It’s Time for a Bigger Paycheck: How Subminimum Wage Laws Hurt People with Disabilities

Naomi Voehl*

The month of October is National Disability Employment Awareness Month, so it is a time to celebrate the accomplishments of people with disabilities in the workforce as well as inspect areas of disability rights that still need tremendous growth. The Americans with Disabilities Act (ADA) was created in 1990 to address decades-long issues of disability discrimination in the United States.¹ According to its findings and purpose, “[H]istorically, society has tended to isolate and segregate individuals with disabilities, and, despite some improvements, such forms of discrimination against individuals with disabilities continue to be a serious and pervasive social problem.”² One of these major problems is the fact that at the federal and state levels, employers are legally allowed to pay people with disabilities less than the minimum wage.³ This is in complete contradiction to the ADA, which also states in its findings and purpose that people with mental and physical disabilities have the same right as anyone else to work, participate, and contribute to American society.⁴ While disability rights are certainly a discussion that should be held every month of the year, this month especially is the time to expose discrimination that has been swept under the rug for years.

The Fair Labor Standards Act (FLSA) allows for workers with disabilities to be paid less than minimum wage if the employer properly applies for a special permit.⁵ The employer must demonstrate that the employee has a mental or physical disability that impairs their productivity and earning capacity.⁶ The U.S. Department of Labor provides a vague explanation on what types of disabilities qualify for employers to apply for a subminimum wage permit. They say that disabilities “include blindness, mental illness, developmental disabilities, cerebral palsy, alcoholism, and drug addiction,” which means that the list is not exhaustive.⁷ The subminimum wage for each person with a disability is calculated by measuring that individual’s level of productivity doing that specific job against a non-disabled worker’s level of productivity doing the exact same job. The wage rate is then docked in proportion to the difference in percentage of productivity between the two workers.⁸ Calculating subminimum wages also considers the quality, quantity, and type of work performed. The employer must reevaluate the productivity of such employees every six months.⁹ The ADA included in its list of ways in which people with disabilities have been discriminated “relegation to lesser services, programs, activities, benefits, jobs, or other opportunities,”¹⁰ so the fact that a law called the “Fair Labor Standards Act” allows for this wage discrimination, lesser quality of jobs, and loss of benefits is alarmingly ironic.

At least sixteen states have banned this subminimum wage, but the vast majority of states, including Minnesota, still follow the FLSA standard.¹¹ For a state government that has been known to pride itself on being one of the most pro-disability states in America, the fact that these subminimum wages are still legal should be an embarrassment to the Minnesota legislature. While advocating for disability rights in 2021, Governor Tim Walz even said that he is “committed to the spirit and letter of the ADA,”¹² but in that same year around 4,500–6,000 workers with disabilities were making subminimum wage in Minnesota.¹³ As of October 2022, the average person in Minnesota making subminimum wage due to a disability makes less than four dollars per hour.¹⁴ That average is only two dollars more per hour than the wages of many incarcerated workers in Minnesota, meaning there are some if not many workers with disabilities making even less than incarcerated workers.¹⁵

One cannot say that the Minnesota legislature has done nothing about the subminimum wage problem, however. They created a Task Force that conducted research and ultimately published an opinion that can only be described as stating the obvious: Denying equal pay for workers with disabilities should “raise significant concerns . . . from a civil rights perspective.”¹⁶ For one example, the Task Force notes that most of the employers who utilize subminimum wage permits are organizations, called community rehabilitation providers, that specifically designate workspaces and jobs for people with disabilities.¹⁷ Sounds pretty nice and inclusive, right? However, in addition to the pathetic pay, community rehabilitation providers segregate these employees from the rest of the workforce in what are known as sheltered workshops, and many of them are subjected to performing menial and monotonous tasks.¹⁸ This is not only degrading, but it is also the opposite of inclusive; it isolates employees with disabilities from the rest of the working world and thus prevents them from learning and working in a normal competitive and collaborative environment. If we have learned anything from history, we should have learned by now that segregation leads to a destructive superiority/inferiority complex that feeds into the lies that some people are less than others simply because of the way they were born or the way they look.

It is important to note that the Task Force did provide some guidance for a proposed plan to phase out subminimum wage in Minnesota.¹⁹ Minnesota lawmakers had actually included such a phase-out plan in their giant Human Services Bill this year, however that provision was scrapped at the last minute and not ultimately included in the passing of the bill.²⁰ While the purpose of this blog is not to delve into whether this specific proposal would have been a good overall plan, the lack of its inclusion in the bill is indicative that sadly, advancing rights for people with disabilities has yet again slipped through the cracks of legislators’ agendas.

Some people are concerned that abolishing the subminimum wage will disincentivize employers from hiring people with disabilities and reduce job opportunities.²¹ In fact, this exact concern is why President Franklin D. Roosevelt included this provision in the FLSA in 1938. He wanted to ensure that workers with disabilities would have access to employment opportunities that they otherwise might not have.²² However, this is an antiquated concern because, at the time, the ADA had not been created, so there was no legal requirement for employers to even think about hiring people with disabilities. Now, with the ADA (which was only passed less than twenty-five years ago), it is illegal for employers to discriminate against qualified employees with disabilities in hiring, firing, and promoting.²³ (A qualified individual is one that can “perform the essential functions” of the job “with or without reasonable accommodation.”)²⁴ In fact, the ADA specifically states that such discrimination includes “limiting, segregating, or classifying a job applicant or employee in a way that adversely affects the opportunities” and “excluding or otherwise denying equal jobs or benefits to a qualified individual because of the known disability.”²⁵ Therefore, the ADA strictly prohibits the very concern that FDR had in 1938. Further, the subminimum wage in the FLSA and in the many states that still have similar laws allows employers to deny people with disabilities equal pay and treatment, which is a clear violation of the ADA.

