The U.S. Department of Labor has announced, a proposed rule to phase out the issuance of certificates allowing employers to pay some workers with disabilities less than the federal minimum wage, currently $7.25 per hour, for the work they perform. 

The rule proposes to gradually eliminate certificates employers can apply for under, Section 14(c) of Fair Labor Standards Act that allow them to pay certain workers with disabilities subminimum wages. The department proposes to discontinue the issuance of new certificates and establish a three-year phase-out period for employers with existing certificates once a final rule becomes effective.

With its proposal, the DOL joins other states, including California, in recognizing that in the decades since such rules were enacted there have been significant legal and policy developments that have dramatically expanded employment opportunities and rights for individuals with disabilities. If adopted, the new rule will help ensure that workers with disabilities have access to equal employment opportunities while reinforcing the fundamental belief that all workers deserve fair compensation for their contributions.  

California’s phase-out plan banning subminimum wages for disabled workers was signed into law, September 27, 2023, and becomes effective January 1, 2025. This means an employee with a disability must be paid the state minimum wage or the applicable local minimum wage ordinance, whichever is higher.