Subminimum Wages for People with Disabilities
The Fair Labor Standards Act (FLSA) of 1938 and Utah Tax Code
Highlights & Key Recommendations
- Summary of the Fair Labor Standards Act, section 14(c) and Utah Code Title 34 Chapter 40 Part 104 Section 104 (2)(a)
- How section 14(c) certificates have resulted in the unequal treatment of persons with disabilities
Background
The Fair Labor Standards Act (FLSA), section 14(c), is a federal law passed in 1938 which “authorizes employers, after receiving a certificate from the Wage and Hour Division, to pay subminimum wages – wages less than the Federal minimum wage – to workers who have disabilities for the work being performed”5. This act provides a way for employers to obtain government certification to pay employees with disabilities below minimum wage, based on disabilities that “may affect productive capacity” which include: “blindness, mental illness, developmental disabilities, cerebral palsy, alcoholism and drug addiction”4. This policy is only supposed to be applied when a person’s disability impairs the work the individual would be doing for their employer.
The State of Utah has permitted employers the use of section 14(c) certificates through Utah Code Title 34 Chapter 40 Part 104 Section 104 (2)(a) which reads, “Persons with a disability whose earnings or productive capacities are impaired by age, physical or mental deficiencies, or injury may be employed at wages that are lower than the minimum wage, provided the wage is related to the employee's productivity”7. There are currently four total disability service providers in Utah who have been issued section 14(c) certificates, affecting almost 300 employees with disabilities5. While this number has seen a marked decrease over the years, we continue to advocate for all employees with disabilities to have the same rights as employees without disabilities.
Areas of Concern
The IDRPP has identified many issues with the FLSA, section 14(c). These issues include concerns around accountability for employers who use 14(c) certificates, lack of adequate monitoring for workplaces that pay individuals with disabilities sub-minimum wage, and the unequal treatment of people with disabilities as second-class citizens in the workplace and in society. One of the primary concerns of the FLSA, section 14(c), is the lack of accountability of employers who use subminimum wage certificates to pay individuals with disabilities. There are currently no explicit monitoring or accountability standards set up for employers who use section 14(c) certificates as well as no formal system in place to review and ensure compliance with general labor standards and practices. Without these standards and systems in place, workers with disabilities have experienced abuse, exploitation, and segregation. Examples include:
(1) In April 2018, the U.S. Department of Labor revoked Rock River Valley Self Help Enterprises’ section 14(c) certificates after finding the company has been exploiting “nearly 250 workers with disabilities”. This company was found guilty of paying workers with gift cards instead of wages as well as failure to conduct the proper time studies required by the Wage and Hour Division6.
(2) In February 2016, an administrative judge from the U.S. Department of Labor found Seneca Re-Ad, a sheltered workshop based in Ohio, guilty of failure to show three employees who were being paid subminimum wages were “impaired for the work performed”3. The three employees who were named in the suit reported not only wrongfully being paid sub-minimum wage, but also reported being denied reasonable accommodations, such as a protective dust-mask for asthma related health needs and breaks for an individual with Autism to avoid becoming overstimulated. The three employees were awarded ongoing minimum wage and backpay2.
(3) In June 2013, The Department of Justice took action against a Rhode Island school who was using section 14(c) certificates to employ students with disabilities during their transition years. The Department of Justice found the state of Rhode Island at fault of putting these students at serious risk of being placed at segregated day services and not having opportunities to integrated programs or competitive employment. As a result, Rhode Island’s governor issued an executive order to close down all sheltered workshops3.
At the root of these issues is a fundamental concern about the human rights and dignity of individuals with disabilities. If we, as a society, value the lives and labor of people with disabilities, we should be paying this population a fair and equal wage. By allowing employers to pay workers with disabilities less than minimum wage we reinforce the idea that people with disabilities are second class citizens and are less valuable than a person without a disability. The notion that the work of individuals with disabilities doesn’t deserve equal pay leaves the door open “to abuse, neglect, discrimination and exploitation”1. If individuals with disabilities are not valued on a legislative level to receive equal pay for their work, how do we expect society to also value and treat them with the dignity and respect that they deserve as human beings?
Our Position
Despite states and businesses taking action to resolve the concerns with section14(c) certificates, there are still many corporations nationwide, and in Utah, who continue to profit from paying individuals subminimum wages. This 82-year-old policy allows for the blatant exploitation of workers with disabilities as well as furthers the societal stigmatization of all people with disabilities. The State of Utah can support employees with disabilities by ensuring they receive fair pay for their work through policy changes that eliminate the use of 14(c) certificates and support disability service providers to transition their business or program model to support competitive integrated employment for all individuals with disabilities.
References
1Disability Justice. (2019). Dehumanization, Discrimination, and Segregation. Retrieved from https://disabilityjustice.org/justice-denied/dehumanization-discrimination-and-segregation/
2Disability Rights Ohio. (2018, Dec 18). Three workers with disabilities previously paid subminimum wage sue Roppe Industries for employment discrimination. https://www.disabilityrightsohio.org/news/three-workerswith- disabilities-previously-paid-subminimum-wage-sue-multinational
3National Disability Rights Network. (2016, Feb 4). THE WRITING ON THE WALL NEARING THE END OF SHELTERED AND SEGREGATED EMPLOYMENT. https://www.ndrn.org/wpcontent/ uploads/2019/03/The_Writing_on_the_Wall.pdf
4U.S. Department of Labor. (2008). Fact Sheet #39: The Employment of Workers with Disabilities at Subminimum Wages. Wage and Hour Division. Retrieved from https://www.dol.gov/agencies/whd/factsheets/ 39-14c-subminimum-wage
5U.S. Department of Labor. (2026, July 27). Community Rehabilitation Programs (CRPs) List. Wage and Hour Division. Retrieved from https://www.dol.gov/whd/regs/compliance/whdfs39.htm
6U.S. Department of Labor. (2018, April 23). U.S. Department of Labor Acts to Protect Individuals with Disabilities from Workplace Exploitation. Wage and Hour Division. Retrieved from https://www.dol.gov/ newsroom/releases/whd/whd20180423 7 Utah State Legislature. (2008). 34-40-104 Exemptions. https://le.utah.gov/xcode/Title34/Chapter40/34-40- S104.html
Contact: Aubrey Snyder • 435-797-0528 • Aubrey.Snyder@usu.edu