DOL releases final subminimum wage rules

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The Department of Labor has released new regulations, clarifying the obligations of government agencies and businesses with 14(c) certificates to workers with disabilities being paid subminimum wages.

Section 14(c) refers to the provision of the New Deal-era Fair Labor Standards Act that authorizes such arrangements. Under the program, agencies and workshops can legally employ certain workers viewed as otherwise unemployable due to their disabilities at wages below the $7.25 federal minimum wage, provided that they pay employees wages “commensurate” with other workers in their regular marketplace, among other requirements.

Disability rights groups have long criticized the arrangements, known as “sheltered workshops,” as exploitative and an impediment to helping individuals transition into competitive employment.

In response, Congress changed the program in July 2014 with the passage of an updated version of the Workforce Innovation and Opportunity Act, the nation’s primary law governing federal workforce training programs.

The DOL’s final rules implementing the bill, initially proposed in April 2015, make two major changes to the program.

First, 14(c) certificate holders may no longer employ people under age 24, regardless of the extent of their disabilities, without first providing services to help them find work in the marketplace.

Specifically, they must provide transition services, similar to what schools provide to special education students before transitioning out of high school, or “pre-employment transition services” as defined under the WIOA, according to the DOL bulletin, dated July 27. Further, they must ensure the individuals have been provided access to vocational rehabilitation services and career counseling.

Second, 14(c) certificate holders must provide ongoing career information and training opportunities to their employees. Employers must provide such services every six months for the employee’s first year of employment, and annually thereafter.

The new rules went into effect July 22.

Visit the Department of Labor’s website for more information on the DOL’s enforcement of the 14(c) program.

Rooted in Rights recently released a trailer of an original documentary, Bottom Dollars, about 14(c) certificates and the effects of subminimum wages on workers with disabilities. Watch the trailer and learn about how you can host a viewing of the whole documentary.

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