Minnesota Disability Law Center submits comment to Department of Labor

FOR IMMEDIATE RELEASE: (Minneapolis, Minn.) — In response to the U.S. Department of Labor’s invitation for public comment [on rulemaking for employees with disabilities], the Minnesota Disability Law Center of Mid-Minnesota Legal Aid has submitted the statement below. Constituents and advocates of the disability community are encouraged to submit their own.

January 15. 2025
 
U.S. Department of Labor – Wage & Hour Division
Room S-3502
200 Constitution Avenue NW
Washington, DC 20210

RE: Public Comment on Proposed Rulemaking: Employment of Workers with Disabilities Under
        Section 14(C) of the Fair Labor Standards Act (Regulatory Information Number: 1235-AA14)
 
To Whom It May Concern,
 
The Minnesota Disability Law Center (MDLC), a statewide division of Mid-Minnesota Legal Aid (MMLA), supports the Proposed Rule phasing out the issuance of subminimum wage certificates under Section 14(C) of the Fair Labor Standards Act (FLSA). The end of this discriminatory practice is long overdue. Not only is the practice discriminatory and unlawful on its face, the payment of subminimum wages are no longer necessary to “prevent the curtailment of opportunities for employment.”[1] We urge the U.S. Department of Labor to exercise their authority to interpret the FLSA and phase out the issuance of 14(C) Certificates with all deliberate speed.
 
MMLA is the federally funded Protection and Advocacy (P&A) system for the State of Minnesota pursuant to the Developmental Disabilities Assistance and Bill of Rights Act (DD Act), 42 U.S.C. § 15041, et. seq. MMLA fulfills its role as the P&A system through its statewide project, the MDLC. We also are a civil legal services program and a non-profit. We do not charge our clients for our services. Our Attorneys and Legal Advocates represent clients in a variety of employment contexts, including representing individuals who earn subminimum wages.
 
MDLC is committed to ensuring that people with disabilities have access to the services and supports they need to live, work, and thrive in their communities. To that end, our office has devoted significant resources to advocating for the phase out of subminimum wages in Minnesota, and the expansion of opportunities for competitive, integrated employment for people with disabilities.
 
In 2017, our office initiated a project to monitor facilities that pay workers with disabilities a subminimum wage under a 14(C) certificate.[2] That year, we also obtained records from the Department of Labor, Wage and Hour Division, under the Freedom of Information Act (FOIA) to review the use of subminimum wage employment by Minnesota Community Rehabilitation Providers (CRPs). In 2022, based on our findings from these projects, we issued a report advocating for the phase out of subminimum wages in Minnesota.[3] Since that time, MDLC staff have served on the Minnesota Task Force on Eliminating the Subminimum Wage and supported legislative efforts to curtail the practice.[4]
 
From these experiences, our office has found that the subminimum wage is an outdated, discriminatory practice that must end if we are to build a just, inclusive future for people with disabilities. Further, our findings confirm that the subminimum wage is no longer necessary to “prevent the curtailment of opportunities” for workers with disabilities. All told, we believe there are ample reasons for the Department of Labor (DOL) to sustain this Proposed Rule, and sunset the 14(C) Certificate program.
 
The Subminimum Wage is an Outdated, Discriminatory Practice
 
Minnesota began providing comprehensive rehabilitation services to people with disabilities in 1919.[5] In 1920, Minnesota established the first state vocational rehabilitation agency for people with disabilities, designed to operate alongside the existing state rehabilitation agency for visually impaired persons.[6] In 1938, the FLSA was passed by Congress, providing basic labor protections including Federal minimum wage.[7] As part of the FLSA, Section 14(C) authorized the DOL to issue certificates permitting the payment of subminimum wages to people with disabilities.[8]
 
Following the passage of the FLSA, thousands of public and private entities nationwide established rehabilitation facilities which employed people with disabilities in settings segregated from the non-disabled workforce.[9] In Minnesota, several sheltered workshops emerged, employing over 4,300 Minnesotans with disabilities by 1980.[10]
 
At the time it was enacted, Section 14(C) of the FLSA was built on a laudable – though necessarily ableist – goal: to provide for the rehabilitation and full employment of people with disabilities. The 14(C) program never fulfilled this promise. Instead, the 14(C) program quickly devolved into a regime of segregation for people with disabilities. By the 1980s, disability rights advocates began scrutinizing the discriminatory premise of sheltered workshops that paid subminimum wage.
 
