"Our organization operates three social enterprises that are for the purpose of employing persons with severe mental illness. In our view a social enterprise must pay minimum wage, or the going rate to its employees to be a social enterprise. We have operated training programs that were similar to a social enterprise other than the rate of pay. From my experience, that distinction is not uncommon in Canada.
Our enterprises are not yet self-sustaining. We are moving in that direction, but the nature of our workforce is such that the social supports they require adds significant cost and increases our expenses. We have determined that providing competitive employment in a supportive environment is more important than earning a profit for the organization. Having said this, we are constantly revising our approaches to move closer to self-sufficiency.
As an example, we have operated a catering business (Krackers Katering) since 1999. It employs approximately 36 part-time employees and earned $130,000 in food revenues in fiscal 2009. We have a very large workforce primarily because our employees are reluctant to work full time for fear of losing government supported health benefits, and their rate of production varies from competitive rates to significantly less than industry standards. These factors make it challenging to be fully self-sufficient, but our main purpose is to offer employment to folks that face significant barriers. We compete with mainstream catering firms and our products are priced at similar rates. We are accepted by the business community because we do not practice unfair competition and pay our employees at sub-minimum wage. Is the business subsidized by grants? Yes, but our competition understands and accepts that our costs are significantly higher than the industry standard.
There are certainly a host of questions that organizations that work with persons with disabilities need to ask when looking at starting a social enterprise? Is it legal in your jurisdiction to pay less than minimum wage to an employee? Would these folks be employees be in fact be trainees? (Interestingly in Canada there is a CRA definition of social enterprise that actually stipulates a training component) Would this social enterprise be competing with other private businesses and be undercutting the market? Far too many questions. Far too few answers."
Don Palmer
Executive Director
Causeway Work Centre
Ottawa, Ontario, Canada
[Moderator's note: on a related point, Jim McClurg sent contributed a document entitled DOL Commensurate Wage, which is relevant to US-based SE's working on this issue.]
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