Biden Administration Moves to End a Minimum Wage Waiver for Disabled Workers

The Biden administration on Tuesday moved to end a program that has for decades allowed companies to pay workers with disabilities less than the minimum wage.

The statute, enacted as part of the Fair Labor Standards Act of 1938, has let employers obtain certificates from the Labor Department that authorize them to pay workers with disabilities less than the federal minimum wage, currently $7.25 an hour. The department began a “comprehensive review” of the program last year, and on Tuesday it proposed a rule that would bar new certificates and phase out current ones over three years.

“This proposal would help ensure that workers with disabilities have access to equal employment opportunities, while reinforcing our fundamental belief that all workers deserve fair compensation for their contribution,” Taryn Williams, assistant secretary of labor for disability employment policy, said on a call with reporters.

As of May, about 800 employers held certificates allowing them to pay workers less than minimum wage, affecting roughly 40,000 workers, said Kristin Garcia, deputy administrator of the Labor Department’s wage and hour division.

Those figures reflect a steep decline in employers’ reliance on the program in recent years: The number of workers with disabilities earning less than the minimum wage dropped to 122,000 in 2019 from 296,000 in 2010, according to a report published last year from the Government Accountability Office.

Since 2019, more than half of workers employed under this program earned less than $3.50 an hour, according to the report.