Welfare Recipients and Workforce Laws (CRS Report for Congress)
| Release Date |
June 28, 2004 |
| Report Number |
97-1038 |
| Authors |
Vee Burke, Domestic Social Policy Division |
| Source Agency |
Congressional Research Service |
Summary:
Work requirements of the 1996 welfare law ( P.L. 104-193 ) and discussions about
reauthorization
of the program of Temporary Assistance for Needy Families (TANF) have raised questions about
the application of basic labor and employment tax laws to TANF recipients. The most controversial
issue has been the status of persons assigned to "workfare" programs, in which recipients work in
exchange for their TANF benefits. The U.S. District Court for the Northern District of New York
held on March 1, 2004, that participants in the Work Experience Program (WEP) are
"employees"entitled to wage and hour protections of the Fair Labor Standards Act (FLSA). In
February the Second Circuit Court of Appeals held that WEP participants also are employees under
federal civil rights employment-related legislation. In the absence of explicit language in the 1996
law, the Clinton Administration's Department of Labor (DOL) maintained that most workfare
participants were employees and hence, must be "compensated" at the minimum wage rate. Because
TANF sets a minimum work week, some states might have to raise benefits to meet the minimum
wage standard for workfare participants. Another issue is whether workfare "wages" are subject to
payroll taxes. If Congress should increase the federal minimum wage rate or the TANF work week,
it would increase the number of states whose workfare programs might have to be changed to meet
FLSA and Internal Revenue Service (IRS) requirements. This report will be updated when significant
developments occur.