In 1984, the Minnesota Office of the Legislative Auditor authored an evaluation of sheltered workshops.[11] The report highlighted that the average sheltered worker with disabilities earned $1.66 per hour and worked for only 20 hours per week.[12] Further, the workshops were not meeting their stated goal to ‘rehabilitate’ workers; in 1983, only 83 out of 3,000 sheltered workers (or, about 2.8 percent) were placed in community jobs.[13] Other reports issued during this period emphasized that sheltered workshops denied people with disabilities dignity, respect, and equal access to opportunities.[14]
 
This scrutiny has continued to the present. Over the past 40 years, multiple studies have called for reform (or the end) of the subminimum wage.[15] According to a 2020 report by the United States Commission on Civil Rights (USCCR), the program is “antiquated,” and its continued operation runs afoul of applicable civil rights law.[16] In 2022, a Legislative Task Force in Minnesota called for the gradual phase-out of subminimum wages in Minnesota.[17]
 
In addition, multiple legal developments have challenged the legality of subminimum wage programs. The Americans with Disabilities Act (ADA) was signed into law on July 26, 1990.[18] The Attorney General promulgated regulations interpreting Title II of the ADA to include an “integration mandate”: “[i]ntegration is fundamental to the purposes of the Americans with Disabilities Act…provision of segregated accommodations and services relegates persons with disabilities to second-class status.”[19] In Olmstead v. L.C., the Supreme Court held that “the unjustified segregation of individuals with disabilities” constitutes discrimination under the ADA.[20]
 
Since Olmstead, multiple courts have found that the subminimum wage violates the ADA and have ordered States to end their 14(C) programs.[21] The Department of Justice concurs: their most recent Olmstead Guidance makes clear that sheltered workshops are not consistent with the integration mandate of Title II.[22] 
 
Today, 25.5% of Minnesotans who have disabilities live in poverty.[23] Paying people with disabilities less than minimum wage contributes significantly to this poverty. The average subminimum wage worker with disabilities earns less than $4.00 per hour,[24] substantially less than Minnesota’s minimum wage of $11.13 an hour. [25] Some people earning subminimum wages made as little as seven cents per hour.[26] Not only do these workers earn a low wage, but the number of hours they can work is also often limited. Most subminimum wage workers in Minnesota work fewer than eight hours per week.[27]
 
Further, many employers who pay their workers a subminimum wage do so in segregated settings, where workers with disabilities only work alongside other people with disabilities and not in the general community. Of the employers authorized to pay a subminimum wage, the vast majority are CRPs, often referred to as sheltered workshops. CRPs mainly employ people with disabilities and typically include repetitive jobs such as light assembly, card packing, or shredding paper.
 
Altogether, there is broad consensus that the payment of subminimum wages for people with disabilities is outdated, discriminatory, and unlawful. The DOL should use all tools at their discretion to end the practice immediately and focus on competitive integrated employment.
 
The Subminimum Wage is No Longer Necessary to Prevent the Curtailment of Employment
 
Under the FLSA, the DOL is authorized to issue certificates allowing employers to pay subminimum wages to workers with disabilities, in circumstances where such certificates are necessary to “prevent the curtailment of opportunities for employment.”[28] The plain language of the law makes clear that it is within the DOL’s statutory authority to determine whether this curtailment standard has been met.^[29] 
Since 1938, and particularly in the last 25 years, there has been considerable progress in federal law, employment programs, assistive technology, and state and federal policy to improve employment opportunities for people with disabilities. With these developments, the subminimum wage is no longer necessary to prevent the curtailment of opportunities for people with disabilities.
Of course, people with disabilities continue to face obstacles in obtaining and maintaining employment. Yet, there is sufficient funding, technical assistance, and available individualized supports to ensure a smooth transition away from models of subminimum wage employment, and towards models of community, integrated employment. Arguably, the main headwind “curtailing” employment opportunities for people with disabilities is the subminimum wage program itself.[30]
In Minnesota, recent developments demonstrate that the subminimum wage is no longer needed to “prevent the curtailment” of employment opportunities for people with disabilities. In 2022, Minnesota was awarded a $13 million federal grant to transition away from subminimum wage employment.[31]Multiple subminimum wage providers have accessed this funding and successfully transitioned away from subminimum wage.[32] In 2023, the Minnesota Legislature authorized a historic investment in programs to support Minnesotans with disabilities in community jobs.[33]
These investments have shown positive results: the number of individuals earning subminimum wage has dropped from 6000 individuals in 2021 to 3493 individuals today.[34] During a similar period, the percentage of individuals with disabilities working in integrated settings continued to grow, from 11% in 2018 to 33% today.[35]
Recent monitoring activity conducted by MDLC further substantiates that as subminimum wage work has decreased, opportunities for competitive, integrated employment have increased. In the past year MDLC conducted monitoring visits of employment service providers that provide center-based employment at subminimum wages. As part of this effort, staff visited around 18 different agencies, most in outstate Minnesota. Staff spoke with administrators, staff, and workers with disabilities in each facility. They toured each facility in person and met one-on-one with workers.
 
