Biden administration moves to end subminimum wages for disabled workers

A decades-long fight over whether people with disabilities should be paid less than minimum wage is set to come to a head this month.

For almost 90 years, disability activists have pushed to end a federal law that allows employers to obtain a certificate that enables them to pay disabled workers less than the minimum wage. Some workers in the program make as little as 25 cents an hour.

The law’s opponents say it’s a Depression-era relic that devalues the work of people with disabilities and limits the types of work they can do. They’ve faced fierce pushback from a small cohort of well-organized defenders of the law, including some parents of disabled workers, who argue that the program is some people’s only opportunity to do meaningful work and earn a wage.

Congressional action to end the program has languished, and President Joe Biden, who promised during his 2020 campaign to phase it out, declined to take action for most of his presidency. That is set to change soon: Biden’s Labor Department has submitted a rule for review by the White House Office of Management and Budget that could fulfill his promise - and set off a massive legal and political battle, The Post has learned.

The specifics of the rule are not yet public, but it is likely to tighten reporting and enforcement requirements to ensure higher levels of compliance with the law - and could phase out the program altogether, according to people familiar with the rulemaking process.

But before the proposal can become final it must survive review by the Office of Management and Budget, a protracted public comment period and potential legal challenges. And a central unanswered question is just how much power Julie Su, the acting Labor secretary, has to change or eliminate the program, and whether Congress or the courts will stop her.

Congressional opponents of the subminimum wage program have held out hope that they may be able to pass a bill to phase out the program before the end of the year. But it’s unclear whether there’s enough time for anything to pass through a closely divided GOP-led House - and a bottleneck of Republican lawmakers who support the existing law.

Officially called Section 14(c), the law was enacted by Congress as part of the 1938 Fair Labor Standards Act. Under the law, certified employers pay workers based on a per-item rate or calculations of their productivity relative to workers without disabilities. Many of these employers operate facilities, known as sheltered workshops, in which disabled workers are separated from non-disabled workers.

Sens. Bob Casey (D-Pa.) and Steve Daines (R-Mont.) and Reps. Robert C. “Bobby” Scott (D-Va.) and Cathy McMorris Rodgers (R-Wash.) have advocated passage of the 2023 Transformation to Competitive Integrated Employment Act, which would phase out the use of subminimum wages over a five-year period and allocate $300 million for grants to states and individual certificate holders to transition workers into community jobs - or help keep employers open by employing people with disabilities at minimum wage.

There is hope that at least parts of the bill could be included in the reauthorization of the Workforce Innovation and Opportunity Act, a 2014 law that dictates how the U.S. trains workers and aims to boost employment and earnings. Negotiations over the final text of the package are ongoing and markup of the package is expected to happen this month.