Disabled Workers Can Be Paid Less Than $7.25 an Hour. It’s Time to Change That.

by | Aug 7, 2023 | Fair Pay

The federal minimum wage – $7.25 an hour – isn’t much. And, contrary to what its name might suggest, it isn’t even the minimum. In 37 states, employers can legally pay certain employees less than the statutory floor, making even $7.25 an hour – already far below the living wage – unattainable for millions of working Americans.

This practice is permitted under the Fair Labor Standards Act (FLSA) of 1938. Though celebrated for establishing core labor protections that many (but not all) workers enjoy today, such as the right to overtime pay and prohibitions on oppressive child labor, the FLSA is also responsible for codifying wage discrimination against disabled workers into federal law. Under Section 14(c), businesses that receive a certificate from the U.S. Department of Labor’s (DOL) Wage and Hour Division are authorized to pay disabled workers whose “earning or productive capacity is impaired” less than the minimum wage – a subminimum wage. These rates are determined by individual disabled workers’ output, relative to their nondisabled counterparts. For example, if a nondisabled worker produces 10 shoes an hour for $7.25, a disabled worker who produces five shoes an hour receives $3.63, despite performing the same task for the same amount of time.

Currently, about 120,000 disabled workers are employed under 14(c) certificates. Half of them are paid less than $3.50 an hour, with some individuals reporting wages as little as four to ten cents an hour. It should go without saying, but there is no state across the country in which these wages can reasonably afford housing, food, and transportation, much less the added expenses of living with a disability (such as direct costs like building a wheelchair ramp or indirect costs like foregone earnings due to reduced work hours). For some disabled workers, a day’s earnings can barely cover the cost of a single candy bar!

Though long overdue, efforts to terminate the exploitative 14(c) program have been renewed in recent years. And this summer, leaders in Congress have the opportunity to eliminate the subminimum wage for workers with disabilities nationwide. (It’s already been banned in thirteen states, and is on the way out in four others.) On July 25th, 2023, Rep. Robert C. “Bobby” Scott (D-Va.) and Sen. Bernie Sanders (I-Vt.) introduced the Raise the Wage Act (RTWA) of 2023 in the U.S. House of Representatives and U.S. Senate. If passed, this bill would not only raise the federal minimum wage to $17 over the course of five years – it would also gradually eliminate the subminimum wage for disabled workers by 2028. And while other bills, like the Transformation to Competitive Integrated Employment Act (TCIEA), focus solely on ending the subminimum wage for disabled workers, the RTWA would abolish the subminimum wage for youth employees and tipped employees (many of whom are disabled) by 2030 as well.

The RTWA of 2023 will benefit an estimated 27,858,000 workers, but its effects will be felt most deeply by our nation’s disabled population – particularly disabled women and disabled women of color. Data from the American Community Survey finds that 25.9 percent of people with disabilities live in poverty – twice the rate of people without disabilities. And we have found that employed disabled women (especially women of color) are significantly poorer than employed disabled men and employed nondisabled women and men, in part because they are less likely to work full-time, more likely to work low-wage and tipped-wage jobs, and less likely to engage in competitive integrated employment (CIE). Widely regarded as pathways out of poverty, CIE workplaces compensate disabled workers at or above the minimum wage and provide them the same benefits and advancement opportunities given to their nondisabled counterparts. Disabled women’s low participation in CIE means that they are oftentimes forced to work in sheltered workshops – segregated settings characterized by repetitive work and subminimum wages. Accounting for these gendered barriers to financial stability makes RTWA’s passage all the more imperative. The TCIEA alone would help disabled workers significantly, by phasing out the subminimum wage, but the RTWA of 2023 would go much further toward ensuring economic security for disabled women in low-wage and tipped jobs as well as those paid subminimum wages.

Ultimately, as Sen. Sanders put it, “a job should lift you out of poverty, not keep you in it.” For far too long (eighty-five years, to be precise), harmful devaluations of disabled work have created an underclass of laborers, compensated wages insufficient for survival, let alone a fulfilling life. Passing the RTWA of 2023 will shrink long-standing disability- and gender-based inequities and secure fair compensation – above and beyond our current floor of $7.25 – for disabled workers and tipped workers. The time is now to eliminate the subminimum wage and pass the RTWA of 2023 in its entirety.

Special thanks to Marissa Ditkowsky, Jessica Mason and Elisa Davila for their thoughtful comments and research contributions. To learn more about the systemic barriers that disabled women face in obtaining and maintaining employment, check out our new report, “Systems Transformation Guide to Economic Justice for Disabled People: Jobs and Employment.”