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Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations6311settings in which individuals arecompensated below the minimum wagein accordance with the FLSA do notconstitute competitive employment. TheSecretary wishes to clarify that theminimum wage requirement forindividuals placed in supportedemployment applies at the time oftransition to extended services. If anindividual is unable to obtain theminimum wage at this time, theindividual would still be considered tohave achieved an employment outcomebut it would not be considered asupported employment outcome.The Secretary agrees that requiringindividuals in competitive employmentto earn at least the prevailing wage forthe same or similar work in the localcommunity performed by non-disabledindividuals is unduly restrictive andthat requiring individuals withdisabilities who achieve competitiveemployment outcomes to becompensated at the wage level typicallypaid to non-disabled individuals whoperform the same or similar work for thesame employer is a more reasonablestandard. This standard requires thatcompetitively employed individualswith disabilities receive the customarywage and level of benefits (e.g.,insurance premiums, retirementcontributions) received by non-disabledworkers performing comparable jobs forthe same employer. Clarification in thefinal regulations that comparablecompensation includes both the wageand benefit level typically paid by theemployer is necessary, the Secretarybelieves, in order to ensure thatcompetitive employment outcomes forindividuals with disabilities are truly‘‘competitive.’A key purpose of the 1992Amendments is to ensure thatindividuals with disabilities achieveemployment outcomes in the mostintegrated settings possible, consistentwith the individual’s informed choice.Consequently, the Secretary believesthat placement in an integrated settingis an essential component of‘‘competitive employment.’The Secretary agrees with thosecommenters who believe that thedefinition of integrated setting in theproposed regulations did notsufficiently ensure actual interactionbetween individuals with disabilitiesand non-disabled persons. TheSecretary also agrees with thosecommenters who contend that the bestmeasure of integration in anemployment setting for individuals withdisabilities is to require parity with theintegration experienced by non-disabledworkers in similar positions.Consequently, the final regulationsestablish a standard of integration withrespect to employment outcomes that isbased on ensuring the same level ofinteraction by disabled individuals withnon-disabled persons as thatexperienced by a non-disabled workerin the same or similar job. An integratedsetting for purposes of a job placementis one in which an applicant or eligibleindividual interacts with non-disabledpersons, excluding service providers, tothe same extent that a non-disabledworker in a comparable positioninteracts with others.The Secretary believes, however, thatinteraction between individuals withdisabilities and non-disabled personsneed not be face-to-face in order to meetthis standard. Persons with disabilitieswho are self-employed or telecommutemay interact regularly with nondisabledpersons through a number ofmediums (e.g., telephone, facsimile, orcomputer). Self-employment, homebasedemployment, and other forms ofemployment in which individualscommunicate regularly from separatelocations, therefore, would satisfy theintegration requirement of competitiveemployment as long as the eligibleindividual interacts with non-disabledpersons other than service providers tothe same extent as a non-disabledperson in a comparable job.The Secretary, like many of thecommenters, also believes that settingsthat are established specifically for thepurpose of employing individuals withdisabilities (e.g., sheltered workshops)do not constitute integrated settingssince there are no comparable settingsfor non-disabled individuals.Changes: The Secretary has amended§ 361.5(b)(10) to define ‘‘competitiveemployment,’’ in part, as work forwhich an individual earns at least theminimum wage but not less than thecustomary wage and level of benefitsprovided by the same employer to nondisabledworkers who perform the sameor similar work. The Secretary also hasamended § 361.5(b)(30) to define‘‘integrated setting’’ with respect to anemployment outcome as a settingtypically found in the community inwhich applicants or eligible individualsinteract with non-disabled individualsto the same extent that non-disabledindividuals in comparable positionsinteract with other persons. Thedefinition of ‘‘integrated setting’’ withrespect to the provision of services hasbeen similarly strengthened to requireactual interaction between individualswith disabilities receiving services andnon-disabled individuals.• Designated State UnitComments: Some commentersrequested that the regulatory definitionof ‘‘designated State unit’’ prohibitDSUs from administering vocationaland other rehabilitation programs otherthan those programs authorized orfunded under the Act.Discussion: Sections 101(a)(1) and(a)(2) of the Act require that the StateVR Services Program be administered bya State entity that is primarilyconcerned with vocationalrehabilitation or vocational and otherrehabilitation of individuals withdisabilities, but does not restrict thisrehabilitation focus to only programsauthorized or funded under the Act. TheSecretary wishes to give States as muchorganizational flexibility as is permittedby statute.Changes: None.• Employment OutcomeComments: Several commentersopposed the definition of ‘‘employmentoutcome’’ in the proposed regulationson the basis that it failed to excludeoutcomes other than competitiveemployment (e.g., homemaker, selfemployment).Other commentersdisagreed with the emphasis in thedefinition on competitive employment.Discussion: The definition of‘‘employment outcome’’ in the finalregulations, like the proposeddefinition, elaborates on the definitionin section 7(5) of the Act byincorporating into the definition thestatutory concept that an employmentoutcome must be consistent with anindividual’s strengths, resources,priorities, concerns, abilities,capabilities, interests, and informedchoice. Although the definition does notcontain a full list of permissibleemployment outcomes, it does notexclude any employment outcomes thathave been permitted in the past. Thus,for example, homemaker, extendedemployment, and self-employmentremain acceptable employmentoutcomes even though they are notspecifically identified in the definition.The Secretary also believes, however,that competitive employment, which isthe optimal employment outcome underthe program, should be considered foreach individual who receives servicesunder the program and should,therefore, be highlighted in thedefinition.Changes: None.• Establishment, Development, orImprovement of a Public or NonprofitCommunity Rehabilitation ProgramComments: Some commentersopposed that part of the proposed