The U.S. Department of Labor is proposing a sweeping new rule that would end the decades-long practice of allowing employers to pay workers with disabilities less than the minimum wage.
The agency issued a proposed rule this week to phase out what are known as 14(c) certificates. Under a federal law dating back to 1938, employers can obtain special government certificates to pay people with disabilities less than the federal minimum of $7.25 an hour.
If the rule is finalized, the Department of Labor would immediately stop issuing new certificates. At that time, existing certificate holders would have three years to stop paying disabled workers the so-called subminimum wage.
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“In the decades since Section 14(c) was included in the Fair Labor Standards Act, there have been important legal and policy advances that have dramatically expanded the employment opportunities and rights of people with disabilities,” said the Acting Secretary of Labor Julie Su. “With this proposal, the department hopes that many workers currently receiving subminimum wages under Section 14(c) will transition to jobs that pay full wages, which will improve their economic well-being and strengthen the inclusion of people with disabilities in the workforce.” workforce.”
The measure caps a years-long effort by many disability advocates to eliminate subminimum wage employment, which they say is ripe for exploitation and unfairly limits opportunities to fully participate in the community.
Already, at least 15 states have passed laws phasing out subminimum wage employment, and the number of people with disabilities working under the model has dropped dramatically. In May, the Department of Labor said 801 employers had 14(c) certificates and employed about 40,000 people with disabilities. That’s less than a third of the workforce employed under the model in 2019.
The agency said a review of certificate data valid between October 2023 and March 2024 found that about 49% of employed workers under 14(c) earned $3.50 per hour or less and about 10% They earned $1 or less per hour.
Labor Department officials said the proposed rule reflects the sea change in opportunities for workers with disabilities since the 1930s. It comes after the agency spent a year gathering feedback on the 14(c) worker program. with disabilities, their families, disability service providers, 14(c) certificate holders, advocates and others as part of a comprehensive review of the program.
In the proposed rule, the Department of Labor notes that the Fair Labor Standards Act authorizes the issuance of 14(c) certificates “but only when such certificates are necessary to avoid the reduction of employment opportunities.”
“Employment opportunities for people with disabilities have expanded greatly in recent decades, in part due to significant legal and policy advances,” according to the proposed rule. “Based on that evidence, the department has provisionally concluded that subminimum wages are no longer necessary to prevent reduced employment opportunities for people with disabilities and therefore proposes to phase out the issuance of section 14(c) certificates.”
Despite the push away from the subminimum wage, Hugo Dwyer, executive director of VOR, which advocates for people with intellectual disabilities and their families, says there remains a specific group of people with developmental disabilities who benefit. of 14(c), not because of the pay, but because it offers the opportunity to perform meaningful daily activities with colleagues in a safe environment.
“It is difficult to locate a person who has frequent epileptic episodes or who has the potential to engage in self-injurious or aggressive behavior when they are upset in most work environments. It’s hard to ask co-workers to potty train people with (intellectual disabilities and autism) or how to change an adult diaper,” he said. “Sheltered workshops can accommodate these people.”
The proposed rule will be open to public comment until January 17. While Labor Department officials said they will review comments as they come in, it will likely be up to the incoming Trump administration to determine whether or not to finalize the rule.
Even before the proposal was released this week, some Republican lawmakers had expressed concerns about the legality of any measure to end 14(c) that would bypass Congress.
With that in mind, advocates with the Autistic Self Advocacy Network are urging Congress to pass a bill known as the Transformation to Competitive Integrated Employment Act before the end of the year, which would phase out 14(c) and provide funding and assistance technique to help workers with disabilities transition from subminimum wage work to competitive, integrated employment.
“For too long, sheltered workshops in many states have kept people with significant disabilities segregated from the broader community, paying them pennies for their work,” said Zoe Gross, advocacy director for the nonprofit . “In states that have already eliminated sheltered workshops, we have seen an increase in employment rates for disabled workers. Ending Article 14(c) will have the same effect across the country.”
