The U.S. Department of Labor (DOL) has proposed a rule aimed at phasing out the issuance of subminimum wage certificates for workers with disabilities over a three-year period, which would put an end to Section 14(c) subminimum wage practices. Under the current Fair Labor Standards Act, employers can pay wages below the minimum rate to workers whose disabilities affect their earning capacity, provided it is deemed necessary to prevent the reduction of employment opportunities. However, with significant advancements in employment opportunities and resources for hiring and retaining workers with disabilities, subminimum wages have become increasingly unnecessary and outdated. Since the last substantive update of these regulations in 1989, the landscape for employment opportunities for people with disabilities has vastly improved due to the disability rights movement and changing social norms. Many states and local jurisdictions have already restricted or banned the practice of paying subminimum wages.
The number of Section 14(c) certificate holders has seen a notable decline, dropping nearly 86% since 2001. Those who receive subminimum wages are predominantly individuals with intellectual or developmental disabilities, earning less than $3.50 per hour, and in some cases, earning $1 or less per hour. The new rule aims to give employers adequate time to adjust their business models to meet minimum wage requirements, while also allowing workers with disabilities to seek new workplace accommodations, undergo job training, and explore public benefits and income counseling. This rule change comes after a September 2023 DOL announcement to review the Section 14(c) program and is supported by feedback from a variety of stakeholders, including workers with disabilities, their families, disability rights advocates, service providers, and current certificate holders.
Improvements in Employment Opportunities and Resources
The landscape for employment opportunities for individuals with disabilities has significantly improved over the past decades, with many advancements resulting from the disability rights movement and evolving societal norms. Employers now have access to resources and tools that can help them effectively hire and retain workers with disabilities while providing them with competitive wages. This shift has made subminimum wages increasingly unnecessary as employers realize the capabilities and contributions that individuals with disabilities can bring to the workforce. The DOL emphasized that the last substantive update to the regulations was in 1989, and much has changed since then.
Technological advancements, workplace accommodations, and changes in attitudes have all contributed to a more inclusive and equitable employment environment for people with disabilities. States and local governments have recognized these changes and many have already restricted or banned the practice of subminimum wages. As a result, there has been a significant decline in the number of Section 14(c) certificate holders. Since 2001, the number of certificate holders has dropped by nearly 86%, indicating a shift towards more inclusive employment practices.
Transition Period and Support Systems
The DOL’s proposed rule includes a phased approach to ending the issuance of subminimum wage certificates, providing a three-year transition period for employers and workers with disabilities. This approach is aimed at giving employers enough time to adapt their operational and financial models to accommodate minimum wage payments. During this period, no new subminimum wage certificates will be issued, and renewals for existing certificates will be limited to a maximum of three years. This strategy is designed to minimize the potential disruption for businesses and ensure a smoother transition towards fair wages for all workers.
In addition to giving employers time to adjust, the transition period will allow workers with disabilities to seek new workplace accommodations, undergo job training, and explore public benefits and income counseling. This multifaceted approach aims to provide workers with the tools and support they need to thrive in their careers while earning competitive wages. The proposed rule was informed by feedback from various stakeholders, including workers with disabilities, their families, disability rights advocates, service providers, and current certificate holders, ensuring that the perspectives of those directly affected were considered in the decision-making process.
Moving Towards Inclusivity and Equity in the Workforce
The U.S. Department of Labor (DOL) has proposed a new rule to phase out subminimum wage certificates for workers with disabilities over three years, thereby ending Section 14(c) wage practices. Currently, the Fair Labor Standards Act allows employers to pay less than minimum wage to workers with disabilities if it’s necessary to prevent job loss. However, with advancements in employment opportunities and resources for workers with disabilities, subminimum wages are now seen as outdated. The last major update to these regulations was in 1989, and since then, the employment landscape has improved significantly due to the disability rights movement and evolving social norms. Many states and local governments have already restricted or banned subminimum wages.
The number of holders of Section 14(c) certificates has plummeted nearly 86% since 2001. Those earning subminimum wages are mostly individuals with intellectual or developmental disabilities, often making less than $3.50 per hour, sometimes as low as $1 per hour. The new rule aims to give employers time to adjust their business models and comply with minimum wage laws, while helping workers with disabilities seek new accommodations, job training, and income counseling. This change follows a September 2023 announcement by the DOL to review Section 14(c) and is backed by input from workers with disabilities, their families, advocates, service providers, and current certificate holders.