Training Outline

4.4 Standard Lecture: Making the Quota Work in Practice (2.5 hours)

  • Emphasize to participants that quota systems can be adapted to fit national economic and political requirements, since they allow law and policy makers to influence the size and nature of both the targeted group of beneficiaries (persons with disabilities) and the group upon whom obligations are imposed (employers). Using Transparency 71, highlight factors that should be considered when establishing a new quota system or reviewing an existing system.

    Explain to participants that many countries have opted to use quota or quota levy systems to improve employment outcomes for people with disabilities but, thus far, available data indicates that they are only partially effective as an instrument for furthering open competitive employment for individuals with disabilities. Even in countries with systems that provide for sanctions, for example fines or levies for non-compliance, quotas are only partially filled. Research indicates that the use of quotas and levies must be accompanied by adequate instruments to enforce these sanctions, but even in this case the results are not conclusive as to their efficacy. Highlight some of the findings outlined below for participants as time allows:

    (1) Transforming Disability into Ability; Polices to promote work and income security for disabled workers, a 2004 study conducted by the Organisation for Economic Co-operation and Development (OECD) in 20 countries found that more than one-third of the countries in the study used mandatory quota systems. Obligations on the employers were: 7 per cent in Italy; 6 per cent in France and Poland; 5 per cent in Germany; 4 per cent in Austria; 3 per cent in Turkey; 2 per cent in Korea and Spain. Regulations only applied to employers of a certain minimum number of workers, with Korea requiring 300; 50 in Spain and Turkey; and 15–25 elsewhere. Some countries provide for double or even triple counting of severely disabled people for the purposes of the quota. The study concluded that, whether the approach is rights-based (anti-discrimination laws), obligations-based (quota) or incentives-based (voluntary action), it is predominantly current employees with a disabling condition who receive protection. A further conclusion was that employees who become disabled and are thus eligible for counting towards the quota are more likely to be kept in a job, while quota schemes give little incentive to employ a disabled job applicant [p. 105].

    (2) In 1976, the Japanese government passed the Law for Employment Promotion of Persons with Disabilities making it mandatory for companies to ensure a certain percentage of disabled people in their workforce. The law stipulates that 1.8 per cent of the positions in all private-sector companies employing 56 or more workers should be filled with people with disabilities. In the public sector, i.e. national and municipal governments, as well as for state-affiliated organizations, the percentage is 2.1 per cent. Since the quota was introduced, compliance has been less than optimal and this continues to be the case. According to the Health, Labour and Welfare Ministry, as of June 2005, only 42.1 per cent of private-sector companies complied, along with 44.8 per cent of state-affiliated organizations and 77.5 per cent of national and municipal government; this is the case even though Japan's quotas are lower than most of the countries in the OECD.

    (3) In Bahrain, with 20 per cent unemployment, the government tries to limit the number of foreign (i.e. non-Bahrainis) that a company may hire. However, to encourage the hiring of workers with disabilities, the government allows employers to hire two foreign workers for every one disabled worker.

  • Which People with Disabilities Should be Targeted by Quota Schemes?
    Using Transparency 72, and referencing section 4.4.1 of the Primer, explain that people with disabilities comprise a large and diverse group in the population, and include people with very different abilities and impairments. In recognition of this, some quota schemes target all people with disabilities while others target those with the most severe disabilities. Emphasize that the latter group might be expected to be less able to profit from the existence of disability non-discrimination legislation, and that even in non-discrimination environments may not be able to compete for and win jobs on their individual merits. Therefore, a targeted positive action measure in the form of a quota might be an appropriate tool to promote employment for this group.

    In Germany, the quota scheme is specifically targeted at people with severe disabilities.

    In the Netherlands, the voluntary quota system covered all people who were entitled to claim the disability benefit, as the main aim of the system was to reduce the number of claimants. Although the voluntary quota no longer applies, employers still qualify for an exemption from social security premiums where five per cent of their workers have an employment disability, whatever the disability.

    Ask participants to list aloud the attributes and liabilities that might be associated with a global quota scheme that covers all people with disabilities. Positive attributes might include that quota schemes could: (1) help target more global issues such as decreasing the number of people receiving social welfare benefits; and (2) allow the most prepared to avail themselves of the opportunity to access the workplace. Liabilities might include: (1) that only individuals with mild disabilities would be included; and (2) individuals with the most severe disabilities would continue to be un/under employed. Conclude by stating that whichever approach is taken, consideration must be given to the outcome that is intended or expected.