While the U.S. Department of Labor notes that just because a person has a disability does not mean that they will automatically qualify for an employer to pay them subminimum wage,²⁶ the government’s stance on workers with disabilities is disturbingly clear: Their hard work should not be valued at the same level as the rest of society. This completely contradicts the whole purpose of the ADA, which said as a reason for its creation, “people with disabilities, as a group, occupy an inferior status in our society, and are severely disadvantaged socially, vocationally, economically, and educationally.”²⁷ Additionally, the ADA also rightfully points out that disability discrimination throughout the country actually “costs the United States billions of dollars in unnecessary expenses resulting from dependency and nonproductivity.”²⁸ When people are not afforded the same opportunities for work and economic success, they have no choice but to rely on government funding or stay in government funded housing in order to live. Thus, they are unable to contribute to the free economy and production chain in society. Again, this is a straight contradiction to what the ADA framers intended. Congress states that part of their goals for people with disabilities is to ensure “independent living” and “economic self-sufficiency.”²⁹ This goal is pretty difficult to fulfill when people with disabilities can be paid less than four dollars an hour in isolating jobs that completely demean one’s sense of self-worth. It is simply anti-inclusive and anti-ADA to put a cap on the opportunities of a group of people to be able to work, live, and fully engage in the broader community. It is time to stop placing limits on their capabilities and potential for productivity and success in life, and one way to help is to abolish the discriminatory subminimum wage for people with disabilities.

* J.D. Candidate, University of St. Thomas School of Law Class of 2025 (Senior Editor).

1. 42 U.S.C. § 12101 (1990). ↩︎
2. Id. ↩︎
3. Kevin Hardy, Disabled Workers Can Be Paid Less Than the Minimum Wage. Some States Want to End That, Minn. Reformer (Apr. 1, 2024, 5:30 AM), https://minnesotareformer.com/2024/04/01/disabled-workers-can-be-paid-less-than-the-minimum-wage-some-states-want-to-end-that/. ↩︎
4. 42 U.S.C. § 12101. ↩︎
5. 29 U.S.C. § 214(c) (1938). ↩︎
6. Id. ↩︎
7. Wage and Hour Division, Fact Sheet #39: The Employment of Workers with Disabilities at Subminimum Wages, U.S. Dep’t of Lab. (Jul. 2008), https://www.dol.gov/agencies/whd/fact-sheets/39-14c-subminimum-wage. ↩︎
8. Id. ↩︎
9. Id. ↩︎
10. 42 U.S.C. § 12101. ↩︎
11. Hardy, supra note 3. ↩︎
12. Governor Makes Comments and Commitments to Disability Communities, Minn. Council on Disability (Mar. 29, 2021), https://www.disability.state.mn.us/2021/03/29/governor-makes-comments-and-commitments-to-disability-communities/. ↩︎
13. Task Force on Eliminating Subminimum Wages, Initial Background Brief: Subminimum Wage Use, Concerns, Trends Among States, and Resources, Minn. Dep’t of Hum. Servs., at 2 (2022), https://mn.gov/dhs/assets/TFESW%20Initial%20Background%20Brief-accessible_tcm1053-521663.pdf. ↩︎
14. Minn. Disability L. Ctr., Ending the Subminimum Wage in Minnesota, at 4 (2022), https://mylegalaid.org/wp-content/uploads/2024/03/Ending-the-Subminium-Wage-in-Minnesota_October-2022-sm.pdf. ↩︎
15. Zach Courtney, A Look into the Issue of Underpaid Prison Labor, Minn. Daily (Feb. 16, 2023), https://mndaily.com/275460/opinion/courtney-a-look-into-the-issue-of-underpaid-prison-labor/#:~:text=According%20to%20a%20Minnesota%20statute,cents%20to%20%242%20per%20hour. ↩︎
16. Task Force, supra note 13, at 4. ↩︎
17. Task Force, supra note 13, at 1. ↩︎
18. Task Force, supra note 13. ↩︎
19. Task Force, supra note 13, at 4–5. ↩︎
20. Miranda Bryant, House, Senate Negotiators Nix Phase-Out of Subminimum Wage in Human Services Bill, Minn. House of Representatives (May 3, 2024, 3:50 PM), https://www.house.mn.gov/SessionDaily/Story/18361. ↩︎
21. Hardy, supra note 3. ↩︎
22. Hardy, supra note 3. ↩︎
23. 42 U.S.C. § 12112(a) (1990). ↩︎
24. 42 U.S.C. § 12111(8) (1990). ↩︎
25. 42 U.S.C. § 12112(b) (1990). ↩︎
26. Wage and Hour Division, supra note 7. ↩︎
27. 42 U.S.C. § 12101. ↩︎
28. 42 U.S.C. § 12101. ↩︎
29. 42 U.S.C. § 12101. ↩︎