House Majority Leader Steny Hoyer has announced that the U.S. House of Representatives will take up the Raise the Wage Act during the week of July 15. Headlining the act, as described by The Century Foundation’s Bill Rodgers and Amanda Novello, is an increase of the federal minimum wage from $7.25 per hour to $15 per hour by 2025. But, if the policy passes through the House, the fine print of the bill would also eliminate provisions in the law since 1938 allowing employers to pay Americans living with disabilities a wage significantly lower than the minimum wage floor.
Since 1938, Section 14(c) of the Fair Labor Standards Act has authorized employers who have received certification from the U.S. Department of Labor to pay workers with disabilities less than the federal minimum wage. These individuals typically work in work centers consisting exclusively or primarily of people with disabilities, often manufacturing commodity goods for the private market and government contracts (historically known as sheltered workplaces). Rather than set a specific minimum wage for these workers, each workplace can set wages based on the level of productivity of workers with disabilities. This productivity-based pay is quite different from other sub-minimum wages, like paying tipped workers $2.13 per hour only if their tips meet the $7.25 threshold. Those in 14(c) workplaces have no similar hard and fast rule. Adjusted pay for workers with disabilities comes from policy written with the implication of lower assumed productivity. As a result, in some 14(c) workplaces, workers with disabilities are paid as little as $2 per hour, and while there are venerable agencies operating sheltered workplaces, there have been high profile instances of worker abuse such as in an Iowa meat processing plant where workers with disabilities were housed in cockroach infested dorms.
Rather than set a specific minimum wage for these workers, [sheltered workplaces] can set wages based on the level of productivity of workers with disabilities
Markedly, provisions for a sub-minimum wage under 14(c) contrast sharply with other developments in policies aiming to provide human rights for Americans with disabilities. Since 1990, the Americans with Disabilities Act has not only protected the disabled from discrimination in the workplace, but has required employers to adjust aspects of their workplaces to help employees with disabilities succeed. Education policy under the Individuals with Disabilities Education Act provides students with disabilities the right to necessary support in receiving a free and appropriate public education (FAPE), one that is on par with that of students without disabilities. The corollary drive in employment policy is to provide people with disabilities with reasonable accommodations and services needed to succeed, show their talents, and thrive in jobs, ensuring equality between workers. The Office of Disability and Employment Policy (ODEP), a sub-cabinet agency of the Department of Labor, recently said in 2018 that one of it’s critical priorities is an Employment First policy. Gaining support in numerous states, this approach focuses on providing education support for people with disabilities to find employment in standard jobs alongside their peers without disabilities. One such state-level policy change exemplary of this drive is when, in 2014, Alaska became the third state to bar a lower minimum wage for workers with disabilities. Moreover, just this year, Texas and Washington passed laws barring state agencies from paying sub-minimum wages. Section 14(c) seems out of place among policies that work toward balancing the job sector in favor of equality for employees with disabilities.
One familiar line of opposition to raising the minimum wage posits that doing so will lead to the loss of jobs. But in fact, employment among people with disabilities has increased even as the number of workers in sub-minimum wage, sheltered workplaces has plummeted from 220,000 in 2016 to 127,000 in 2018. The unemployment rate among people with disabilities has dropped to 6.3 percent, down from 13.7 percent a decade ago. But a pathway towards equality for workers with disabilities still needs bold policy change. Nearly 80 percent of people with disabilities don’t have the supports needed to participate in the workforce, and are subsequently not even counted in the unemployment rate.
But recent growth in the job sector holds positive implications for equality. There’s a near record 7.3 million job openings in America today, and that has encouraged employers to have a new appreciation for the contributions that workers with disabilities can bring to their companies. Now provides a unique opportunity to dramatically increase employment for people with disabilities without compromising on the basic right to a minimum wage. A hot economy incentivizes employers to take a closer look at the forfeited value that those workers with disabilities can offer. Several organizations are working, for example, to increase employment among people living with autism, many of whom have special interests and attention to detail that make them well suited for a number of growing occupations.
The Raise the Wage Act, co-sponsored by 205 members of Congress, would take a gradual approach to phasing out Section 14(c) over six years. It would provide for a gradual increase of the minimum wage for these jobs from $4.25 per hour in year one to $12.85 per hour in year five, finally meeting the $15 per hour norm in year six. Even during the transition, this would set a new standard for wages for employees with disabilities. Currently, Section 14(c) is a very difficult piece of policy to enforce. Making downward adjustments to the wages of workers with disabilities relies on logic that, itself, requires adjustment. It is too subjective a standard to enforce compared with other aspects of the Fair Labor Standards Act, those of which look at the dollar amount of regular and overtime pay. As it stands, Section 14(c) is a program that leaves workers vulnerable to exploitation and underpayment.
In a recent forum organized by the Department of Labor, many family members of those employed by sheltered workplaces expressed concerns that a repeal of Section 14(c) would mean losing the community and sense of purpose they believed were tied to those workplaces. One idea to ease the transition is outlined in the Transformation to Competitive Employment Act, which would give states up to $10 million in grants to help phase out Section 14(c) in favor of other models of employment and habilitative services.This represents a common sense approach to transition away from Section 14(c) in ways that would minimize the negative impact among those currently employed in workplaces through these programs, restoring equal protection for workers with disabilities under constitutional law.
The integration of people with disabilities into the economy is good not only for an economy looking to maximize the contributions of its population to continue a long period of economic growth, but also for taking sorely needed steps toward equality for all workers.
The sub-minimum wage repeal provisions in the Raise the Wage Act are an exciting development in an era when people with disabilities, their families, and advocates are accepting no less than full human rights. The integration of people with disabilities into the economy is good not only for an economy looking to maximize the contributions of its population to continue a long period of economic growth, but also for taking sorely needed steps toward equality for all workers.