Lawmakers Call For End To Subminimum Wage
There is a new effort underway in Congress to do away with rules that allow employers to pay people with disabilities less than minimum wage.
A bill recently introduced in both the U.S. Senate and the House of Representatives would put an end to what’s known as subminimum wage.
Under a law dating back to the 1930s, employers can obtain 14(c) certificates from the Department of Labor allowing them to pay people with disabilities less than the federal minimum, currently $7.25 per hour. Workers who are paid at a lower rate are supposed to be compensated based upon their productivity level compared to that of someone without a disability.
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There has been a push in recent years to outlaw subminimum wage, with critics saying that the system is exploitative and leaves some people with disabilities earning just pennies per hour. On the flip side, however, there are families and advocates who say that the wage system still plays an important role, particularly for those with severe disabilities who benefit from having a sense of purpose in an environment where they are surrounded by peers.
The new bill called the Transformation to Competitive Employment Act, or S. 260, would require the Labor Department to stop issuing 14(c) certificates. Existing certificates would be phased out over a six-year period. In addition, the measure would make available grants and establish a technical assistance center to help businesses that currently pay subminimum wage transition toward a business model employing people with disabilities in a competitive, integrated fashion.
“Although we have made progress, there are still far too many people who aren’t able to fully realize the American dream because of outdated laws and social stigmas,” said Sen. Bob Casey, D-Pa., who introduced the measure along with Rep. Bobby Scott, D-Va.
The latest proposal comes just weeks after Democrats in the House and Senate introduced legislation to raise the federal minimum wage to $15 per hour. That bill — called the Raise the Wage Act, or H.R. 582 — also includes a similar plan to phase out subminimum wage for people with disabilities within six years.
In addition, Casey introduced legislation recently aimed at encouraging employers to hire people with disabilities. The Disability Employment Incentive Act, or S. 255, would increase three existing tax credits available to employers that hire people with disabilities or businesses that make their locations more accessible.