy is particularly important. Two other lawsuits, Raymon Alvear v. The Salvation Army, and Robert Geiser v. The Salvation Army, have been stayed pending the resolution in Clancy.

Not Noah’s Ark

Thousands of vulnerable people are enrolled in The Salvation Army’s ARC program. The cornerstone of the program is that all ARC workers must work for at least forty hours per week in Salvation Army stores. These stores compete with similar used goods establishments like the (for profit) Value Village or (non-profit) Hadassah Resale Shops.

ARC workers typically perform tasks like sorting donated clothing, hanging clothes on hangers, putting price tags on the clothing and other goods, sorting and cleaning bric-a-brac, testing electronics, rehabilitating furniture, and loading and unloading trucks with donated goods.

In exchange for the ARC workers’ full-time labor, The Salvation Army pays wages that start as low as $1 per week and may increase each week up to a maximum of no more than $25 per week. This is well below the minimum wage required by the Fair Labor Standards Act (FLSA) and applicable state laws. The ARC workers are under the direction and control of Salvation Army employees, who often perform the same tasks but are paid in accordance with the law.

As further compensation for their work, The Salvation Army provides ARC workers with dorm-like sleeping arrangements, board in the form of food that is at least in part donated by third parties or purchased with ARC workers’ SNAP benefits, clothing that has been donated and would otherwise be sold in the defendant’s thrift stores, and rudimentary rehabilitative services. ARC workers who complete the program allegedly leave penniless and jobless, unable to survive in their communities — no better off than when they first sought help.

For additional context, this looks like the challenges that people with disabilities face in the “sheltered workshop” system, now under considerable legal scrutiny. Some readers may also be reminded of the reaction to the claim by the Florida Department of Education that “slaves benefited from skills they learned while enslaved.”

The FLSA protects workers

The FLSA is designed to protect workers, especially vulnerable workers who do not have the power to negotiate the terms and conditions of their employment, including wages. The basic rule is that workers must be paid at least the minimum wage as set by law ($15.00 per hour in Illinois, effective January 1, 2025). For more than 40 hours per workweek, workers must receive time-and-a-half. Basic math says that $15 x 40= $600 per workweek; time and a half = $22.5 per hour for each hour more than 40 in a workweek.

What about the room and board?

Ah, this is the sticky point.

Under Section 3(m) of the FLSA, meals and lodging may be counted toward an employee’s minimum wage under specific circumstances. These must primarily benefit the employee and be customarily furnished. The employer must obtain the workers’ consent. The value of the in-kind payment must be based on the actual cost to the employer or the fair market value.
But were they employees?