People with disabilities make less than minimum wage. The Biden administration wants to change it.
WASHINGTON – The Biden administration on Tuesday proposed abolishing a sub-minimum wage for people with disabilities, a long-sought move by the disability community that will require the support of President-elect Donald Trump.
The change could dramatically increase pay rates among about 38,000 workers with disabilities nationwide. But critics warn it also potentially lead to fewer jobs.
“One of the guiding principles of the American workplace is that a hard day’s work deserves a fair day’s pay, and this proposal ensures that principle includes workers with disabilities,” the Labor Department's Wage and Hour Administrator Jessica Looman said in a statement.
The process for adopting the rule to abolish lower pay rates could take months or years, during which time the Trump administration could abandon it. Initial comments are due by Jan. 17.
The Biden administration proposes to phase out exceptions over three years to the federal minimum wage, which is $7.25 per hour.
The Labor Department found in July about 700 employers held certificates to pay about 38,000 workers less than the minimum wage.
The certificates to pay workers less are typically for "sheltered workshops" operated by nonprofits for people with mental or physical disabilities.
About half the workers paid under the certificates earned $3.50 per hour or less, according the Labor proposal. Nearly 5% of these workers were paid 25 cents per hour or less.
“Special minimum wages expand employment opportunities for individuals with disabilities to work and broaden options to transition to other types of employment,” eight Republican members of Congress including House Committee on Education and the Workforce Chair Virginia Foxx, R-N.C., and Rep. Elise Stefanik, R-N.Y., whom President-elect Donald Trump has picked to serve as ambassador to the United Nations, wrote in a letter opposing the potential rule change last year.
The department's proposal observed that opportunities for individuals with disabilities have dramatically expanded since the 1990 passage of the Americans with Disabilities Act.
"Numerous States and localities have prohibited or limited the payment of subminimum wages to workers with disabilities within their jurisdictions," it notes.
The Congressional Budget Office reviewed legislation in 2023 to increase wages and found that proposals to raise the subminimum wage "would boost the earnings of most of those workers through higher wages but also reduce the earnings of some through higher rates of joblessness."
But the Labor Department said in 2023 people with disabilities were employed at the highest rate ever of 22.5%.