Movements chip away at the subminimum wage for people with disabilities

For two years, Alex Jaffe worked in an employment center for people with disabilities run by a local nonprofit outside Minneapolis. Five days a week, Jaffe, who is autistic, performed menial tasks like sorting zip ties, packaging medical supplies and loading cereal boxes.

Despite working full time, Jaffe’s earnings rarely matched the minimum wage. Instead, his pay was prorated based on the weight of the products he completed. In a good month, he’d make only $800. In the same period, coworkers with severe impairments would make even less: as little as $120.

“If the machinery broke down, your piece rate would go straight down the toilet,” said Jaffe, who has since gotten a degree in criminal justice and become a standup comedian. “Say you’re on an assembly line. If your supply runs out or the person on the forklift is slow, your productivity goes down and suddenly you’re not making anything.”

It was entirely legal, due to an exception in federal wage law that grants companies special certificates to pay subminimum wages to people with impairments to working. Over 45,000 Americans with disabilities are currently employed under these certificates. On average, they earn just over $3 per hour, according to a 2020 report from the U.S. Commission on Civil Rights.

Last year, Jaffe spoke up against the controversial policy. He testified in front of the Minnesota House of Representatives for a bill that would ban the practice. It passed a committee but fizzled when the pandemic hit weeks later.

His efforts are part of an ongoing movement nationwide seeking to eradicate the subminimum wage for people with disabilities, a practice already in decline. In the past decade, disability advocates have chipped away at the practice, passing legislation to phase it out in seven states. More states might join them: motions in South Carolina, Washington and Hawaii have progressed this month. The national push for a $15 minimum wage would also eliminate it.

The subminimum wage exception for people with disabilities is as old as the minimum wage itself. Both were established under the Fair Labor Standards Act of 1938. The special certificates were included to keep economic opportunities open for people with disabilities, but advocates say the structure doesn’t translate to present needs.

These certificates are not given to just any employer. Organizations apply for them from the Department of Labor, attesting that they meet stringent requirements. Most belong to community rehab programs providing vocational services to people with disabilities. Many run work centers like the one that employed Jaffe. Some place people in community jobs like hanging clothes at Goodwill outlets.

But many work centers don’t meet civil rights standards. Some strictly employ people with disabilities, which is a violation of the Americans with Disabilities Act, which forbids segregation by ability status, according to the 2020 Commission on Civil Rights report.

And while the end goal is transitioning to competitive jobs, few do. Advocates estimate well over half of work center employees don’t leave, despite often being able. This was the case of Angie Green of South Carolina, a 47-year-old woman with an intellectual disability who earned $3 per hour for over 15 years in her job cleaning hotels and offices before moving to another city and securing employment from the state’s university with a standard wage.

For Jaffe, who had held a job in fast food in high school with regular pay, the prospect of transitioning was elusive.

“Advancement opportunities felt like carrots that were dangled in front of me, but I was never actually offered one,” said Jaffe.

Minnesota, where Jaffe lives, currently has the highest concentration of people employed under subminimum wage per capita. The prevalence actually demonstrates the state’s infrastructure for people with disabilities.

“During the process of moving people with disabilities out of institutions, Minnesota developed a more robust system of day training and habilitation centers—or workshops, often using subminimum wages—than other states,” said a committee of representatives from Minnesota’s Department of Human Services and Department of Employment and Economic Development. “This system contributed to a higher usage of subminimum wages that has persisted and presents a unique challenge in transitioning our supports. 

Employers who exercise subminimum wage certificates insist that when used correctly, they can be essential in helping people with disabilities develop skills and feel a sense of fulfillment.

“It’s a fantastic tool for us to support people who need extra time and help to learn the skills to move on to their next goal,” said Bill Schultz, CEO of Opportunity Partners in Minnetonka, which runs a vocational facility as well as healthcare and residential support programs for people with disabilities. They employ a mix of people with and without disabilities under a variety of jobs both above and below minimum wage, working closely with clients to figure out their best career path. 

“We’re not subminimum wage certificate zealots,” said Schultz. “We believe there’s a job out there for every single person we support where they could work independently,” said Schultz. “It just could take a lot of time for some people.” 

Additionally, Opportunity Partners and similar facilities accommodate the needs of people with all sorts of disabilities, including some who need help eating, repositioning themselves and using the restroom. Though the ADA says private employers must offer reasonable accommodations, those causing “undue” financial burden are not protected.

Schultz sees taking away these certificates as closing a door for people to develop skills, be part of a community and feel a sense of accomplishment. He says he’d prefer the need for these certificates to subside.

Beyond that, proponents of subminimum wage certificates warn that higher wages can jeopardize access to a network of expensive governmental supports like social security insurance, sponsored caregivers and transportation services. Once an individual meets an income threshold, they risk losing these services. If subminimum wages end, they insist the policies it’s entangled with must adjust accordingly.

The National Down Syndrome Society, a vocal proponent of ending the subminimum wage, calls this “Law Syndrome.”

“Essentially, Down syndrome isn’t what holds people with Down syndrome back—it’s antiquated laws that do,” said Nicole Patton, their grassroots advocacy manager. “It’s not just the subminimum wage, but things like the inability to get married without losing benefits since a spouse’s income counts towards eligibility.” 

In recent years, seven states and several municipalities have started to phase out the practice. Together, these locales represent 14% of Americans. They’ve looked to Vermont, which banned it over a decade before the rest of the pack, as a model for successful transition.

Activists in at least ten other states are fighting to join them. Last week, advocates in South Carolina succeeded in pushing legislation through their Senate to halt new certificates and create a task force to transition 1,200 South Carolinians to competitive employment by 2024. The resolution passed unanimously after impassioned testimonies from people with disabilities and lawmakers. It awaits a vote in their state House.

“It’s a civil and human rights issue,” said Sarah Nichols of AbleSC, the organization leading the charge.

Subminimum wage is steadily declining, not only due to state regulations but also individual employers’ choices to drop it. A decade ago, there were over 3,750 employers with certificates. Today, there are just 1,350, and many remain closed due to the pandemic. That’s part of why South Carolinian advocates chose now to take action.

“It’s a good time for us to halt the subminimum wage and not bring in any extra people, to make the transition period as easy as possible,” said Nichols.

As state movements and shifting norms erode the subminimum wage’s prevalence, federal legislation might wipe it away entirely: the $15 minimum wage bill, currently under evaluation in Senate, would include people with disabilities.

It excites advocacy groups, but they’ll continue fighting for the existing minimum wage in the meantime. 

“We’d be very happy, but we haven’t actively advocated for it,” said Patton of the National Down Syndrome Society. “It’s messy and political.”