Department preliminarily finds subminimum wages no longer necessary to prevent curtailment of employment opportunities
WASHINGTON – The U.S. Department of Labor today announced a proposed rule that would phase out the issuance of certificates allowing employers to pay some workers with disabilities less than the federal minimum wage, currently $7.25 per hour, for the work they perform.
The rule proposes to gradually eliminate certificates employers can apply for under Section 14(c) of Fair Labor Standards Act that allow them to pay certain workers with disabilities subminimum wages. The department proposes to discontinue the issuance of new certificates and establish a three-year phase-out period for employers with existing certificates once a final rule becomes effective.
“This proposal demonstrates the Biden-Harris administration’s dedication to good jobs for workers with disabilities,” said Acting Secretary of Labor Julie Su. “In the decades since Section 14(c) was included in the Fair Labor Standards Act, there have been significant legal and policy developments that have dramatically expanded employment opportunities and rights for individuals with disabilities. With this proposal, the department expects that many workers currently paid subminimum wages under Section 14(c) will move into jobs that pay full wages, which will improve their economic wellbeing and strengthen inclusion for people with disabilities in the workforce.”
The proposed rule would do the following:
- Cease the department’s issuance of new Section 14(c) certificates starting on the effective date of a final rule.
- Institute a three-year period beginning on the effective date of a final rule for employers holding existing Section 14(c) certificates to gradually cease paying subminimum wages to workers with disabilities.
“One of the guiding principles of the American workplace is that a hard day’s work deserves a fair day’s pay, and this proposal ensures that principle includes workers with disabilities,” said Wage and Hour Administrator Jessica Looman. “Since the enactment of the Fair Labor Standards Act in 1938, opportunities and training have dramatically expanded to help people with disabilities obtain and maintain employment at or above the full federal minimum wage. Similarly, employers today have more resources and training available to recruit, hire and retain workers with disabilities in employment at or above the full minimum wage, and this proposed rule aligns with that reality.”
“The Biden-Harris administration is committed to creating a more inclusive workforce, where individuals with disabilities can thrive without being held back,” said Assistant Secretary of Labor for Disability Employment Policy Taryn Williams. “This proposal would help ensure that workers with disabilities have access to equal employment opportunities while reinforcing the fundamental belief that all workers deserve fair compensation for their contributions. We will continue to invest in the potential of every worker and foster workplaces that celebrate inclusion.”
On Sept. 26, 2023, Acting Secretary of Labor Julie Su announced that the department would conduct a comprehensive review of the Section 14(c) program. As part of this review, the department held a series of stakeholder engagement sessions to hear diverse views on Section 14(c) from members of the public, including workers with disabilities and their family members, disability rights advocates, service providers and Section 14(c) certificate holders. The department considered the wide-ranging input gathered from these sessions in the formulation of this proposed rule.
The department encourages interested parties to submit comments on the proposal once it is published in the Federal Register. All comments must be received by 11:59 p.m. EST on Jan. 17, 2025, for consideration in this rulemaking. Comments received after the comment period closes will not be considered. Learn more about the proposed rule and instructions for submitting comments.