Through these monitoring efforts, MDLC staff were gratified to see that usage of the subminimum wage option at employment service providers has steadily declined. Many facilities have sharply reduced their use of subminimum wage work, and some have given up their 14C certificates entirely. Staff visited several facilities where employees had growing opportunities to work in the community, at minimum wages or above, and at integrated employment sites. Some facilities had also developed opportunities for employees to work on-site at minimum wages.
 
Most facilities visited indicated that they were aware of subminimum wage work being on the verge of being terminated entirely and were making plans for this eventuality. One facility involved a program where all the subminimum wage work was done in-house as part of a thrift store operation. The thrift store is fully controlled and managed by facility staff, and during the visit and thrift store tour, facility management acknowledged that they could switch every participant earning subminimum wage work to minimum wage work without undue disruption to the business operation.
 
Our monitoring activities revealed that even as utilization of the subminimum wage declines, employment opportunities and outcomes have steadily improved for people with disabilities. Today, there are no longer any subminimum wage providers in large swaths of the State, such as Northeast Minnesota. Yet, employment opportunities in this region have only expanded.[36] This shows that the subminimum wage is no longer necessary to “prevent the curtailment of employment opportunities” for Minnesotans with disabilities.
 
Examples from other states that have ended subminimum wage are also instructive. Nearly half of states have prohibited or limited the use of subminimum wage.[37] In those States, employment opportunities have only expanded for people with disabilities. In Vermont, which ended the subminimum wage via legislation, 41% of people with disabilities work in competitive settings, far outstripping the national percentage of 24%.[38] In Oregon, which ended subminimum wage via the Lane litigation, 58% of people with disabilities work in integrated settings.[39]
The evidence suggests that when there is sufficient investment in community integration, people with disabilities do not require a subminimum wage to obtain employment. There is now sufficient evidence for the DOL to find that subminimum wages are not needed to “prevent the curtailment of opportunities for employment.”[40]
 
Conclusion
 
The DOL has statutory authority to halt the issuance of subminimum wage certificates. The DOL should exercise this authority and sustain the Proposed Rule. The subminimum wage is an outdated, discriminatory practice that must end if we are to realize the promise of an inclusive, just future for people with disabilities. Additionally, and crucially in this rulemaking, the payment of subminimum wages is no longer necessary to “prevent the curtailment of opportunities for employment.”[41] We urge the U.S. Department of Labor to exercise their authority to interpret the FLSA and phase out the issuance of 14(C) Certificates with all deliberate speed.
 
