Story at a glance
- The Fair Labor Standards Act allows states and employers to pay workers with disabilities below the federal minimum wage.
- That has allowed persons with disabilities to make only $3.34 per hour, with some places paying even less than that.
- President Biden’s Build Back Better bill includes money to encourage states and employers to move away from subminimum wages so workers with disabilities can make at least minimum wage.
President Biden’s Build Back Better bill has been lauded for including historic climate change provisions, health care and infrastructure initiatives, but it also carries the opportunity for people with disabilities to finally make at least minimum wage.
People with disabilities are legally allowed to be paid below the federal minimum wage, as part of the Fair Labor Standards Act of 1938 (FSLA). It’s called subminimum wage and it's allowed under Section 14(c), meant to encourage employers to hire certain individuals that are impaired by physical or mental disabilities so they don’t lose out on employment opportunities.
However, the current federal minimum wage is $7.25 per hour, which means workers with disabilities can be paid any amount less than that. The federal government has acknowledged this is problematic, with a 2020 subminimum wage report saying that, “the program is rife with abuse and difficult to administer without harming employees with disabilities, as reflected in over 80 percent of cases investigated.”
According to the report, the U.S. Department of Labor estimates that more than 100,000 people with disabilities are employed at places that are paying them less than minimum wage. Though some states have prohibited subminimum wages to a certain extent, at least 46 and the District of Columbia have at least one certificate allowing employers to pay subminimum wages.
Based on 2018 Census data, less than 40 million people with disabilities live in the U.S., making up about 12 percent of the total population. And in 2018, only about 35 percent of people with disabilities were employed.
The report also revealed that between 2017 and 2018, the average wage of a person with a disability was $3.34 per hour, working an average of 16 hours a week. That adds up to only $53.44 per week, and $213.76 per month.
The National Down Syndrome Society points out that people employed under the 14(c) certificates are often trained to perform tasks that don’t actually build capacity or transfer into skills that will help them land other jobs. “This practice reinforces the stigmatic misconception that people with disabilities are less productive and creates an artificial competitive barrier to future employment opportunities.”
Congress is trying to fix this, with Sen. Bob Casey (D-Pa.) announcing in November the Transformation to Competitive Integrated Employment Act (TCIEA) that aims to provide grants to states or employers to go toward transitioning to a business model that pays workers with disabilities at least minimum wage.
Biden’s Build Back Better bill incorporates much of TCIEA by providing $300 million toward a multi-year grant program that would assist states and employers to transform their business models to provide at least the minimum wage applicable in that state. It doesn’t completely outlaw FSLA provisions that allow subminimum wage, but through issuing grants the federal government will require states to provide assurances that it won’t permit employers to use subminimum wage certificates.
Build Back Better also proposes giving $24 million in grants to states that have already eliminated the certificates allowing subminimum wages and another $6 million toward establishing a national technical assistance center to assist states and employers in their transition to end subminimum wages.
The bill is still being negotiated on Capitol Hill, but if passed, it could finally incentivize states and employers to pay workers with disabilities a higher wage, an effort disability advocates have been pushing for years now.
“It has been over 80 years since the Fair Labor Standards Act was passed and people with disabilities were excluded from minimum wage protections. It is past time to right this wrong,” said the Autistic Self Advocacy Network in response to TCIEA being introduced.
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