Rules Proposed to End Sub-Minimum Wage for Workers with Disabilities

The U.S. Department of Labor (DOL) announced proposed rules that would phase out certificates allowing employers to pay workers with disabilities less than the federal minimum wage.

Beginning in 1938, section 14(c) of the Fair Labor Standards Act (FLSA) has allowed the DOL to issue certificates permitting employers to pay workers with disabilities productivity-based subminimum wages to prevent the curtailment of opportunities for employment.

The proposed rule will cease issuance of the certificates to employers who submit an initial application on or after the effective date of a final rule and allow existing certificate holders to continue to operate under certificate authority for up to three years following the final rule effective date. At the end of the three-year period, all workers with disabilities must be paid at least the federal minimum wage, currently $7.25 per hour.

Employment opportunities for individuals with disabilities have advanced significantly since 1938 — federal legislation and court actions have established legal protections requiring equal access, opportunities, and respect for individuals with disabilities. As a result, the DOL concludes that the subminimum wage rate is no longer necessary to provide opportunities for individuals with disabilities.

The number of workers who are paid subminimum wages has declined over the years. An estimated 424,000 workers were paid subminimum wages in 2001. As of December 1, 2024, this number dropped to 36,922 – approximately a 90 percent decline.

The proposed rules, published in the Federal Register on December 4, 2024, are open for comment until January 17, 2025. Frequently Asked Questions regarding the proposed rules, including instructions for submitting comments, are available on the DOL website.