Labor Department Proposes to Phase Out Lower Wages to Workers with Disabilities

The U.S. Department of Labor (DOL) proposed a rule that would phase out the issuance of certificates allowing employers to pay some workers with disabilities less than the federal minimum wage, currently $7.25 per hour.

The rule proposes to eliminate certificates employers can apply for under the Fair Labor Standards Act that allow them to pay certain workers with disabilities subminimum wages. The department proposes to discontinue the issuance of new certificates and establish a three-year phase-out period for employers with existing certificates once a final rule becomes effective.

“This proposal demonstrates the Biden-Harris administration’s dedication to good jobs for workers with disabilities,” said Julie Su, DOL acting secretary. “In the decades since Section 14(c) was included in the Fair Labor Standards Act, there have been significant legal and policy developments that have dramatically expanded employment opportunities and rights for individuals with disabilities. With this proposal, the department expects that many workers currently paid subminimum wages under Section 14(c) will move into jobs that pay full wages, which will improve their economic wellbeing and strengthen inclusion for people with disabilities in the workforce.”

The proposed rule would do the following:

• Cease the department’s issuance of new Section 14(c) certificates starting on the effective date of a final rule.
• Institute a three-year period beginning on the effective date of a final rule for employers holding existing Section 14(c) certificates to cease paying subminimum wages to workers with disabilities.

“One of the guiding principles of the American workplace is that a hard day’s work deserves a fair day’s pay, and this proposal ensures that principle includes workers with disabilities,” said Jessica Looman, Wage and Hour Division administrator. “Since the enactment of the Fair Labor Standards Act in 1938, opportunities and training have dramatically expanded to help people with disabilities obtain and maintain employment at or above the full federal minimum wage. Similarly, employers today have more resources and training available to recruit, hire, and retain workers with disabilities in employment at or above the full minimum wage, and this proposed rule aligns with that reality.”

The DOL encourages interested parties to submit comments on the proposal once it is published in the Federal Register. All comments must be received by 11:59 p.m. EST on Jan. 17, 2025, for consideration in this rulemaking. Comments received after the comment period closes will not be considered. Learn more about the proposed rule and instructions for submitting comments.