473 F.2d 1090 (2nd Cir. 1973), 479, Aguayo v. Richardson

Docket Nº:479, 508, 72-2195, 72-2243.
Citation:473 F.2d 1090
Party Name:Lydia AGUAYO et al., Appellants-Plaintiffs, v. Elliot R. RICHARDSON, Secretary of the United States Department of Health, Education and Welfare, et al., Appellees-Defendants.
Case Date:January 18, 1973
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit

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473 F.2d 1090 (2nd Cir. 1973)

Lydia AGUAYO et al., Appellants-Plaintiffs,


Elliot R. RICHARDSON, Secretary of the United States Department of Health, Education and Welfare, et al., Appellees-Defendants.

Nos. 479, 508, 72-2195, 72-2243.

United States Court of Appeals, Second Circuit.

January 18, 1973

Argued Dec. 1, 1972.

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Adele M. Blong, New York City (Steven J. Cole, Henry A. Freedman, and NLSP Center on Social Welfare Policy and Law, Inc., New York City, of counsel), for appellants Aguayo, and others and Upstate Welfare Rights Organization, and others.

Paula Omansky, New York City (Norman Redlich, Corp. Counsel, City of New York, of counsel), for appellants City of New York and Jule Sugarman.

Joseph P. Marro, Asst. U. S. Atty. (Whitney North Seymour, Jr., U. S. Atty. for the S.D. N. Y., Jerome T. Levy, and Thomas Scarlett, Department of Health, Education and Welfare, of counsel), for the Federal appellees.

Amy Juviler, Asst. Atty.Gen. (Louis J. Lefkowitz, Atty. Gen., Samuel A. Hirshowitz, First Asst. Atty. Gen. and Constance B. Margolin, Law Apprentice, New York City, of counsel), for appellees Lavine and New York State Dept. of Social Services.

Robert J. Egan, Marion P. Ames, New York City, and Mildred A. Shanley, Middle Village, N. Y., of counsel, for various civic and social organizations appearing as amici curiae in support of the contentions of appellants-plaintiffs.

Before FRIENDLY, Chief Judge, and WATERMAN and HAYS, Circuit Judges.

FRIENDLY, Chief Judge:

This appeal is from an order of Judge Bauman in the District Court for the Southern District of New York, 352 F.Supp. 462, denying a preliminary injunction in an action by three sets of plaintiffs to enjoin the New York State Commissioner of Social Services and the State Department of Social Services (NYSDSS) from carrying out two experimental work project programs for employable members of families receiving assistance under the partially federally funded Aid to Families with Dependent Children (AFDC) program and to set aside the approval of the programs by the Secretary of Health, Education and Welfare under the demonstration project provision of the Social Security Act, 42 U.S.C. § 1315. The three sets of plaintiffs are: six women who might be required to take employment under the projects, suing individually, on behalf of their minor children and of other persons similarly situated; the City of New York and Jule Sugarman, Commissioner of its Department of Social Services, both of whom will have roles in administering the projects; and seven welfare rights organizations.

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There are two sets of defendants. One, the federal defendants, comprises the Secretary of Health, Education and Welfare (HEW), the Administrator of its Social and Rehabilitation Service; its Regional Commissioner; and the Department itself. The other set, the state defendants, includes New York's Commissioner of Social Services and the Department of Social Services. 1

I. The Nature of the Two Projects.

The two projects, known as Public Service Work Opportunities Project (PSWOP) and Incentives for Independence (IFI), were formulated by the State Department of Social Services and approved by HEW for one year. 2 The State envisions PSWOP as providing public service work opportunities for those AFDC recipients who are able to work but for whom regular employment, training or public service employment has not been available or appropriate. Approximately 25% of the State's AFDC cases, comprising those recipients living in fourteen welfare districts in New York City, two counties in the metropolitan area surrounding the City, three upstate urban areas and six counties in the rest of the state, are to be included in PSWOP.

The local departments of social services in PSWOP districts must see to it that employable recipients 3 of AFDC benefits register with the appropriate office of the New York State Employment Service. Semi-monthly interviews are to be scheduled for the recipients with employment counselors so that an employment plan, for a private sector job, training, public service employment (in IFI districts only), or a PSWOP job, can be developed. If the state employment service is unable to find other employment or a training program within thirty days, assignment of the recipient to a PSWOP job becomes mandatory. PSWOP employ can involve work for any state, city, town or village agency or school district located in the county. Broadly speaking, the work will be of the sort which, because of budgetary problems or otherwise, would not be undertaken except for PSWOP; workers in the program are not to displace those who would otherwise be employed.

