US proposes to end subminimum wage for disabled workers

The U.S. Department of Labor announced Tuesday that it has plans to phase out certificates that allow employers to give disabled workers subminimum wages.

Under the current rule, certain employers can apply for a certificate that allows them to pay employees with a disability less than the federal minimum wage, which is currently $7.25 an hour.

The department said the certificates under Section 14(c) of the Fair Labor Standards Act of 1938 will gradually be phased out over a three-year period and that the department will discontinue the issuing of new certificates. It follows a review of the program that began last year.

According to a 2020 Labor Department report, more than 100,000 people with disabilities are employed at places that pay them less than the national minimum wage.

“This proposal demonstrates the Biden-Harris administration’s dedication to good jobs for workers with disabilities,” acting Labor Secretary Julie Su said in a statement.

Su said there have been “significant” legal and policy developments since the Fair Labor Standards Act was created, meaning employment opportunities and rights for disabled individuals have been expanded.

“With this proposal, the department expects that many workers currently paid subminimum wages under Section 14(c) will move into jobs that pay full wages, which will improve their economic wellbeing and strengthen inclusion for people with disabilities in the workforce,” Su said.

Once the new rule is finalized, a three-year period will begin for the phasing out of all certificates with subminimum wages.

The department encourages interested parties to submit comments on the proposal by Jan. 17. Tuesday’s announcement follows stakeholder engagement sessions, where the department heard from workers with disabilities, advocates, service providers and employers that hold the certificates.

“One of the guiding principles of the American workplace is that a hard day’s work deserves a fair day’s pay, and this proposal ensures that principle includes workers with disabilities,” Jessica Looman, administrator of the department's Wage and Hour Division, said in a statement.