  • How to Identify Those Eligible for Employment under the Quota?
    Using Transparency 73, and referencing section 4.4.2 of the Primer, explain to participants that for a quota system to be effective, it must include two measures for identifying those eligible for employment under the scheme. These measures would include establishing a definition of disability which focuses on the limited working capacity of the individual and the means by which such people are administratively identified.

    Emphasize that in designing a quota scheme, it is important to ensure that very real benefits accrue to those who register and are “labeled” as having a disability by this process. This attention to design will assist in minimizing any problems associated with registration, such as stigma, or a focus on inabilities. One means of achieving this goal is to ensure that registration entitles an individual to coverage under the quota system, but also to other related benefits, or financial support to assist in finding and/or maintaining employment. Please also note to participants that the way in which disability is defined for the purposes of the quota scheme is typically different to the definition used for social insurance.

    Highlight particular issues to which attention must be paid when establishing means for identifying those eligible for the quota. Problems arise if the definition of disability focuses on impairment, rather than limited work capacity. It is important to avoid this, in order to ensure that individuals with low working capacity who need the protection of the quota are those who actually benefit. Additionally, the process of registering for the quota may negatively influence the individual if, in order to do that, they must focus on the inability to work and limited work capacities. Therefore, incentives should be built into the quota registration process, so as to minimize disincentives that might exist for individuals, and allow them dignity. Finally, the physical and emotional costs of requiring a medical examination to ascertain disability may be more costly for the individual than the potential benefit of being eligible for the quota.

  • Should the Quota Especially Favour Certain Disabled People?
    Referencing section 4.4.3 of the Primer, remind participants that even when a quota is targeted at people with severe disabilities or disability benefit claimants, there may still be a group of people who experience particular difficulty in finding employment under the quota, or whose employment should be specifically promoted for one reason or another. Use Transparency 74 to highlight who the group of people might include: people with particularly severe disabilities; war veterans with a disability; people with a disability occupying training or apprentice positions; and people with disabilities who experience a secondary discrimination (for example women, older people, those belonging to ethnic, linguistic, religious, or sexual minorities).

    Illustrate with the examples of Germany and France, provided on page 44 of the Primer, that quota systems can be used to give employers additional incentives to employ targeted populations within the disability community. In those cases individuals who are part of those targeted groups will be regarded as occupying more than one quota position - therefore making it easier for employers to meet their quota obligation.

    In France and Germany, both an individual disabled person occupying a training or apprenticeship position, and an individual with particularly severe disabilities, can be regarded as occupying two or even three quota positions.

  • Standard Quota or Varying Quota Rates?
    Referencing section 4.4.4 of the Primer, ask participants why a State might want to elect to use either one single quota target (e.g. three to five per cent of the workforce), versus different quota targets for different industries or different regions of the country. List the group’s responses on flipchart paper.

    Reinforce the groups’ responses using Transparency 75 explaining that targeted quotas might be used because it is felt that certain sections or regions are able to provide a large number of jobs which are suitable for people with severe disabilities; or that certain sectors of regions are only able to provide a limited number of jobs which are suitable for persons with severe disabilities.

    Explain that these factors might be relevant because the relative size of the agricultural, industrial and service sectors varies from country to country, or from region to region. Each sector offers different possibilities for employing people with various kinds of disabilities. Even within these sectors, there are variations which are determined by the production processes in use. As a consequence, labour intensive employment offers wholly different integration possibilities for people with certain types of disabilities compared with employment in which the new technologies play an important role.

    In Germany, a forerunner to the current quota system, established in 1953, initially set a quota of 10 per cent for the public sector and for the banking and insurance sectors, and a quota of 6 per cent for the rest of the private sector

    In the Netherlands, the now non-existent quota system used different rates for different sectors so that white collar companies having mostly sedentary work had higher quota levels than did blue collar industries.

    In China, the specific rate of the quota is determined by the government of provinces, autonomous regions and municipalities directly under the Central Government. The percentage of disabled employees must be at least 1.5 per cent of the overall employees.

