McMorris Rodgers Reintroduces Bipartisan, Bicameral Legislation to Create Equal Opportunities in Employment for Workers with Disabilities

GAO Report: Despite Progress, Workers with Disabilities Still at High Risk of Earning Subminimum Wage

Washington, D.C. – Eastern Washington Congresswoman Cathy McMorris Rodgers (WA-05) today announced she will reintroduce the bipartisan, bicameral Transformation to Competitive Integrated Employment Act. This legislation would provide states and employers with the resources to transition workers with disabilities into fully integrated and competitive jobs—which includes earning at least the minimum wage alongside individuals without disabilities—while phasing out the subminimum wage for individuals with disabilities.

She will be joined in introducing this bill by Representative Bobby Scott (D-VA) and Senators Steve Daines (R-MT) and Bob Casey (D-PA).

“America is the land of opportunity where no one is defined by the conditions of their birth. It’s in this spirit that we should be doing everything we can to bring people with disabilities off the sidelines and into the workforce,” said Rodgers. “This work started with creating and expanding ABLE accounts, which are empowering individuals with disabilities to reach their full potential. Today, with this bipartisan legislation, it continues on the next policy frontier – employment. Together, we can end the outdated practice of paying individuals with disabilities a subminimum wage and help them live more independent lives.”

Under Section 14(c) of the Fair Labor Standards Act, employers can apply for special certificates from the Department of Labor (DOL) to pay individuals with disabilities less than the federal minimum wage.  Under these certificates, there is no minimum floor for the hourly wage that an employer can pay an individual.

Today’s announcement follows the release of a new Government Accountability Office (GAO) report, which found workers with disabilities are still at high risk of earning subminimum wage.

“While GAO notes that the number of employers authorized to pay subminimum wages under the 14(c) program decreased by 50 percent between 2010 and 2019, the data suggest that most 14(c) workers are earning less than $3.50 per hour. In other words, they are still being denied equal opportunity in America,” said Scott. “It is long past time for Congress to phase out the subminimum wage for workers with disabilities and expand access to fulfilling employment and economic self-sufficiency. By fostering collaboration between employers and services providers, this bipartisan legislation makes clear that it is not only possible, but beneficial, to invest in fully integrated and competitive jobs for people with disabilities. We must take this next step to ensure that every worker can succeed in the workplace and earn a fair wage.”

GAO noted that—thanks, in part, to federal policies—employer and worker participation in the 14(c) program has declined. However, there remain disturbing patterns against 14(c) workers.  According to GAO, DOL identified labor law violations in two-thirds of its investigations into 14(c) employers between FY 2012-FY 2021, finding over $15 million in back wages owed to more than 73,500 workers. 

Additionally, the number of 14(c) workers transitioning to competitive integrated employment is small and has decreased, in part, because employers coping with the COVID-19 pandemic required more resources or services to transition workers to competitive integrated employment. 

“Paying workers less than the minimum wage is unacceptable. Everyone deserves to be paid a fair wage, and Americans with disabilities are no exception,” said Casey. “This commonsense, bipartisan bill would lift up people with disabilities by raising their wages and creating competitive jobs in workplaces that employ both workers with and without disabilities.”

“Montanans with disabilities contribute to our communities and their work is valuable—they should never be paid below minimum wage,” said Daines. “There is dignity and hope in work, so we should be doing all we can to expand opportunity and ensure fair pay to Montanans with disabilities in the workforce.”

GAO made three recommendations to DOL to improve its processing of 14(c) applications.  DOL agreed with all three recommendations.

In 2020, the U.S. Commission on Civil Rights called for phasing out the 14(c) subminimum wage, finding that it has “limited people with disabilities participating in the program from realizing their full potential while allowing providers and associated businesses to profit from their labor.”  Research also confirms that, with competitive employment, workers with disabilities are better able to achieve financial independence and spend time engaging in their community.  Thirteen states have either phased out workshops that pay subminimum wages or are in the process of doing so.

The Transformation to Competitive Integrated Employment Act:

  • Creates a competitive state grant program to assist states to transition all 14(c) certificate holders to models that support competitive, integrated employment for individuals with disabilities.  States will be able to apply for these transformation grants and must establish an advisory committee of key stakeholders, including employers, organizations specializing in employment for individuals with disabilities, Medicaid agencies, AbilityOne contractors, individuals with disabilities and their families, and vocational rehabilitation agencies.  States that successfully complete a grant will be eligible for a 25 percent increase in the allotment for supported employment for individuals with the most significant disabilities.
  • Creates a competitive grant program for current 14(c) certificate holders, located in states that do not apply for the state grant, to transition their business models to support individuals with disabilities in competitive integrated employment.
  • Immediately freezes the issuance of any new 14(c) certificates by DOL and phases out the use of existing 14(c) certificates over 5 years until employees are paid at least the federal minimum wage.
  • Establishes a technical assistance (TA) center to support all entities, even those not receiving the transformation grants, to transition to competitive integrated employment.  The TA center, which will be funded by DOL, is tasked with disseminating information about best practices, lessons learned, and models for transition to all entities transitioning to competitive, integrated employment.
  • Requires reporting and evaluation on the progress of creating and expanding the service delivery structure to support workers with disabilities in competitive integrated settings and the inclusive wraparound services they receive when not working.  States and 14(c) certificate holders will also be required to report on their grant activities, evaluate changes in employment for individuals with disabilities, report average wage information, and evaluate employer actions taken to comply with the phase out of 14(c) and transformation grants.

CLICK HERE to read the bill text.

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