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The Biden administration has announced plans to phase out a decades-old program that allows employers to pay workers with disabilities less than the federal minimum wage.
Something you should know before you read: Back in 1938, the United States introduced Section 14(c) of the Fair Labor Standards Act, a provision allowing employers to apply for certificates to pay workers with disabilities less than the federal minimum wage. This policy was based on the belief that workers with disabilities might not achieve the same productivity levels as their non-disabled peers, and the lower wage threshold was intended to encourage businesses to hire them. At the time, it was seen as a way to integrate individuals with disabilities into the workforce by offering employers a cost-saving incentive. However, the rule has since been criticized by some for undervaluing the skills and contributions of disabled workers.
As of recent data, approximately 800 employers across the United States currently use Section 14(c) certificates to pay workers with disabilities less than the federal minimum wage. These employers collectively affect around 40,000 workers. According to the US government, over half of these workers earn less than $3.50 an hour.
What’s going on now: In an announcement, the Biden administration proposed phasing out Section 14(c) and ending certificates that permit subminimum wages to be issued. The entire process would take over three years, and once completed, workers with disabilities would be guaranteed at least the federal minimum wage of $7.25 per hour.
US official reacts: In a statement, Acting Labor Secretary Julie Su said, “This proposal demonstrates the Biden-Harris administration’s dedication to good jobs for workers with disabilities. 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.”