    Conclude by stating that a comprehensive review of the various employment sectors in a country should be carried out before adopting a single quota target covering all employers or deciding whether to set specific quota targets for specific sectors or regions.

  • What is the Appropriate Quota Percentage?
    Determining the appropriate quota percentage is not as complex as one might think. Using Transparency 76, and referencing section 4.4.5 of the Primer, explain to participants that the quota percentage should be based on consideration of the number of people with disabilities willing and available to work, and the size and profile of companies in the economy. Explain to participants that some countries have differing quota obligations depending on the sector – that is, lower percentage requirements for more labor intensive sectors such as manufacturing and higher quotas for white collar (sedentary) sectors such as clerical work.

    Within the European Union, the quota percentage has varied between 2 per cent in Spain and 15 per cent in Italy, where the quota not only covered people with disabilities, but also widows, orphans and refugees.

    Emphasize that it should also be decided whether specific assistance is needed for those with particular types or levels of disability. This information will enable a comparison between the number of jobs that would result if all employers fulfilled the quota obligation, and the number of job seekers with disabilities who can meet job requirements.

  • Should Small and Medium-Sized Employers be Included?
    Referencing section 4.4.6 of the Primer, explain that typically small and medium-sized companies are exempted from quota obligations and that this has an impact on the effectiveness of a quota scheme. In some countries, the exemption applies to employers with less than 10 employees; in others, to companies with less than 300 employees.

    Using Transparency 77, explain why the question of whether small companies should be covered by the quota system or exempted is significant. Illustrate the positive and negative ramifications.

    Arguments in favor of including small companies are based on evidence suggesting that it is easier for many people with disabilities to integrate socially in small companies. In addition to this, where a high number of people are employed in small companies in a state, the exclusion of such firms will similarly exclude a large proportion of the workforce and, as a consequence, significantly restrict the number of jobs reserved for people with disabilities.

    Arguments against including small companies are frequently economic. For example, if firms incur extra costs when employing a person with a disability under a quota system, and these costs are not compensated by grants from the national fund or the relevant agency, small companies with a relatively low turnover may be less able to absorb this cost and therefore be placed in a difficult position.

    In the European Union, the minimum size of firms covered by quota legislation varies from 20 employees in Germany to 50 employees in Spain and Turkey. These cut-off figures have a significant effect on the number of employers covered by the quota system and the number of jobs yielded. Approximately 90 per cent of all enterprises in the European Union have nine or fewer employees and thus, while they generate approximately 30 per cent of the employment in the European Union, they are not covered by any quota scheme. The predominance of small firms varies from country to country, however. 80 per cent of workers are employed in such firms in Spain and Portugal, compared to 63 per cent in Denmark. Exclusion of small firms from the quota scheme would therefore have a much greater impact in Spain and Portugal than it would in Denmark. In countries with few large employers - like Mongolia, where the quota applies to employers with 50 or more employees – excluding small employers from the quota results in few jobs for persons with disabilities.

    Conclude this subsection by restating that before deciding on whether to include or exclude small employers from a quota scheme, and determining the cut-off point for employers who will not be covered by the quota, an assessment should be made of the importance of small employers within the State. Where small employers provide a high percentage of jobs in a State, the impact of the quota will be significantly reduced if such employers are excluded from its scope.

    4 OPTIONAL EXERCISE (1 hour): In lieu of initially using Transparency 77, break participants down into small groups of 3-5 people. Provide participants 30 minutes to discuss the pros and cons of whether or not to include or exclude small employers in a quota scheme. Have each group prepare an argument and allow 30 minutes for a report of findings following process time. Conclude the exercise by reinforcing the points made by respondents with Transparency 77.

    4 OPTIONAL EXERCISE (1 hour): In lieu of the optional exercise above, use the following questions to facilitate discussion among the participants. Explain to participants that the following questions are the types of questions one should be asking when considering whether or not to use a quota system. Ask participants to respond to each question to demonstrate the breadth of potential responses.

