Biden Seeks to End Subminimum Wage for Workers With Disabilities

By Josh Eidelson
Bloomberg News
(TNS)

President Joe Biden’s Department of Labor is proposing to abolish below-minimum-wage pay for people with disabilities, targeting a long-controversial program whose fate will now rest with the incoming Trump administration.

Since the New Deal, federal law has authorized the department to permit paying particular employees a lower “special minimum wage” on the grounds that their disabilities impair their productivity. That law, passed half a century before the Americans With Disabilities Act, was meant to shield people with disabilities from being deemed too expensive to employ. But it’s been denounced by advocates as a form of legalized discrimination that rips off and marginalizes those it purports to protect.

In a proposed rule being announced Tuesday, the Biden administration says the Labor Department should phase out the exemption over three years, first ceasing to issue new certificates allowing employers to pay less than the normal $7.25 hourly wage floor, and then requiring those already providing subminimum compensation to end that practice.

Around 40,000 American workers are currently covered by certificates allowing their bosses to pay a subminimum wage. Many are employed in so-called “sheltered workshops,” non-profit organizations with missions to provide opportunities for people with conditions such as blindness, autism, or cerebral palsy. Some of those non-profits contract with companies to provide services like shredding documents, cleaning floors, or assembling products. In recent years some employers have reported paying workers as little as 25 cents per hour to sort clothes and 5 cents per hour to cut rags, according to documents Bloomberg News obtained via public records requests.

“We don’t have to create exceptions to our minimum wage rules in order for all people, including people with disabilities, to get good jobs,” Acting Secretary of Labor Julie Su said in an interview. “When you care about equity, when you say ‘we’re going to leave no one behind,’ and you intentionally work toward that, we can make a difference.” The new proposal, Su added, reflects the growing recognition that employees with disabilities can thrive in integrated workplaces, and the Biden administration’s view that “everybody deserves a fair shot.”

What happens next to the proposed regulation will depend on Donald Trump, who takes office next month. In the first Trump term, his appointees at federal labor agencies pushed regulatory changes expanding businesses’ discretion on a range of issues, and tried to roll back mandates from the Obama administration. While a handful of Republicans have pushed for legislation that would also phase out the subminimum wage, others have voiced alarm over potential changes to the program, as have some parents of adults with disabilities.

“Special minimum wages expand employment opportunities for individuals with disabilities to work and broaden options to transition to other types of employment,” eight members of Congress including Representative Virginia Foxx of North Carolina, chair of the House Committee on Education and the Workforce, warned in a letter to Su last December. The Republican lawmakers, who also included Trump ally Elise Stefanik of New York, wrote that “misguided activists” were wrongly attacking sheltered workshops that “provide a unique sense of purpose and community,” and that changes could cut workers off from opportunities and support services by forcing those facilities to close.

Kristin Garcia, the Labor Department’s deputy wage and hour administrator, said the proposal wouldn’t require organizations to stop employing or providing services to people, and would give employers, workers, and the government substantial time to adjust. “A hard day’s work deserves a fair day’s pay, and that is true for all workers,” Garcia said in an interview. “But for too long workers with disabilities have really been left out.”If the proposed rule were finalized, it would be likely to draw legal challenges, like other major regulatory initiatives.

Along with the proposal to end the subminimum wage, Trump’s victory last month casts in doubt an effort by the U.S. National Labor Relations Board’s top prosecutor to undo a precedent preventing some workers with disabilities from unionizing. The NLRB general counsel, Jennifer Abruzzo, has been trying to get the agency to overturn a 2004 case in which labor board members ruled that some workers lacked collective bargaining rights because their relationship with the non-profit that employed them was “primarily rehabilitative.” Under that precedent, “You’re basically creating an inferior subclass of workers,” Abruzzo, who Trump could fire on his first day in office, said in a September interview. “The Americans with Disabilities Act was enacted for a reason.”

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