Government Agency Recommends Ending Subminimum Wage
A federal civil rights commission is calling for an end to a policy that allows people with disabilities to be paid less than minimum wage describing the program as “rife with abuse.”
In a report out Thursday, the U.S. Commission on Civil Rights said the time has come to phase out subminimum wage.
Employers are currently able to obtain certificates from the Department of Labor allowing them to pay workers with disabilities less than the federal minimum wage of $7.25 per hour. The provision in Section 14(c) of the Fair Labor Standards Act dates back to 1938.
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The practice has come under fire in recent years for being discriminatory and exploitative, with advocates putting an increasing emphasis on the opportunities available through competitive integrated employment even as some families have fought to maintain access to sheltered workshops.
Cities and states from Alaska to New Hampshire have imposed restrictions on paying people with disabilities less than minimum wage. And, at the national level, both Republican and Democratic Party platforms have supported legislation doing away with subminimum wage. In 2019, the House of Representatives voted for the first time to outlaw subminimum wage, though the bill known as the Raise the Wage Act has not been considered in the Senate.
Now the civil rights commission — an independent, bipartisan agency established by Congress — is the latest to urge an end to the practice. The recommendation comes after the commission received thousands of comments both for and against subminimum wage and collected data and testimony from lawmakers, federal agencies, self-advocates, family members, service providers and experts in the field. Site visits were also conducted to observe people with disabilities working for both subminimum and competitive wages.
In its report, the commission said that regulators have “repeatedly found providers operating pursuant to Section 14(c) limiting people with disabilities participating in the program from realizing their full potential while allowing providers and associated businesses to profit from their labor.”
Meanwhile, “failures in regulation and oversight … have allowed and continue to allow the program to operate without satisfying its legislative goal to meet the needs of people with disabilities to receive supports necessary to become ready for employment in the competitive economy.”
Though the number of sheltered workshops — where employees earn less than minimum wage — has declined, there are still more than 1,500 sheltered workshops employing over 100,000 people with disabilities, according to the report. The latest federal data shows there are employers with 14(c) certificates in 46 states and Washington, D.C. Workers employed in these situations earned $3.34 per hour, on average, between 2017 and 2018.
The civil rights agency notes that people with developmental disabilities who are currently working for subminimum wage “are not categorically different in level of disability” from those working in competitive integrated employment. And, the report points out that workplace integration of people with disabilities is legally required by the Americans with Disabilities Act, negating the need for subminimum wage.
The commission recommends that Congress repeal Section 14(c) with a phaseout period to allow people with disabilities and service providers to transition away from subminimum wage and toward models favoring competitive integrated employment. This should come with expanded funding from Congress for supported employment as well as better oversight as the 14(c) program winds down as well as data collection on outcomes of former subminimum wage workers, the report said.
“The commission today calls for the end of the Section 14(c) program, because it continues to limit people with disabilities from realizing their full potential,” said Catherine E. Lhamon, chair of the Commission on Civil Rights. “In addition the program suffers from wildly insufficient federal oversight and civil rights review, and apparently routine noncompliance, begging the question why we as a nation continue its operation.”
Sen. Patty Murray, D-Wash., who is a lead sponsor of the Raise the Wage Act, hailed the commission’s findings.
“For too long, some workers with disabilities have been relegated to subminimum wage jobs where they are segregated from their peers and paid far too little. As this report shows, this is a violation of their civil rights — and we need to act now to end it,” she said.