1. Notwithstanding the provisions of any other law to the contrary, the director is hereby authorized to contract with a private individual, corporation, partnership or other lawful entity for inmate work or vocational training projects involving the manufacture and processing of goods, wares or merchandise, or any service-related business or commercial enterprise deemed by the director to be consistent with the proper employment, training and rehabilitation of offenders.

2. Any contract authorized by this section shall be in compliance with federal law, shall be competitively negotiated by the department and the private entity, shall not result in the displacement of civilian workers employed in the community or state, and shall be subject to the approval of the advisory board of vocational enterprises program created pursuant to section 217.555.

3. The director may lease space in one or more buildings or portions of buildings on the grounds of any correctional center, together with the real estate needed for reasonable access to and egress from the leased premises to a private individual, corporation, partnership or other lawful entity for the purpose of establishing and operating a business enterprise. The enterprise shall at all times observe practices and procedures regarding security as the lease may specify or as the correctional center superintendent may temporarily stipulate during periods of emergency. The enterprise shall be deemed a private enterprise and is subject to all federal and state laws governing the operation of similar private business enterprises as specified by the authorized contract.

4. Subject to the approval of the director and upon such terms as may be prescribed, any lessee operating such an enterprise may employ and discharge from employment selected offenders of the correctional center where the enterprise is operated or from other correctional centers in close proximity. Offenders assigned to such an enterprise are subject to all departmental and divisional rules in addition to rules and regulations promulgated by the authorized contractor. Offenders assigned to such an enterprise for employment purposes shall be required to pay a percentage of their wages as established by the director of not less than five percent nor more than twenty percent of gross wages to the crime victims’ compensation fund, section 595.045.

5. The director shall establish policies and procedures for determining the specific wages paid, workers’ compensation benefits and deductions from wages to include room and board; federal, state and Social Security taxes; and family support. All deductions must not total more than eighty percent of gross wages. Provisions of the Fair Labor Standards Act shall apply to contractual offender workers.