Biden looks to abolish law allowing low pay for disabled people

The Biden administration’s Department of Labor is moving to phase out a controversial program that allows some employers to pay disabled employees less than the federal minimum wage, the department announced Tuesday.

Enacted in 1938 during the late years of the Great Depression, the measure was intended to increase employment opportunities for workers with disabilities but has been denounced by advocates who say it amounts to legalized discrimination. The measure is part of the Fair Labor Standards Act and based on the premise that disabled employers are less productive.

The Department of Labor’s proposed rule would phase out sub-minimum wages by ending the issuance of certificates that permit the lower wages and establishing a three-year period for employers to stop using existing certificates.

“One of the guiding principles of the American workplace is that a hard day’s work deserves a fair day’s pay,” said Wage and Hour Administrator Jessica Looman in a statement. “Opportunities and training have dramatically expanded to help people with disabilities obtain and maintain employment at or above the full federal minimum wage.”

Around 40,000 American workers with disabilities currently receive less than the federally mandated minimum wage of $7.25 an hour. Some are employed through nonprofit organizations that aim to provide opportunities for people with autism, cerebral palsy or other disabilities.

According to documents obtained by Bloomberg, some employers have paid workers as little as 25 cents an hour to sort clothes and 5 cents an hour to cut rags. The first certificates permitting sub-minimum wages were issued half a century before the Americans with Disabilities Act was passed in 1990.

The Department of Labor expects workers currently being paid a sub-minimum wage to move into full wage positions rather than face unemployment, said Acting Secretary Julie Su in a statement.

The elimination of the low wages will “strengthen inclusion for people with disabilities in the workforce” and “improve their economic wellbeing,” Su said.

The decision to phase out the Great Depression era program is based largely on evidence that legal and policy changes in recent years have lowered barriers to employment for disabled people. The permission to pay low wages is no longer needed to incentivize employers to hire a disabled person, according to the Department of Labor’s proposed rule.

“Employment opportunities for individuals with disabilities have vastly expanded in recent decades,” the rule says. “The Department has tentatively concluded that subminimum wages are no longer necessary to prevent the curtailment of employment opportunities.”

The fate of the program will rest with President-elect Donald Trump, who takes office next month. During Trump’s first term in office, his administration worked to roll back existing labor mandates and expand businesses’ discretion over a range of issues.

Some Republican lawmakers have raised alarm over the potential elimination of a sub-minimum wage, writing in a letter to Su last December that the lower wages allow individuals with disabilities to work and transition into higher paying jobs. Rep. Virginia Foxx of North Carolina and Trump ally Elise Stefanik of New York were among the eight signees.

The letter, along with some parents of disabled adults, voiced support for so-called sheltered workshops that employ disabled workers and pay them less than $7.25

“For many Americans with disabilities, these centers provide a unique sense of purpose and community,” the letter said.