United Cerebral Palsy and its network of 58 affiliates, including 56 in the United States and two in Canada, are among the thousands of nonprofit service providers across the country preparing for the proposed phase-out of the federal subminimum wage and evaluating how it would impact the employment opportunities and incomes of people with disabilities.
The application of the subminimum wage has been guided by Section 14(c) of the Fair Labor Standards Act since 1938. The Act allows employers that receive a certificate to pay subminimum wages — wages less than the federal minimum wage of $7.25 — to some workers with disabilities. Since that time, many individuals with disabilities have found opportunities to work in jobs that compensated them at wages lower than the official federal minimum wage or the wage they would otherwise earn in a competitive environment.
A movement to eliminate or phase-out this employment pathway has evolved over the last few years, led by state and local governments. Some local laws prohibit employers from paying subminimum wage (Disability Scoop, January 2020).
One of the main reasons for this opposition is a view that allowing employers to pay subminimum wage discriminates against people with disabilities and is inconsistent with policy goals established under the Americans with Disabilities Act (ADA). Concerns about possible exploitation of low-wage workers also exist; tens of thousands of people with disabilities across the United States earn an average of $3.34 an hour, according to a 2020 report by the U.S. Commission on Civil Rights.
At the same time, others see the important role of the subminimum wage certification program in ensuring opportunities for individuals with disabilities to find employment and training options they otherwise would not have. President Obama recognized this complex and important trade off in a letter to the National Council on Disability in 2012. He noted that while many advocates argue for the abolition of section 14(c), “the subminimum wage certification program still has an important role among a range of employment options because it provides opportunities to people with disabilities who are unable to obtain competitive employment jobs.” Many disability service providers see value in those programs in helping disabled clients get training and experience that help them get a foothold in the workforce; many people in the disabled community, including family members, view those programs as important to their lives and development.
As part of broader policy efforts to raise the overall minimum wage, the movement to eliminate subminimum wage programs has gained traction in the new Congress and with the Biden Administration. Indeed, President Biden pledged during his campaign in 2020 to enact legislation “eliminating the subminimum wage based on disability.”
United Cerebral Palsy supports policies that help individuals with disabilities have access to employment opportunities and supports that can increase their financial security and help them develop careers. Given concerns about discrimination and abuse of the 14(c) program and changes in the employment landscape to technology-focused jobs, tele-commuting, and other factors, UCP believes an alternative approach is now needed — and possible with additional support of policymakers.
We believe the 14(c) program should be phased out gradually to ensure that people with disabilities are able to transition with confidence and financial security into competitive employment or other service options. However, to ensure that individuals do not get left behind, we believe federal and state guidelines and corresponding funding should accompany any legislation in this area to ease the phase-out of 14(c) by nonprofit service providers, including UCP affiliates which continue to rely on the program.