US Department of Labor Withdraws Plan to End Subminimum Wages for Disabled Workers

On July 7, the U.S. Department of Labor officially reversed its previous plan—introduced during the Biden administration—to eliminate the practice of paying disabled workers below minimum wage nationwide. Over the past decade, 16 states have already ended or begun phasing out subminimum wages for individuals with disabilities.

The decision drew criticism from disability advocates. Mia Ives-Rublee, from the Center for American Progress, noted the timing was particularly unfortunate, as Congress was also taking steps to improve support for disabled individuals, including efforts to safeguard healthcare and employment opportunities. She emphasized that this withdrawal risks further marginalizing disabled workers by reducing their earning potential and access to fair wages.

Subminimum wage employment for disabled individuals originated in 1938 with the Fair Labor Standards Act, initially targeting blind persons and veterans. Over time, the focus shifted to those with intellectual and developmental disabilities. Currently, more than 600 sheltered workshops across the country hold certificates allowing them to pay disabled workers below the federal minimum wage, which is $7.25 per hour.

The Department cited concerns over statutory authority and the persistence of state-level subminimum wage laws as reasons for its withdrawal. Critics argue that this system has long been used to provide employment opportunities for disabled workers, but recent research contends that ending subminimum wages does not negatively affect employment rates—in some states, employment for disabled workers has even increased post-reform.

For example, David Pinno, who worked in a sheltered workshop earning as little as $48 weekly, now earns $14 an hour at a local McDonald’s and advocates against the inhumane treatment often seen in sheltered workshops. Similarly, Carrie Varner transitioned from a menial workshop job to a state government role, where she earns a livable wage and has gained independence.

While federal policy indicates a rollback of protections for disabled workers, some states like Georgia are moving forward with reforms. Georgia’s governor signed legislation to phase out subminimum wages for disabled workers by 2027, reflecting a broader push for fair employment practices nationwide.