An article Thursday incorrectly reported that Goodwill Industries of America paid less than the minimum wage to half of its disabled employees. The actual figure is 36 percent. (Published 9/22/90)

The U.S. Labor Department has ordered the Salvation Army to pay the minimum wage to the 50,000 people nationwide -- many of them homeless alcoholics or drug addicts -- enrolled in its work therapy programs each year.

If they must be paid, those "wayward souls" would be emptied onto city streets and welfare rolls because the organization's 117 work therapy programs would become too expensive to operate, according to a suit filed by the Salvation Army in federal court in Alexandria.

The suit argues that they are socially and spiritually handicapped "beneficiaries" who came to the Salvation Army for guidance, not for jobs, and so are not covered by minimum wage laws.

"Everyone we're talking about here came to us and said, 'We want to be part of your program,' " said Col. Kenneth Hood, national chief secretary for the Salvation Army. "They didn't come to us looking for employment. They came to us because they had a problem -- alcohol, drugs, broken families."

The suit also claims that the Salvation Army's constitutionally protected religious programs would be compromised and asks the courts to issue an injunction preventing the Labor Department from forcing the nonprofit organization to offer the minimum wage, overtime rates or other employee benefits.

The Salvation Army's Adult Rehabilitation Centers, located locally in Annandale and Beltsville, each provide housing for 80 to 125 people for 60 to 90 days.

Participants receive food, shelter, counseling and a weekly stipend of $5 to $20 for personal items. The work therapy, consisting of processing items donated by the public to the Salvation Army, is supervised by regular employees and is intended to prepare the individuals to reenter society, according to the organization.

Aaron Stephens, 32, who is served by the group's facility on Little River Turnpike in Annandale, said he would like to be paid for the work he does in the program. But he emphasized that he received help worth far more than any amount of money he might have earned.

"This was the only way I felt I could get close to God," said Stephens, who abused drugs and alcohol for years.

William J. Moss, counsel for the Salvation Army, berated the Department of Labor for its order, saying the organization was presented with an "ultimatum."

"They were not interested in investigating the matter, or discussing compromise in any way," said Moss, adding that the Salvation Army chose to file suit in an effort to resolve the issue quickly.

Johanna Schneider, spokeswoman for the Labor Department, said the Salvation Army twice has been notified that it must join Goodwill Industries of America and other service groups in paying anyone who works in their programs.

"Congress intended for people who work to be paid. We have to enforce the law. That's our job," Schneider said. She noted that the Labor Department began its investigation into the Salvation Army's employment practices after it received a complaint from someone who had been in its program.

After discussions with Salvation Army officials this month, the Labor Department issued a letter to the organization Sept. 7 ordering it to conform to fair labor laws or face legal action. The letter was signed by Samuel D. Walker, acting administrator of the Wage and Hour Division of the Employment Standards Administration.

Rep. Marge Roukema of New Jersey, ranking Republican on the House Labor and Management subcommittee, argues that in the 52 years the Fair Labor Standards Act has been in effect, Congress never meant to twist the arms of organizations such as the Salvation Army.

"This has got to be mindless bureaucracy at its worst," said Roukema, adding that she has taken her complaint to Elizabeth Hanford Dole, secretary of labor and her friend.

Retired Rear Adm. David M. Cooney, president of the Bethesda-based Goodwill Industries, said no one in Goodwill's 178 facilities works without pay. But Cooney noted that half the organization's disabled employees are paid less than the minimum wage because of exceptions provided for in the fair labor act.

Moss said the Salvation Army never sought such exemptions because they apply only to physically disabled workers. But Labor officials said the law could be applied to the Salvation Army's beneficiaries if it could be shown that their drug abuse or other problems impaired their ability to work.

Staff writer Sean C. Kelly contributed to this report.