Biden Administration Proposes Ending Subminimum Wage For Disabled Workers

The Biden administration has proposed phasing out a program that allows employers to pay workers with disabilities below the federal minimum wage. 

The U.S. Department of Labor (DOL) is currently accepting public comments on the proposal, which would end the issuance of new certificates under Section 14(c) of the Fair Labor Standards Act and phase out subminimum wages over a three-year period for existing certificates.

The subminimum wage program, established in 1938, was initially designed for injured veterans, but now primarily benefits workers with disabilities in “sheltered workshops.” 

These workers are paid based on productivity or a per-item rate, with some earning as little as 25 cents per hour, according to SHRM.

The proposal follows a significant decline in participation over the years. 

In 2001, over 400,000 workers were paid subminimum wages; today, the number has dropped to around 40,000. 

Despite this, some lawmakers and disability advocates argue that eliminating the program could reduce job opportunities and support services for workers with disabilities, as sheltered workshops often provide essential training and a sense of community.

While some states have already moved to phase out the program, the proposed rule remains under review, with public comments open until January 17, 2025. 

The debate continues over balancing fair wages with employment opportunities for individuals with disabilities.