    • Beyond the obvious general goal of wishing to improve employment outcomes for persons with disabilities, what specific goals are desired from the use of a quota system? For example, are quotas meant to address employment only for people with severe disabilities? If so, how will adherence to that goal be measured?
    • Is the goal of people with disabilities getting any job, including very low paying jobs, with little chance of advancement sufficiently acceptable as a policy outcome?
    • Is sheltered or segregated work an acceptable outcome?
    • Is the goal of using levies just to raise money to fund vocational rehabilitation and training services an acceptable outcome?
    • How will the administration of those funds be monitored and who should do it?
    • How should transparency in the use of funds from the collected fines be assured?
    • Are levies the best way to encourage employers to retain and hire workers with disabilities? Can you think of other ways or combinations of approaches?
    • What ways might employers use to avoid paying fines and also to not employ disabled workers and what could you do to discourage these practices?
    • How should quota systems be designed in relation to other measures affecting the hiring and retention of workers with disabilities? For example, most systems use different definitions of disability for the quota system versus those used for eligibility for disability benefits – what do you think about that?
    • What are your views about quota systems compared to other incentives such as a civil rights based approach? How should quota systems be constructed to interact with existing labor laws and worker protection (occupational safety and health) laws?
  • Should the Quota Apply to Both the Public and Private Sector?
    Referencing section 4.4.7. of the Primer, query participants as to their thoughts and impressions as to the pros and cons associated with including or excluding public sector employers from a quota scheme. Reinforce responses by stating that since the public sector is a major employer in most countries and has an important role to play as a model employer, it would seem counterproductive to exclude this sector from any quote scheme. Further, if the law only applies to the private sector it could call into question the extent to which the public sector is committed to the employment of people with disabilities. An important point to make to participants is in regard to the responsibility of the public sector to set a good example - typically governments are the largest purchaser of goods and services and therefore are in a unique position to influence their suppliers.
  • What Options Should Be Open To Employers?
    Conclude this seminar by explaining to participants that the operation of quota-levy schemes in the past have highlighted the tendency of many employers to make the levy payment rather than employing the targeted group - leaving the goal of the quota system only partially achieved. To counteract this trend, and to encourage employers to become more actively involved, other optional ways for employers to meet their quota obligations should be considered such as the provision of on-the-job training opportunities or provision of sub-contract work to vocational rehabilitation settings employing people with disabilities.

    Illustrate these other options, referencing section 4.4.8 of the Primer and using Transparency 78, to showcase France’s effort to provide options to employers in addition to recruiting people with disabilities or paying a compensatory levy. In France, employers may now partially meet their obligation under the quota by contracting with sheltered workshops to carry out production or provide services, or by formulating joint plans and agreeing to recruit and train workers with disabilities, and/or to make technical adaptations to the workplace.

    Conclude by reminding participants that it is important to bear in mind that quotas were originally introduced to promote jobs for individuals with disabilities. The quota-levy system seems to make a greater contribution to the promotion of employment of people with disabilities than the other forms of quota described throughout this section.

    OPTIONAL EXERCISE (2 hours): Explain to the class that you are going to be conducting a Quota Simulation. The purpose of the exercise is to allow participants an opportunity to evaluate the need for, consider specific implications of, and design a quota system that best fits the needs identified. Break the group down into small groups of 5-7 individuals. Distribute the work sheet provided in Appendix F. Set the exercise up by explaining the following:

    Recent research, released by a national advocacy group, shows that individuals who are predominantly left-handed make up 15 per cent of the population and they are disproportionately underrepresented in pre- and post-service educational programmes (fewer than 3 per cent). You have been asked to join a national think tank charged with crafting legislation prohibiting discrimination against left-handers in post-secondary education settings. As part of this effort, a high-level official in the government is advocating that a quota scheme needs to be incorporated into the legislation. Your task force is charged with coming to consensus on responses to the following questions to support the development of a quota-levy system. How will you respond?

    • Is there additional information the Task Force needs to assist them in reaching consensus? If so, what types of additional information are needed?
    • Which type of quota is preferable given the circumstances described? (quota-levy; binding quota with no sanction; or non-binding quota).
    • If a quota-levy system is chosen, how would you administer and enforce the scheme?
    • If a binding quota with no sanction, what might the potential outcome be?
    • If a non-binding quota, what might the potential outcome be?
    • What target group should be identified for the quota?
    • How would you define eligibility?
    • Should the quota favor certain left-handers over others?
    • Should standard or varying quota rates apply?
    • What would the appropriate quota percentage be?
    • Who would the quota be imposed on?