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In a significant move, the U.S. Department of Labor (DOL) announced on Tuesday that it will proceed with a rule designed to eliminate the ability of employers to pay workers with disabilities below the federal minimum wage. This decision marks a crucial step in the final weeks of President Joe Biden’s administration, addressing an issue that has been in the works for years.

The new rule, known as Employment of Workers With Disabilities Under Section 14(c) of the Fair Labor Standards Act, will effectively end the practice of issuing new certificates under Section 14(c). This provision has long allowed employers to pay workers with disabilities less than the federal minimum wage of $7.25 per hour. Employers who already hold certificates will still be permitted to pay below minimum wage for up to three more years, after which the practice will be phased out entirely.

Ending a Controversial Practice with Broad Implications

The DOL's announcement signals a major shift in labor policy, aimed at increasing wages for workers with disabilities and promoting their economic independence. The department believes that by ending Section 14(c), the rule will help workers with disabilities integrate into the broader workforce, offering better opportunities and higher wages.

"If finalized, the department believes this proposal would increase wages, improving the economic self-sufficiency of these workers," the DOL said. "Along with the broader shifts in opportunities for workers with disabilities, this proposal could lead to an increase in the overall labor force participation rate for persons with disabilities."

The rule marks the strongest federal action yet to end the practice of subminimum wages for disabled workers, which has existed under Section 14(c) since the 1930s. As the Biden administration pushes forward, the proposal is expected to face a notice and comment period, typically lasting 30 to 60 days, before it is finalized.

Bipartisan Support for Ending Subminimum Wages

The push to eliminate Section 14(c) has been ongoing for years, with strong support from both Democratic and Republican lawmakers. While the Democratic-led Raise the Wage Act and the Transformation to Competitive Integrated Employment Act remain pending, they both seek to address the issue of subminimum wages for disabled workers. The Democratic Party’s platforms in both 2020 and 2024 included a commitment to ending the practice.

Additionally, the Biden administration has already taken steps to limit subminimum wages in other areas. In 2021, the DOL banned the use of subminimum wage for federal contract workers with disabilities, aligning with its broader efforts to raise wages for federal contractors.

State-Level Momentum Paves the Way for Federal Action

While the federal government has lagged behind in addressing subminimum wages, progress has been made at the state level. Over the past decade, more than a dozen states have passed laws prohibiting the payment of subminimum wages to workers with disabilities, leading to a dramatic decline in the number of employers utilizing Section 14(c) certificates.