By: Ty Hyderally, Esq. and Kenny Delgado

January 7, 2025

Although the federal minimum wage is $7.25, there is a group that still can receive wages below that minimum. Disabled workers who have disabilities that may prevent them from being fully capable of working may be paid below the minimum wage. The Fair Labor Standards Act (FLSA) section 14(c) allows businesses to apply for certificates that allow them to hire disabled workers and pay disabled workers a subminimum wage. This provision was included initially to allow disabled workers to find jobs and work even if they provided less labor than their standard workers. This exemption came into law in 1938 with the initial passing of the FLSA and has remained active although the general treatment of persons with disability has undergone societal and legislative changes.

The Department of Labor (DOL) is seeking to end this practice and allow those disabled workers to receive at least minimum wage for the work the do. The proposed rule will immediately end the issuance of the certificates that allow employers to pay the subminimum wages and will start a three-year grace period for the lapsing of currently issued certificates

The DOL has stated that the issuance of the certificates and decision to no longer issue them is entirely within the scope of powers given to the DOL by the FLSA. The primary function of the certificates within the FLSA was to create a guarantee of the right to work to disabled individuals who may not have been able to find employment without the creation of subminimum wages. The FLSA provided guidance that these employees were to be paid relative to their ability to contribute labor as long as that pay was no less than half the wage of a fully capable employee and the law requires reevaluation of that pay every six months. In their rule proposal the DOL is very clear that the intent of the certificates was to aid disabled Americans in finding work, not to create a cheaper workforce for employers.

Therefore, the DOL concludes that it is no longer in the best interest of employees to continue issuing the certificates. The DOL is clear that there are now enough guardrails through the American with Disabilities Act and other anti-discrimination laws that the subminimum wage exemptions are no longer necessary. The DOL notes that the last time there was any change to section 14 of the FLSA was in 1989, a year prior to the passage of the ADA which would do more to protect people with disabilities than any American law before that.

As with all things that are done with good intentions there are instances of bad actors who take advantage of labor laws.  The DOL, through the Wage and Hour Division, investigated 89 cases involving 14(c) certificates and found evidence of violations in 88% of those cases recovering $2 million for over 3,000 employees in 2023. This occurred even though there is a decreasing number of certificates issued, and employees being paid under those certificates.

Some states have been proactive in rescinding their allowances of subminimum wage workers and rely instead on their versions of the ADA to create a more equitable economy for all. If you or a loved one feels that an employer has violated federal or state wage laws, please seek out an experienced employment attorney.

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