Subminimum Wages: Impacts on the Civil Rights of People with Disabilities

The United States Commission on Civil Rights (“the Commission”) has released their briefing report, Subminimum Wages: Impacts on the Civil Rights of People with Disabilities. The primary recommendation approved by the Commission majority following this inquiry was that Congress should repeal Section 14(c) with a planned phase-out period to allow transition among service providers and people with disabilities to alternative service models prioritizing competitive integrated employment.

The Commission majority approved key findings including the following: As currently utilized, the U.S. Department of Labor has repeatedly found 14(c) providers limiting people with disabilities participating in the program from realizing their full potential while allowing providers and associated businesses to profit from their labor. This limitation is contrary to 14(c)’s purpose. Persistent failures in regulation and oversight of the 14(c) program by government agencies including the Department of Labor and Department of Justice have allowed and continue to allow the program to operate without satisfying its legislative goal to meet the needs of people with disabilities to receive supports necessary to become ready for employment in the competitive economy.

Findings and Recommendations:

1. In 1938, Congress enacted the exception to the minimum wage requirement for people with disabilities, contained in Section 14(c) of the Fair Labor Standards Act, with a rehabilitative purpose. As currently utilized, the federal Department of Labor has repeatedly found providers operating pursuant to Section 14(c) limiting people with disabilities participating in the program from realizing their full potential while allowing providers and associated businesses to profit from their labor. This limitation is contrary to 14(c)’s purpose.

2. Persistent failures in regulation and oversight of the 14(c) program by government agencies including the Department of Labor and Department of Justice have allowed and continue to allow the program to operate without satisfying its legislative goal to meet the needs of people with disabilities to receive supports necessary to become ready for employment in the competitive economy.

3. People with intellectual and developmental disabilities who are currently earning subminimum wages under the 14(c) program are not categorically different in level of disability from people with intellectual and developmental disabilities currently working in competitive integrated employment.

4. The Commission took in bipartisan testimony in favor of keeping the 14(c) program and to end the 14(c) program. Notably, in 2016, both major party platforms included support for legislation ending the payment of subminimum wages to people with disabilities. House Committee on Education and the Workforce Chairman Bobby Scott (D-VA) introduced bipartisan legislation to phase out the 14(c) program. Chair Neil Romano, Republican appointee to the National Council on Disability, and former RepublicanGovernor Tom Ridge, who now leads the National Organization on Disability, both testified that ending the 14(c) program is their shared highest priority.

5. State-level phase outs of the use of the 14(c) program have been developed and designed for state service providers and other stakeholders to ensure that a competitive integrated employment model does not result in a loss of critical services to individuals with disabilities including former 14(c) program participants.

6. Increased integration of people with disabilities into the workplace and society is now legally required by the Americans with Disabilities Act and legal precedent and is facilitated by technological advancements. These developments obviate any need for subminimum wage work.

Highlighted Recommendations:

1. Congress should repeal Section 14(c) with a planned phase-out period to allow transition among service providers and people with disabilities to alternative service models prioritizing competitive integrated employment.

2. The phased repeal of 14(c) must not reflect a retreat in Federal investments and support for employment success of persons with disabilities but rather a reconceptualization of the way in which the federal government can enhance the possibilities for success and growth for people with disabilities.

3. Congress should expand funding for supported employment services and prioritize capacity building in states transitioning from 14(c) programs.

4. Now and during the transition period of the Section 14(c) program, Congress should assign civil rights oversight responsibility and jurisdiction, with necessary associated fiscal appropriations to conduct the enforcement, either to the Department of Labor or to the Department of Justice Civil Rights Division. Congress should also require that the designated civil rights agency issue an annual report on investigations and findings regarding the 14(c) program.

5. During the phase-out period, Congress should require more stringent reporting and accountability for 14(c) certificate holders and following the phase out should continue to collect data on employment outcomes of former 14(c) employees.

6. The Department of Justice should increase enforcement of the Olmstead integration mandate to determine whether more state systems are inappropriately relying too heavily on providers using 14(c) certificates to provide non-integrated employment in violation of Olmstead. The Department should issue guidance, open more investigations, and litigate where voluntary compliance cannot be achieved.