I'm not sure what the original intent of the 1938 law was, or how it's being abused now, but I did participate in an organization that helped the severely mentally handicapped. The charity provided them with a place to stay (a house in a neighborhood with neighbors, not an institution) including 24/7 care for things like helping with medications, cleaning, etc. Part of the program was that they spent some time each week (definitely not 40 hours) in a work environment (in our case, packing plastic bags into boxes for Johnson and Johnson), also fully supervised by caretakers.
Johnson and Johnson certainly weren't making out on the deal, given the limitations of the work that could realistically get done versus what a non-disabled employee would be able to do. I suspect the whole program was more headache and expense than they saved. In other words, the point was not for these people to earn enough money to support themselves (their housing, meals, clothes, were taken care of), and only partially about earning some spending money (there was already a budget for that too, things like movie tickets, coffee at Tim Hortons, etc), but more trying to lead a normal life -- seeing peers at work, waving to the other workers in the plant, going to the company barbecue, etc.
Again, I'm basically 100% sure that abuses exist of this provision, but I would really like to see any reform done in such a way that it doesn't eliminate programs like this.
They have a similar law in New Zealand, but there is a debate around abolishing it so that disabled people would have to be paid normal minimum wage.
The flip side to this was that a whole bunch of workers basically stood to be made redundant, because the companies employing them could't afford to pay them minimum wage. The reason that a lot of companies were hiring these people was a as community service.
The coworking space I used to work at does this. They have a special needs guy who is the community assistant, he'd come in like 3 days a week and help with keeping the kitchen clean and other stuff. It was great, we loved him and he loved being there. It would've been cheaper and easier to hire a fully-abled person to do the job, but that's not why they hired him.
It's common for supermarkets in New Zealand to hire people with learning disabilities to do things like collecting trolleys. To be honest, they look like the most satisfied employees in the whole store.
The sad thing though is that people do abuse the system and use them as a cheap source of labour, which is disgusting.
Johnson and Johnson certainly weren't making out on the deal, given the limitations of the work that could realistically get done versus what a non-disabled employee would be able to do. I suspect the whole program was more headache and expense than they saved. In other words, the point was not for these people to earn enough money to support themselves (their housing, meals, clothes, were taken care of), and only partially about earning some spending money (there was already a budget for that too, things like movie tickets, coffee at Tim Hortons, etc), but more trying to lead a normal life -- seeing peers at work, waving to the other workers in the plant, going to the company barbecue, etc.
Again, I'm basically 100% sure that abuses exist of this provision, but I would really like to see any reform done in such a way that it doesn't eliminate programs like this.