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The Systematic Reduction of Minimum Wage for Workers with Disabilities

Minimum wage in the United States remains at $7.25 per hour, although many states have taken steps to increase their minimum wage rates to $10.00 per hour. Despite these minimum requirements, however, you may be surprised to learn that workers with disabilities may not be protected by those legal minimums. Instead, the Fair Labors Standards Act (FLSA) and the subsequent revisions of its rules have systematically reduced the minimum wage rate that can be applied to workers with disabilities.

The Original Provisions of the FLSA

When the FLSA was first enacted in 1938, it included provisions that allow employers to pay workers with disabilities lower wages than others. This provision is not automatic or mandatory, but instead, employers must apply for a waiver from the Department of Labor. The basis for the request must be that the worker has physical or mental disabilities that impair their earning capacity or their productivity. When these provisions were first established, employees with disabilities could potentially receive only 75% of the federal minimum wage amount.

Continued Reduction of Minimum Wages for Individuals with Disabilities

In 1966, the possible minimum wage limit for individuals with disabilities was reduced from 75% to 50%. Then again, in 1986, the minimum wage for individuals with disabilities was eliminated completely. At that point, employers were allowed to pay disabled workers as little as they wanted, as long as their requests for waivers were approved. In some cases, this resulted in disabled employees being paid only a few cents per hour. Justification for the Discrepancies in Wages for the Disabled The Department of Labor, which is responsible for creating and enforcing these provisions, has offered a few reasons for these discrepancies. First, the Department argues that the allowance of a subminimum wage for workers with disabilities is the very reason that such individuals are able to get hired at all. In other words, because employers are able to save money through the waivers, they are more willing to hire individuals with disabilities to work for them. In 2017, the U.S. Bureau of Labor Statistics reported that only 18.7% of individuals with disabilities were in the workforce. Statistically speaking, unemployment rates within the disabled community are typically higher than for those without a disability. This is true regardless of age or education.

“Sheltered Workplaces” Often Benefit Most by these Provisions

In many cases, individuals with disabilities are hired by businesses that are known as “sheltered workplaces.” These are facilities that provide supervision and employment opportunities for people with disabilities in order to protect them, teach them skills they will need to work in the mainstream labor market and prepare them for the real workforce. The reality is most often that these disabled individuals remain at the sheltered workplaces long-term which means they are always earning subminimum wages.

A Shift Away from Subminimum Wages for the Disabled

In the recent years, there has been a hopeful shift away from this long history of subminimum wages for disabled workers. In 2010, for example, the $10.10 minimum wage for workers on government contracts was enacted, including workers with disabilities. In 2016, through bipartisan efforts, the elimination of the subminimum wage was included as a legislative goal for the first time. On the state level, New Hampshire banned employers from paying subminimum wages to individuals with disabilities in 2015. Alaska joined New Hampshire in 2018.

If you feel you have been the victim of discrimination or retaliation in the workplace, or if you have any other questions regarding your employment rights, please contact the experienced employment law attorneys at Wrady & Michel, LLC. You can contact us either online or by calling us at (205) 265-1880. We are here to serve you!