RCPA - Rehabilitation and Community Providers Association


Law Impacts Sheltered Workshop Eligibility and Wages
July 22, 2014

The transition from school to work for students with disabilities will undergo sweeping changes under a bill President Barack Obama signed into law July 22. The measure, known as the Workforce Innovation and Opportunity Act, significantly limits placements at sheltered workshops and other work environments where people with disabilities earn less than minimum wage. Individuals age 24 and younger with disabilities will no longer be allowed to work for less than the federal minimum wage of $7.25 per hour unless they first receive pre-employment transition services at school and try vocational rehabilitation services. The measure also mandates that state vocational rehabilitation agencies work with schools to provide transition services to all students with disabilities and requires that agencies allocate at least 15 percent of their federal funding toward such transition efforts.

The updated rules specific to what’s known as subminimum wage will take effect two years after the law’s enactment. Though requiring that most young people try competitive employment before working for less than minimum wage, there are exceptions for those who are deemed ineligible for vocational rehabilitation and would allow individuals already earning less than the federal minimum to continue in their jobs. In cases where individuals with disabilities do earn less than minimum wage, the measure requires that they periodically be provided career counseling by the state and are informed about other work opportunities. The new law also shifts responsibility for some disability and independent living program functions from the US Department of Education to the US Department of Health and Human Services.

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