New Rules Designed To Curtail Subminimum Wage Employment
New federal rules are taking effect that will impose strict limits on people with disabilities being paid less than minimum wage.
For the first time, young people with disabilities must satisfy a series of requirements before they can earn what’s known as subminimum wage.
What’s more, those who already work for less than the minimum must regularly be provided opportunities to explore other career options.
Advertisement - Continue Reading Below
The changes were set in motion with the 2014 passage of the Workforce Innovation and Opportunity Act, an update to federal labor law, but officially took effect late last month.
Under a law dating to the 1930s, employers can obtain special certificates from the U.S. Department of Labor allowing them to pay workers with disabilities less than the federal minimum of $7.25 per hour. To qualify for such work, the earning potential or productivity of individuals with disabilities must be impaired and their pay must be commensurate with rates paid other workers for similar jobs.
Now, however, employers with the so-called 14(c) certificates will still be able to pay lower wages, but their pool of potential employees is likely to shrink.
Existing employees earning subminimum wage as of July 22 can remain in their jobs, but must receive career counseling and information about training opportunities once every six months during the first year and annually after that.
Meanwhile, the new law is designed to curtail the pipeline of young people with disabilities entering these types of work environments. Those age 24 or younger who don’t already have jobs earning less than minimum wage will not be able to start such employment without first showing that they have received transition services, pursued employment through vocational rehabilitation and have been provided information and referrals to other options in their area.
In cases where employers fail to ensure that workers meet the new requirements, the secretary of labor “may assess back pay and any other appropriate relief in the same manner as he would against any other employer who failed to pay the minimum wage,” according to a Labor Department bulletin about the rules.