Subminimum Wage for Disabled

sub minimum wage for disabled
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Section 14(c) of the Fair Labor Standards Act (FLSA), passed 1938, allows public and private employers to obtain special certificates from the Department of Labor’s Wage & Hour Division that allow them to compensate workers with significant disabilities at rates below the current federal minimum wage based on the individual’s level of measured productivity. This results in a disproportionate number of individuals with intellectual and developmental disabilities being automatically placed into a sub-minimum wage position, usually in segregated facilities (like a sheltered workshop, for example) after exiting the public school system. Individuals with significant disabilities and their families are often told that there are no other options available to them, and are often pressured by public systems and service provider agencies to enter into this option and often has little relationship with an individual’s ability.

Criticisms of this practice range from charges of discriminatory wage setting to arguments that the measures of productivity are arbitrary and as such set standards for workers with disabilities that are not established for workers without disabilities. The Collaboration to Promote Self-Determination (CPSD) supports the implementation of a balanced approach to phase out and eventually eliminate FLSA sub-minimum wage provisions under Section 14(c) for all individuals (regardless of ability), while simultaneously building capacity to support individuals with significant disabilities in integrated employment paid at or above the prevailing minimum or industry wage rates.
Collaboration to Promote Self Development – Background on Section 14c of the Fair Labor Standards Act


  • Ban the sub minimum wage for people with disabilities similar to Alaska, New Hampshire and Maryland
  • Establish soft time limits for any individual receiving a special minimum wage to ensure that an individual doesn’t permanently receive a special minimum wage in a sheltered setting (Page 8)
  • Reevaluate the way in which productivity percentages are calculated. A more robust and less subjective formula can be developed which eliminates the requirement of employers determining the local prevailing wage as a basis for worker productivity (Page 8)
  • Expand pre-vocational training programs, an option currently available through Medicaid 1915(c) waivers (Page 8)
  • Require sheltered workshops, subsidized by Section 14(c), to adequately train people with disabilities for real-world employment and provide job-relevant skills. (Page 18)
  • Prohibit city, county and state contractors from paying a sub-minimum wage (Page 46)


Texas Constitution
Code – Labor
Chapter – 21 Employment Discrimination

Think Progress – Maryland To Become The Second State To Guarantee Fair Minimum Wage For Workers With Disabilities

Think Progress – Obama Will Now Include Workers With Disabilities In His Minimum Wage Hike

Buffalo News – ‘Sub minimum wage’ for disabled workers called exploitative

Oregon’s sheltered workshops for the disabled to be phased out under terms of settlement

New Hampshire Public Radio – New Hampshire Bans Lower-Than-Minimum Wages For Workers With Disabilities

Huffington Post – Hillary Clinton Takes A Stand Against ‘Sub minimum Wage’ For People With Disabilities

Huffington Post – Goodwill Minimum Wage Loophole Will Shock You

USA Today – Obama to include disabled workers in minimum wage order

Vox – Hillary Clinton wants to end the loophole that lets disabled workers earn less than minimum wage

NPR – Sub minimum Wages For The Disabled: Godsend Or Exploitation?

Bill Moyers – For Goodwill’s Disabled Workers, Spotlight Is on Sub minimum Wage

Bill Moyers – The Minimum Wage Doesn’t Apply to Everyone

U.S. Department of Labor – Sub minimum Wage Employment for Workers with Disabilities

Al Jazeera – Goodwill paying disabled employees pennies per hour

Fortune – Disabled workers left in the cold on minimum wage

The Guardian – 10,000 workers with disabilities paid below minimum wage: when will they get justice?

National Federation of the Blind – The Sin of Omission: A Rebuttal of Goodwill’s Policy Statement on Sub minimum Wage Payments to Workers with Disabilities

Washington Post – Disabled people are allowed to work for pennies per hour — but maybe not for much longer

Public Source – Vermont closed workshops for people with disabilities; what happened next?

Providence vocational school to pay more than $250K in back wages

N.J. official may reconsider phasing out sheltered workshop program for disabled

Texas Tribune – State Program Favoring Disabled Workers Stirs Debate

Texas Tribune – State Disabled Worker Program Faces Overhaul

Houston Chronicle – Pressure is rising to end system that allows disabled workers to be paid pennies per hour

Paying disabled workers less than minimum wage is legal in the US. Alaska has now banned it.

Seattle Outlaws Subminimum Wage for People with Disabilities

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