Feds Allow Subminimum Wages for Disabled Workers to Continue

Takeaways

• The Trump administration recently withdrew a proposed rule change that would have eliminated Section 14(c) of the Fair Labor Standards Act, which allows employers to pay workers with disabilities less than the minimum wage.
• The Biden administration had previously proposed phasing out Section 14(c) certificates, arguing that legal and policy developments have expanded employment opportunities and protections for individuals with disabilities.
• The Trump administration cited legal constraints and ongoing demand for Section 14(c) certificates as reasons for withdrawing the amendment proposal, stating that the Department of Labor lacks the statutory authority to unilaterally end the program.
• Despite a significant decline in the use of these certificates nationwide, they will continue to be issued, meaning that qualified employers can still pay subminimum wages to workers with disabilities.

By withdrawing a proposed rule change, the Trump administration is allowing employers to continue to pay workers with disabilities less than minimum wage. Earlier this month, the U.S. Department of Labor announced that it is withdrawing its notice of proposed rulemaking in which it was considering amending Section 14(c) of the Fair Labor Standards Act. The proposal to change the rule was put forth by the Biden administration in December 2024.

What Is Section 14(c) of the Fair Labor Standards Act?

Section 14(c) of the Fair Labor Standards Act (FLSA) was enacted in 1938 and last substantively revised in 1989. It authorizes the Department of Labor’s Wage and Hour Division to issue special certificates allowing employers to pay workers with disabilities less than the federal minimum wage of $7.25 per hour, based on a worker’s earning capacity or productive capacity. This practice of subminimum wage employment was intended to increase employment opportunities for individuals with disabilities.

Why the Biden Administration Wanted to Amend the Rule

In December 2024, the Biden Department of Labor proposed eliminating Section 14(c). It sought to cease issuing new Section 14(c) certificates to employers and to phase out existing certificates over the following three years. The Biden administration determined that Section 14(c) certificates are no longer necessary because legal and policy developments have expanded employment opportunities and protections for individuals with disabilities over recent decades.

This assertion is supported by the phasing out of comparable subminimum wage provisions in several states and a significant decline in the use of Section 14(c) certificates nationwide. The Labor Department found a decline in the use of Section 14(c) certificates from around 424,000 workers in 2001 to about 40,579 in 2024.

Proponents of the rule change argue that Section 14(c) is discriminatory and undermines pay equity for workers with disabilities. By doing away with the subminimum wage certificates, workers with disabilities could improve their economic well-being and increase their sense of inclusion in the workplace and in society in general.

The proposal to eliminate Section 14(c) would, National Council on Disability Chair Claudia Gordon said, have “ensure[d] that people with disabilities are treated with dignity and respect, and that they have the chance to earn a fair wage and achieve economic security.”

Why the Trump Administration Withdrew the Proposed Amendment

On July 7, 2025, the Department of Labor officially withdrew the Biden administration’s amendment proposal, citing legal constraints and an ongoing demand for Section 14(c) certificates. The Trump administration asserts that the Labor Department doesn’t have the statutory authority to unilaterally and permanently end the Section 14(c) certificate program. Additionally, since the use of the word “shall” in the law indicates an obligation, the Labor Department is required to issue certificates to qualified applicants.

Despite the significant decline in workers whose wages are affected by the certificates, the Labor Department states that there is still a need for the certificates because there are still some in use. As of May 2024, about 800 employers across the country held Section 14(c) certificates. These include hospitals, businesses, and community rehabilitation workshops, or sheltered workshops.

For the time being, employers who qualify for Section 14(c) certificates will continue to be able to pay subminimum wages to workers with disabilities.

Additional Resources

In withdrawing the proposed rule change, the Trump Department of Labor has preserved Section 14(c). This will allow workers with disabilities to continue receiving subminimum wages under federal law — despite widespread ethical critique and growing momentum to abolish it. For many workers with disabilities, this means continuity in employment, though often at low wages. For now, states, rather than the federal government, are where lawmakers are phasing out the practice and making progress toward more competitive, inclusive jobs for workers with disabilities.

For additional reading about issues affecting workers with disabilities, check out the following articles:

• AbilityOne Program: Employment for People With Disabilities
• Employment Up for People With Disabilities But Gaps Remain
• A Vocational Training Program for Students With Disabilities
• What Is the Americans With Disabilities Act (ADA)?
• Competitive Integrated Employment: Working With a Disability