Section 14(c) of the Fair Labor Standards Act (FLSA), passed 1938, allows public and private employers to obtain special certificates from the Department of Labor’s Wage & Hour Division that allow them to compensate workers with significant disabilities at rates below the current federal minimum wage based on the individual’s level of measured productivity. This results in a disproportionate number of individuals with intellectual and developmental disabilities being automatically placed into a sub-minimum wage position, usually in segregated facilities (like a sheltered workshop, for example) after exiting the public school system. Individuals with significant disabilities and their families are often told that there are no other options available to them, and are often pressured by public systems and service provider agencies to enter into this option and often has little relationship with an individual’s ability.
Criticisms of this practice range from charges of discriminatory wage setting to arguments that the measures of productivity are arbitrary and as such set standards for workers with disabilities that are not established for workers without disabilities. The Collaboration to Promote Self-Determination (CPSD) supports the implementation of a balanced approach to phase out and eventually eliminate FLSA sub-minimum wage provisions under Section 14(c) for all individuals (regardless of ability), while simultaneously building capacity to support individuals with significant disabilities in integrated employment paid at or above the prevailing minimum or industry wage rates.
Collaboration to Promote Self Development – Background on Section 14c of the Fair Labor Standards Act
- Establish soft time limits for any individual receiving a special minimum wage to
ensure that an individual doesn’t permanently receive a special minimum wage in a sheltered setting (Page 8)
- Reevaluate the way in which productivity percentages are
calculated. A more robust and less subjective formula can be developed which
eliminates the requirement of employers determining the local prevailing wage as a basis for worker productivity (Page 8)
- Expand pre-vocational training programs, an option currently available through Medicaid 1915(c) waivers (Page 8)
- Require sheltered workshops, subsidized by Section 14(c), to adequately train people with disabilities for real-world employment and provide job-relevant skills. (Page 18)
- Modify state contract preferences so that they cannot be used by employers who utilize segregated employment environments or where an employee is paid a sub-minimum wage (Page 46)
Code – Labor
Chapter – 21 Employment Discrimination