12-12-2024
Since 1938, employers may pursue certificates from the Department of Labor that authorize them to pay disabled workers less than the federal minimum wage—currently $7.25 per hour. President Joe Biden promised to increase these wages in his 2020 presidential election campaign. The program is part of the Fair Labor Standards Act and was initially enacted to provide jobs for injured veterans. A Washington Post investigation revealed many of the program’s workers end up in these low-wage jobs for years, and “[a]bout 1 in 3 certified workers have failed to pay wages correctly.”
The Biden Administration proposes to bar the DOL from issuing new certificates and plans to phase out the current ones over the next three years. As of May 2024, about 800 employers have these certificates, and the changes will impact about 40,000 workers. Over half of the program’s disabled employees earn less than $3.50 an hour. Disability advocates have fought for a long time to make these changes. They argue that it entrenches economic inequality for disabled workers and ensures they need other financial support, including government assistance, to survive. The lower pay also sends the message that disabled workers have less value to employers than other employees. A DOL spokesperson asserted that disabled workers now have expanded opportunities for work receiving full benefits; thus, the department does not believe the certificates are still necessary.
The new rule faces many hurdles, not the least of which is that a new administration will likely disapprove of the changes. Because the certificates are part of the FLSA, enacted by Congress, it is unclear whether changes can be made via executive action. Moreover, it is likely that employers will fight against these changes. Some parents of these disabled workers expressed concern that these workers will have fewer opportunities and will lose Social Security benefits.