DOL withdraws effort to end subminimum wages for workers with disabilities

The U.S. Department of Labor (DOL) has formally withdrawn a Biden-era proposal to phase out subminimum wages for certain workers with disabilities.

It’s a move that keeps the long-standing Section 14(c) program of the Fair Labor Standards Act (FLSA) in place for now.

Background

Under Section 14(c) of the FLSA, employers can apply for special certificates that allow them to pay wages below the federal minimum to workers whose earning or productive capacity is impaired by a physical or mental disability. Originally designed to prevent the curtailment of employment opportunities, the program has existed for decades and currently supports workers with a wide range of conditions, including intellectual and developmental disabilities, mental illness, and physical impairments.

In December 2024, the DOL under the Biden administration proposed phasing out the issuance of new Section 14(c) certificates over three years. The proposal was based on data showing declining use of the program — from 424,000 certificates in 2001 to around 40,500 in 2024 — and the belief that legal, social, and technological advances had created broader employment opportunities for workers with disabilities.

Why the withdrawal

After receiving over 17,000 comments (more than 11,000 of them unique), the DOL, now led by new leadership under the Trump administration, determined that it lacked the statutory authority to unilaterally end the program.

The agency concluded that Section 14(c) imposes a “mandatory duty” to issue certificates when employers qualify, and that eliminating them would require Congressional action rather than executive rulemaking.

The DOL also cited concerns raised in public comments that many workers with significant disabilities still rely on the program. Without it, commenters warned, some individuals could face unemployment, underemployment or loss of access to related support services.

Impact on employers

For now, the federal framework remains unchanged: employers can still apply for and renew Section 14(c) certificates. However, employers should be aware that more than a dozen states have already passed laws to phase out or ban the use of subminimum wage certificates, and legislation is pending in several others.

Employers should review pay policies to ensure compliance not just with federal requirements, but also with state and local laws, which may prohibit paying workers with disabilities less than the standard minimum wage.