Federal Disability Employment Program Prohibits Under-Minimum Wage

A man with Down syndrome picks up litter for his sub-minimum wage job in 2015. Under a new rule coming into effect this fall, jobs in the AbilityOne program will no longer pay less than minimum wage. (David Joles/Star Tribune/TNS)

A major federal program that facilitates the employment of people with disabilities working on government contracts will soon no longer allow them to be paid below minimum wage.

Under a rule finalized this month, the AbilityOne program will prohibit the payment of what is called sub-minimum wage.

Current law allows employers to obtain special 14(c) certificates from the U.S. Department of Labor to pay people with disabilities less than the federal minimum of $7.25 an hour, but more cities and d States prohibit this practice.

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The new rule, which will come into effect on October 19, will prohibit the use of 14(c) certificates to pay employees working on new AbilityOne contracts as well as extensions or renewals and when exercising options on existing contracts. However, nonprofits working with AbilityOne have the option of requesting an extension of up to one year to achieve compliance.

“Ending sub-minimum wage payments is a major step forward for the AbilityOne program,” said Jeffrey Koses, chairman of the AbilityOne Commission, an independent federal agency that administers the program. “While payment of sub-minimum wages has been declining in the program for years, it is past time to ensure that all employees are fairly compensated for their work.”

With this change, people with disabilities employed under AbilityOne contracts will earn at least the federal, state, or local minimum wage. In some cases, they will be paid even more due to federal salary requirements for certain types of jobs.

Approximately 40,000 people who are blind or have significant disabilities are employed by AbilityOne at more than 1,000 locations across the country. The program directs federal contracts to a network of some 450 nonprofits, which provided nearly $4 billion in goods and services to the government in fiscal 2021 alone.

Finalizing the rule makes good on a plan that was proposed last fall. AbilityOne said it received 183 comments in response to the proposal, of which the “overwhelming majority” were in favor.

The scheme has come under pressure in recent years, with a 2020 report from the National Disability Council claiming that AbilityOne promotes segregation, does not increase employment opportunities for people with disabilities and should end.

Eric Buehlmann, deputy executive director for public policy at the National Disability Rights Network, welcomed AbilityOne’s decision to stop paying the below-minimum wage, but said the commission that administers the program should do more.

“It is long overdue for the commission to prohibit the payment of below-minimum wages for employees on AbilityOne contracts,” he said. “However, the rule does not go far enough. The commission should also have prevented participating AbilityOne nonprofits from using 14(c) certificates anywhere in their workforce, not just on AbilityOne contracts.

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