What Employers Need to Understand About the Subminimum Wage
People with significant developmental disabilities have long suffered from the widespread belief that they have a limited ability for productive work.
In 1938, that assumption led the Congress to pass the Fair Labor Standards Act, giving employers the right to pay those with disabilities less than the minimum wage.
The subminimum wage was born. Somewhat remarkably—that law is still in force.
Employers in Connecticut and elsewhere can obtain what are called 14(c) certificates from the Department of Labor that allows those employers to pay workers with disabilities less than the minimum wage.
Today, approximately 150,000 disabled workers in the U.S. are legally permitted to be paid in this fashion.
Roughly 1,760 of those certificates are in force in Connecticut at this time. Most of these workers are employed in sheltered workshops run by nonprofits.
U.S. House Acts
The U.S. House of Representatives recently took a first step in eliminating this wage loophole.
In a bill primarily designed to raise the federal minimum wage to $15 an hour (Raise the Wage Act), was a provision to end the subminimum wage over time.
Efforts at the state and local level to restrict the use of 14(c) certificates have grown in recent years—but this latest action is the first time since 1938 Congress has seriously considered a change.
Most advocates for the disabled are hailing the actions by the U.S. House and hoping it leads to passage of an act called the Transformation to Competitive Employment Act.
That act “seeks to provide states, services providers, subminimum wage certificate holders, and other agencies with the resources they need to create competitive integrated employment service delivery models and the inclusive wraparound services that some individuals with disabilities will need.
“This legislation is designed to strengthen and enhance the disability employment service delivery systems throughout the states while the subminimum wages that are currently allowed under Section 14(c) of the Fair Labor Standards Act are phased out over a six-year period.”
Where’s all this effort headed?
Any bill that passes in the House faces a most uncertain future in the U.S. Senate.
Hopefully, any bill that reaches the president’s desk for signature will provide both employers and the disabled with reasonable and practical solutions.
About the author: Shel Myers is a partner at the labor and employment law firm of Kainen, Escalera & McHale in Hartford.
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