The U.S. Department of Labor (DOL) has announced a proposed rule to phase out the distribution of certificates that allow employers to pay certain workers with disabilities less than the federal minimum wage of $7.25 per hour. The rule proposes to gradually eliminate certificates that employers can apply for under Section 14(c) of the Fair Labor Standards Act (FLSA), which allows them to pay subminimum wages to certain workers with disabilities. For nearly a century, it has been legal in the U.S. to pay some individuals with disabilities below the minimum wage. Currently, about 40,000 American workers fall into this category, with some earning as little as 5 cents an hour.
Key Details Of The Proposal
- Phase-out timeline: If adopted, new 14(c) certifications will no longer be issued. Existing programs will be phased out over three years starting from the final rule's effective date.
- Legal and political challenges: The proposal must navigate public commentary, possible legal hurdles, and political opposition before becoming finalized.
- Economic and workplace impacts: Employers and advocacy groups have debated the implications, with some fearing fewer opportunities for workers with disabilities and others emphasizing the need for equity in the workplace.
What’s Next?
The DOL is currently seeking public feedback on the proposal. Employers should monitor these developments closely to prepare for potential regulatory changes. If finalized, businesses employing workers under 14(c) must reevaluate their wage practices and compliance strategies.
How GMS Can Help
Navigating evolving employment regulations can be challenging. Group Management Services (GMS) specializes in helping businesses stay compliant with labor laws, including wage and hour rules. From workforce management to payroll processing and compliance guidance, GMS provides the expertise and tools you need to adapt to regulatory changes while supporting your employees. Contact us today to learn how we can help your business stay compliant.