Less Than the Minimum

Minimum wage is the minimum, except when it isn't.

Minimum wage is supposed to be, by definition, the least that someone can be paid for their labor. However, in the U.S. it is actually legal for businesses to pay certain employees less than the Federal minimum wage for the work they do, if the employee is a person with a disability.

Since the passage of the Fair Labor and Standards Act (FLSA) in 1938, which originally created minimum wage, people with disabilities have been exempted under section 14 c. The law allows employers to obtain waivers from the Department of Labor Wage and Hour Division (WHD), to pay workers with disabilities sub-minimum wages.

Employers are legally supposed to pay these employees a commensurate wage based on their productivity compared to a non-disabled employee doing roughly the same job in roughly the same place. However, it’s the employers who are the ones determining the level of productivity, so it seems like there is strong financial incentive to underestimate and/or understate an employee’s productivity. That’s one big problem with this system.

The other big problem is that there doesn’t appear to be any actual data suggesting that a person with a disability is de facto less productive than a person who doesn’t have a disability. Making laws based on assumptions about entire classes of people is not a fair or reasonable mode of governing. It’s also not logical. Anyone who has worked with other people can attest to the fact that there are a lot of components to productivity that have nothing to do with a person’s innate abilities. Work ethic, motivation, attitude, and enjoyment of the work are all factors that this law completely disregards.

The recent push by various groups to raise the minimum wage to $15, or some other amount, has largely ignored the hundreds of thousands of American workers earning sub-minimum wages. But there has still been some momentum building to make changes, especially in the last few years. In 2003 Vermont became the first state to not allow sub-minimum wages for disabled workers. New Hampshire passed legislation to end 14 c exemptions for most businesses in the state in 2015, though for some reason family owned businesses are still allowed to pay less. Maryland passed a law in 2017 that will end exemptions there in 2020. Early this year Alaska passed a law, which went into effect in February ending the practice there. Yesterday Seattle’s City Council officially changed the language of their labor code so that the Seattle Office of Labor Standards could no longer issue 14 c certificates. And Hawaii’s State Legislature is currently considering a law that would include persons with disabilities under the state’s minimum wage requirements.

On the national level there has been less progress. When the Americans with Disabilities Act (ADA) was passed in 1990 no changes were made to section 14 c of FLSA. In 2012 the National Council on Disability, which is the same organization that authored the ADA, sent a letter to President Obama stating, “the 14(c) program should be phased- out gradually”. Obama issued an executive order in 2014 raising the minimum wage to $10.10 for all workers employed or contracted by the Federal Government, including those with disabilities. But there have been no significant changes to the 14 c waiver program for private sector employers since it was created eighty years ago, and the current administration seems unlikely update or end these exemptions.

Part of the challenge to getting legislation passed that requires equal wages for everyone is that there can be negative unintended consequences to changing the status quo. Though Maine did not make the 14 c exemptions illegal, in 2008 the state started closing disability workshops, centers that employ large numbers of workers with intellectual disabilities at sub-minimum wages. According to a study done in 2015 by George Washington University two thirds of Maine workers who became unemployed when the workshops closed were not able to find new work later, and enrollment in adult daycare in the state more than quadrupled after the closures.

Whether this was because these workers were genuinely not competitive as regular wage workers, or simply because employers perceived them not be good candidates for other types of jobs, the results were the same. This fear that eliminating the 14 c waivers will ultimately hurt the job prospects of works with disabilities is why some advocacy groups for disabled people support the program, and why many states have failed to pass laws. It’s difficult to easily see a system that encourages businesses to employ people regardless of their disabled status, but also mandates equal and fair wages for everyone. However, difficulty is not an excuse for inaction, or for inequality.

Comments
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A_Chapman
A_Chapman

Editor

Thanks for sharing this @wonderwall15, it's interesting to see which countries do and don't have sub-minimum wages. I wonder if comparative analysis has been done to see if paying people with disabilities less than the minimum wage improves the number of employment opportunities they have, or if there are other programs that increase employment without having different wages?

wonderwall15
wonderwall15

It's a global phenomenon. Hopefully though we get better deals for ALL

A_Chapman
A_Chapman

Editor

You're right @FelixCulpa, the issue of disability benefits is another complicating factor, on top of so many other complicating factors that make it so hard to know what's the best way to move forward. And I agree that it really should be possible to find positions for people who can work and who want to work.

FelixCulpa
FelixCulpa

At the very least it's a motivation for states to find "make work" positions for disabled individuals who want, and are able, to be productive. If it's anywhere from a slight loss to any kind of profit it's still a gain over paying people to look after individuals who'd rather be working. On the other hand, there would be the question of fairness if folks who were receiving benefits due to disability were able to keep those benefits despite being paid the same wage as their coworkers. I mean if someone objectively does less work for the same money, and also receive benefits on top of that, you're sure to hear yowls of protest from many quarters. Additionally the obvious net loss of hiring partially productive workers at full pay might (as you suggest in the case of Maine) lead to increased firings and failures to hire.

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