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As of July 2024, more than 38,000 disabled people (PDF)—90 percent of whom have intellectual or developmental disabilities (PDF)—earned subminimum wages. The majority of these workers earn under $3.50 per hour (PDF), less than half of the federal minimum wage ($7.25).
Authorized under Section 14(c) of the Fair Labor Standards Act in 1938, the subminimum wage was originally intended to create employment opportunities for disabled people at a time when many were institutionalized and excluded from the education system and economic opportunities.
In recent decades, subminimum wage employment has declined as disabled people’s rights, access to education, and employment opportunities have expanded. The 2014 Workforce Innovation and Opportunity Act, the law governing the public workforce system, prioritizes competitive integrated employment (CIE) for disabled people. CIE is defined as a job where the worker earns the prevailing minimum wage, works alongside nondisabled workers, receives the same benefits as nondisabled workers, and has opportunities for advancement.
The proposed federal rule follows actions by more than two dozen states to phase out or disincentivize 14(c) programs through legislation or state agency initiatives. Research has shown 14(c) programs don’t lead to integrated employment and create economic precarity for people with disabilities. With the proposed rule’s comment period ending January 17, the incoming Trump administration will ultimately have the opportunity to support the financial security and dignity of disabled people by moving the rule forward.
Whether 14(c) is phased out at the local, state, or federal level, insights into how states have eliminated subminimum wages can help other state policymakers develop robust employment pathways for disabled people and better support their overall economic security.
Read the full article at: www.urban.org