FEDERAL LEGISLATION

TRANSFORMATION INTO COMPETITIVE  INTEGRATED EMPLOYMENT ACT (H.R. 2373)

The Fair Labor Standards Act (FLSA) of 1938 establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local government (U.S. Department of Labor). Within this law, there is a provision called Section 14(c). This allows employers to pay people with disabilities less than the minimum wage, also known as subminimum wage.

People with disabilities who are employed under the 14(c) certificates are often trained to perform mundane tasks that do not build capacity or transfer into skills necessary to transition into other employment options. Only 5% of individuals who go into sheltered employment obtain competitive, integrated employment (GAO Report). Additionally, more than 50% of individuals working under a 14(c) certificate earn less than $2.50/ per hour (GAO Report). This practice reinforces the stigmatic misconception that people with disabilities are less productive and creates an artificial competitive barrier to future employment opportunities.

Phasing out subminimum wages will help pave the way for equality in the workplace for people with Down syndrome and other disabilities, many of whom work in settings that fail to prepare them for integrated employment in the mainstream economy. The Transformation into Competitive Integrated Employment Act (H.R. 2373) establishes a grant program and a timeline to successfully transition out of the 14(c) certificate model. This will give people with disabilities access to work and training environments that will allow them to acquire meaningful skills and better employment opportunities.

STATE LEGISLATION

NDSS is working at the state level to pass bills to phase out the payment of subminimum wage under Section 14(c) of the Fair Labor Standards Act. States that have taken steps to guarantee a minimum wage to workers with disabilities include:

  • Alaska eliminated subminimum wage through a regulatory change that went into effect on February 16, 2018.
  • Maryland (HB 420 / SB 417) became law in May 2016 phasing out special wage certificates that allow employers to pay disabled workers according to productivity rather than hours worked. This law will affect all 36 of Maryland’s “sheltered workshops” (nonprofit organizations that hire people with disabilities and pay them below-minimum-wage to perform basic tasks).
  • New Hampshire  (SB 47) passed in May 2015 banning employers from paying workers with disabilities less than the minimum wage, with a few exceptions including some training programs and family-owned businesses.
  • Vermont – A leader in this area, Vermont began moving toward integrated employment for people with disabilities in the early 1980s with a partnership between the University of Vermont and state agencies. Vermont closed its last sheltered workshop in 2002.
  • The city of Seattle, WA passed CB 119220, an ordinance that removed the authority to pay people with disabilities subminimum wage. The state of Washington still allows subminimum wage statewide.
  • The city of Reno, NV has passed resolution D. 1, which prohibits the payment of subminimum wages to workers with disabilities.
  • Texas (SB 753) passed legislation in 2019.
  • Oregon (SB 494) passed legislation in 2019 to phase out subminimum wage by 2023.
  • King County, WA: In 2019, the Metropolitan King County (WA) County Council prohibited the county and its contractors from paying subminimum wages to employees with disabilities.
  • Maine (H.P. 1340) would prevent employers in the state from paying individuals with a disability below the minimum wage.
  • Washington (SB 5284) enacted legislation in 2021 to phase out subminimum wage.

The following states currently have pending legislation to phase-out subminimum wage: