Labor Department Cracks Down On Subminimum Wage For People With Disabilities
With new guidance and enforcement, federal officials are further clarifying their expectations for employers that pay people with disabilities less than minimum wage.
Under a law dating back to the 1930s, employers can obtain special certificates from the U.S. Department of Labor allowing them to pay workers with disabilities what’s known as subminimum wage. But, with passage of the Workforce Innovation and Opportunity Act in 2014, Congress established strict new limits on the arrangement.
Individuals with disabilities age 24 or younger cannot work for subminimum wage without first showing that they have received transition services, pursued employment through vocational rehabilitation and that they have been provided information and referrals to other options in their area. And, those being paid less than minimum wage must receive career counseling and information about training opportunities once every six months during the first year and annually after that.
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Now the Labor Department is spelling out in more detail what employers need to do to comply with these requirements, particularly in terms of timing and documentation. Importantly, the 12-page bulletin issued late last week points out that employers must pay the full federal minimum wage of $7.25 per hour if they do not have documentation showing that employees have completed all the necessary steps before engaging in work.
The guidance also details how to handle situations where a worker was previously employed by another employer earning subminimum wage or if an employee takes a break from work and then returns to their subminimum wage position. And, the bulletin notes that employees who complain that they have not been provided the required services are protected from retaliation under federal law and could pursue lost wages, damages and other remedies.
“Section 511 of the Rehabilitation Act of 1973, as amended by the Workforce Innovation and Opportunity Act, created significant requirements for employers paying subminimum wages to workers with disabilities,” said Patricia Davidson, deputy administrator of the Labor Department’s Wage and Hour Division. “These requirements help ensure that workers have critical resources and information designed to improve access to competitive integrated employment. The Wage and Hour Division evaluates an employer’s compliance with the Section 511 requirements in every investigation it conducts of an employer that holds a subminimum wage certificate under the (Fair Labor Standards Act). This work protects the rights of workers with disabilities and ensures they receive the full federal minimum wage when it is owed.”
Edwin Nieves, a spokesperson for the Labor Department, said the bulletin was not issued in response to any increase in violations, but is part of an “overall worker protection stance.” More fact sheets and updates to existing documentation about the requirements and enforcement policies surrounding subminimum wage employment are forthcoming, Nieves said.
The guidance comes as the Labor Department said it is suing a Montana employer after an investigation found that it falsely claimed workers with intellectual and developmental disabilities earning subminimum wage were provided required counseling and referrals and informed of available training opportunities. Special K Ranch must pay 35 employees who had been working for as little as $1.17 per hour the full federal minimum wage until they receive the required information and services, the Labor Department said.
“The U.S. Department of Labor will not tolerate wage theft or an employer’s failure to provide the important services and information required under Section 511 to workers with disabilities,” said Solicitor of Labor Seema Nanda. “Special K Ranch’s alleged violations demonstrate a disregard for the law and disrespect for the dignity of workers. Let there be no misunderstanding, the department will take decisive action to protect the rights of workers employed under Section 14(c) of the Fair Labor Standards Act.”