A movement is afoot in Congress and in states to make it illegal for employers to pay people with disabilities less than the minimum wage.
The little-known practice has been allowed since the 1930s as a way to get people with disabilities into the workforce to help build their skills in order to obtain more competitive work later. Oftentimes that transition doesn’t happen, resulting in wages that amount to only cents per hour.
Opponents view the exemption as archaic and say it’s time to phase it out. Proponents of the status quo are concerned that people with disabilities will lose work opportunities. The 50 million people in the U.S. with disabilities already have an unemployment rate of 9%, even as the U.S. overall has a historically low unemployment rate of 3.8%.
Democrats have advanced out of the House Education and Labor Committee the Raise the Wage Act, which increases the hourly minimum wage from $7.25 to $15. That measure would phase out the subminimum wage for workers with disabilities.
Another House measure, the Transformation to Competitive Employment Act, has more outside and bipartisan support. In addition to phasing out the subminimum wage over six years, the bill would provide state and employer grants to move people with disabilities into jobs with higher pay that are alongside workers without disabilities. Many employers that use the subminimum wage are sheltered workshops that only hire workers with disabilities.
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“The goal is not to close doors and shut down places, but to transform the whole way we are thinking about employment,” said an aide to Rep. Bobby Scott, D-Va., the chairman of the Education and Labor Committee who is leading the effort on the House side.
Sen. Bob Casey, D-Pa., sponsored the Senate version of the Transformation to Competitive Employment Act, and he also has a second bill that would give tax breaks to employers who hire more people with disabilities and who make their workplaces more accessible to both employees and customers. His team hasn’t gotten any GOP co-sponsors for the phaseout of the subminimum wage bill yet, but they’re hopeful. During the 2016 election season, for the first time, both parties had the elimination of the subminimum wage in their platforms.
“We never want to harm employers,” an aide to Casey said. “We want to make sure they have the support to make the transformation, and we certainly don’t want to lose those jobs.”
Not everyone is on board. ACCSES, an advocacy group representing organizations that provide services and work for people with disabilities, believes the minimum wage measures are misguided. Kate McSweeny, vice president of government affairs and general counsel for the group, noted that none of the bills underwrite the difference in wages and predicted that people would be thrown out of work.
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“It takes away opportunities and does not add anything,” she said. “It will be devastating to the people who are affected.”
Goodwill Industries International said any phase-out “should result in more people obtaining competitive integrated employment and staying in the workforce.” Thirty-five of its independent organizations pay certain workers under the minimum wage.
Meanwhile, states have been forging ahead. Former New Hampshire Gov. Maggie Hassan, a Democrat who is now in the Senate, was the first to do away with the subminimum wage in 2015. Alaska eliminated its allowance last year, and it’s set to go away next year in Maryland. Oregon is the next state taking a look, having passed a bill out of the state Senate in April to phase out the subminimum wage by 2023.
Advocates consider low employment rates among people with disabilities to be an unfulfilled promise of the Americans with Disabilities Act that was signed into law by President George H.W. Bush in 1990. The bill prohibits discrimination based on disability and requires certain employers to make accommodations so that people are able to do their jobs even if they are using a wheelchair, are blind, or need to take breaks more often than other workers.
“There has been plenty of information and data to support that people with disabilities are good workers, that it’s not a charity hire but good for business,” said Nicole Jorwic, director of rights policy at the Arc, which advocates for the rights of people with intellectual and developmental disabilities.
Roughly 30% of working-age people with a disability have a job, compared with 75% of people who do not have a disability. An estimated 195,000 people are paid under the minimum wage, and 2,000 employers use the subminimum wage waiver called Section 14(c) that they obtain through the Department of Labor.
Through the waiver, they are allowed to compensate workers based on their productivity level. For example, if a worker without a disability is paid minimum wage to hang up 100 articles of clothing an hour, then someone with a disability who hangs up 50 articles of clothing an hour would be paid half the minimum wage.
Many disability rights advocates view undoing the subminimum wage and increasing the minimum wage as just one step toward a larger goal to help include more people with disabilities in the workplace.
Rebecca Cokley, director of the Disability Justice Initiative at the liberal Center for American Progress, said that “it’s not just about hiring, it’s about what you would expect for any employer: Are people with disabilities being provided with the same opportunities for advancement, and are they being promoted and retained?”