No individual will be required to participate in PSWOP unless satisfactory child-care arrangements can be developed, and each case must be assessed to determine adequacy, although the state requires that "[d]iligent efforts . . . be made by [the recipient] and the social services district to obtain child care services or the assistance of others to provide such care." Public Service Work Opportunities Project (for ADC and ADC-U Recipients) Policy and Procedures, at 3 [hereinafter PSWOP Policy and Procedures].

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PSWOP workers will not receive earnings over and above their welfare benefits. The number of hours to be worked will be determined by dividing the amount of the participant's grant by the hourly wage to be received, but in no case will an individual be required to work more than eight hours a day or forty hours a week. The hourly rate will be the state minimum wage or the wage paid to employees for comparable work in the unit of government in which the project is conducted, whichever is higher. Participants will be reimbursed for lunch and transportation costs, and all work-related expenses incident to participation are to be paid "so that no recipient will incur any actual net reduction in income due to such participation." HEW Action Memorandum (re PSWOP), May 31, 1972, at 5. 4 Participants will also be covered by workmen's compensation. See N.Y.Soc.Serv. Law § 350k-3(d).

Failure to accept a justifiable referral or to participate properly after such a referral "without good cause" is a ground for termination of assistance, 18 N.Y.C.R.R. § 385.6. Upon request a fair hearing must be granted prior to termination, but if the recipient has not accepted the referral or has not continued to participate in the program and then receives an adverse determination at the hearing, a thirty-day suspension of benefits is mandated even though the recipient agrees to immediate compliance. See 18 N.Y.C.R.R.§ 385.7.

The Incentives for Independence (IFI) demonstration project has four components: (1) a combination of two public service employment programs-PSWOP and the Emergency Employment Act (EEA) Public Service Employment Program-for adults unable to find regular employment; (2) an earnings exemption; (3) work motivation for school youth through participation in community work projects; and (4) a counseling service for the parents or caretakers of truant children. The project covers approximately 2.5% of the state's AFDC and Home Relief 5 recipients and will be conducted in three areas-a welfare center in New York City (Bay Ridge), a suburban county (Rockland), and a rural county (Franklin)-all of which are contained in or are coextensive with areas in which PSWOP will function.

As with PSWOP, all nonworking employable recipients will be required to participate in counseling, to report for job interviews and to accept work or training if offered, and no recipient will be considered employable unless a satisfactory child-care plan is available. Individuals in IFI districts can be assigned

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to PSWOP jobs if employment or training programs in the regular economy are unavailable, and their work obligations and benefits will be identical to those of other individuals in PSWOP programs, except that the sanction for noncompliance in IFI districts is a flat $66 per month reduction in assistance until the individual complies. A limited number of recipients in IFI districts, however, will be assigned to "public service employment" jobs, subsidized by EEA funds, which will pay the higher of the minimum wage or the prevailing wage for persons in similar public occupations. Unlike PSWOP workers, employees in public service employment will work full-time and be paid full wages. Participants will receive workmen's compensation, health insurance, unemployment insurance, and all other fringe benefits conferred on employees of the same employer; their work conditions and promotional opportunities will also be the same as those of regular employees.

A certain portion of the wages paid in these public service employment jobs will be ignored when determining the recipient's eligibility for a supplementary welfare assistance grant. This "income disregard," which differs from that normally mandated by the federal government for AFDC recipients in regular employment, see § 402(a)(7), (8) of the Social Security Act, 42 U.S.C. § 602(a)(7), (8), by lowering the income level at which supplementary assistance payments terminate, 6 will be applied in IFI districts to all AFDC and Home Relief recipients in public service employment or in regular employment. 7

Furthermore, the children of families receiving AFDC or Home Relief in IFI districts who are 15 years of age and attending school full-time (and are not otherwise ineligible) 8 are required to participate in "Work Motivation for Youth." This program will require the child to work for up to six hours semimonthly during the school year and up to sixty hours during...

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