The Biden administration is proposing to eliminate the decades-old practice of paying disabled workers below the federal minimum wage, a move that will now face a crucial test under the incoming Trump administration, Bloomberg reports.
The Department of Labor announced a proposed rule Tuesday that would phase out the “special minimum wage” exemption over three years. This exemption, authorized under federal law since the New Deal era, allows employers to pay certain disabled employees less than the current $7.25 hourly minimum wage, ostensibly to make them more employable.
However, the practice has faced intense criticism from disability rights advocates who argue it constitutes legalized discrimination, exploiting vulnerable workers. The proposed rule aims to address these concerns by first halting the issuance of new certificates authorizing subminimum wages and then requiring existing employers to cease the practice within a three-year timeframe.
Some 40,000 workers currently benefit from this exemption, many employed by sheltered workshops – non-profit organizations providing work opportunities for individuals with disabilities. Documents obtained by Bloomberg News through public records requests reveal some employers paying workers as little as 25 cents per hour for tasks such as sorting clothes and 5 cents per hour for cutting rags.
The fate of the proposed regulation now rests with President-elect Donald Trump. During his first term, Trump’s appointees at federal labor agencies often expanded business discretion and rolled back Obama-era regulations. While some Republicans support phasing out the subminimum wage, others, along with some parents of adults with disabilities, have expressed concerns about the potential consequences of altering the program.
Legal challenges are anticipated if the proposed rule is finalized, a common occurrence with significant regulatory changes.
The uncertainty surrounding the subminimum wage also casts doubt on another initiative: an attempt by Jennifer Abruzzo, the top prosecutor at the National Labor Relations Board (NLRB), to overturn a 2004 ruling that denied some disabled workers collective bargaining rights. Abruzzo argues that the ruling, which classified the relationship between some disabled workers and their non-profit employers as “primarily rehabilitative,” unfairly restricts their ability to unionize.