Sincerely,
 
Jenn Purrington
Deputy Director
 
Anne Robertson
Supervising Attorney
 
Jonah Giese
Legal Advocate
 
JG:SS
 
24-0222135

[1] See 29 U.S.C. §214(c)(1).
[2] As the P&A in the State of Minnesota, our office is authorized to conduct monitoring of public and private facilities that serve people with disabilities, including, but not limited to, hospitals, nursing homes, group homes, community residential facilities, board and care homes, homeless shelters, and jails and prisons. See 42 U.S.C. § 10802(3); See 42 C.F.R. § 51.2.
[3] See Minnesota Disability Law Center, Ending the Subminimum Wage in Minnesota, (2022) https://mylegalaid.org/wp-content/uploads/2024/03/Ending-the-Subminium-Wage-in-Minnesota_October-2022-sm.pdf
[4] See Task Force on Eliminating the Subminimum Wage, Legislative Report, (2023), DHS-8397-ENG (2023 DSD Legislative Report: Task Force on Eliminating Subminimum Wages)
[5] See Allan Baumgarten, Evaluation of Sheltered Employment Programs, PROGRAM EVALUATION DIV., OFF. OF THE LEGIS. AUDITOR, STATE OF MINN. (Mar. 28, 1984), https://www.lrl.mn.gov/docs/pre2003/other/840684.pdf.
[6] Id.
[7] See Fair Labor Standards Act of 1938, 29 U.S.C. § 214(c);
[8] See 29 U.S.C. §214(c)
[9] Matthew Crawford & Joshua Goodman, Below the Minimum Wage: A Critical Review of the 14(c) Wage Program for Employees with Disabilities, 30 HOFSTRA LAB. & EMP. LAW J. 591, 595 (2013), https://scholarlycommons.law.hofstra.edu/cgi/viewcontent.cgi?article=1556& context=hlelj (citing William G. Whittaker, Treatment of Workers with Disabilities Under Section 14(c) of the Fair Labor Standards Act, RL 30674, CONG. RSCH. SERV 2, 7 (Aug. 27, 2007))
[10] MINN. DEVELOPMENTAL DISABILITIES PROGRAM, DEP’T OF ENERGY, PLANNING & DEV., Policy Analysis Series: Issues Related to Welsch v. Levine/No. 16 (Apr. 19, 1983), https://mn.gov/mnddc/learning/document/GT020.PDF
[11] OFF. OF THE LEGIS. AUDITOR, STATE OF MINN., Evaluation of Sheltered Employment Programs (Mar. 28, 1984), https://www.lrl.mn.gov/docs/pre2003/other/840684.pdf.
[12] Id.
[13] Id.
[14] See Peter H. Benzian, Statement of Minnesota Public Interest Research Group before Bill of Rights Committee of Minnesota Constitutional Study Commission, MINN. PUB. INT. RSCH. GRP. (June 21, 1972)
[15] See National Council on Disability, Report on Subminimum Wage and Supported Employment (2012), https://www.ncd.gov/​report/​national-council-on-disability-report-on-subminimum-wage-and-supported-employment/​; U.S. COMM’N ON CIV. RTS., Subminimum Wages: Impacts on the Civil Rights of People with Disabilities, Sept. 17, 2020), https://www.usccr.gov/files/2020/2020-09- 17-Subminimum-Wages-Report.pdf
[16] Id.
[17] See Task Force on Eliminating the Subminimum Wage, Legislative Report, (2023), DHS-8397-ENG (2023 DSD Legislative Report: Task Force on Eliminating Subminimum Wages)
[18] See 42 U.S.C. § 12101(b)(1)
[19] See 28 C.F.R. § 35.130(d)
[20] Olmstead v. L.C., 527 U.S. 581, 593 (1999).
[21] Lane v. Kitzhaber, 841 F. Supp. 2d 1199, 1202 (D. Or. 2012); Seneca Re-Ad Industries, Inc. v. Secretary of the Department of Labor et al., 3:20-cv-02325-JJH)
[22] See Department of Justice, Questions and Answers on the Application of the ADA’s Integration Mandate and Olmstead v. L.C. to Employment and Day Services for People with Disabilities, https://www.ada.gov/resources/olmstead-employment-qa/ (Oct. 31, 2023)
[23] See StateData.info, Population Data from the American Community Survey (2025), https://www.thinkwork.org/statedata/build-a-chart?report=single
[24] See Minnesota Disability Law Center, Ending the Subminimum Wage in Minnesota, (2022) https://mylegalaid.org/wp-content/uploads/2024/03/Ending-the-Subminium-Wage-in-Minnesota_October-2022-sm.pdf
[25] MINN. DEP’T OF LAB. & INDUS., Minimum Wage in Minnesota, (January 8, 2025), https://www.dli.mn.gov/minwage.
[26] See Minnesota Disability Law Center, Ending the Subminimum Wage in Minnesota, (2022) https://mylegalaid.org/wp-content/uploads/2024/03/Ending-the-Subminium-Wage-in-Minnesota_October-2022-sm.pdf
[27] Id.
[28] 29 U.S.C. §214(c)(1). 
[29] See https://www.federalregister.gov/d/2024-27880/p-49.
[30] In Minnesota and elsewhere, funding for community, integrated employment lags far behind funding for sheltered workshops. See Minnesota Disability Law Center, Ending the Subminimum Wage in Minnesota, (2022) https://mylegalaid.org/wp-content/uploads/2024/03/Ending-the-Subminium-Wage-in-Minnesota_October-2022-sm.pdf
[31] U.S. DEP’T OF EDUC. Education Department Awards $177 Million in New Grants to Increase Competitive Integrated Employment for People with Disabilities 48 (2022), https://www.ed.gov/news/press-releases/education-departmentawards-177-million-new-grants-increase-competitive-employment-peopledisabilities.
[32] See Minnesota Transformation Institute – Institute for Community Integration, Provider Stories (2025) https://mti.ici.umn.edu/
[33] See  Minnesota Human Services Omnibus Bill (2023)
[34] See U.S. Department of Labor, 14(C) Certificate Holders. (2024), https://www.dol.gov/agencies/whd/workers-with-disabilities/section-14c/certificate-holders
[35] See StateData.info, State Snapshots: Minnesota (2025), https://www.thinkwork.org/statedata/state-snapshots
[36] See Minnesota Transformation Institute, MTI Success Stories: UDAC (2025), https://ici.umn.edu/products/4X3leaMnQRSGTLCdIFq5eA
[37] See Association of People Supporting Employment First (APSE), Employment First Map, https://apse.org/home-v2-2/employment-first/ (last visited December 16, 2024)
[38] See StateData.info, State Snapshots: Vermont(2025), https://www.thinkwork.org/statedata/state-snapshots
[39] See StateData.info, State Snapshots: Oregon (2025), https://www.thinkwork.org/statedata/state-snapshots
[40] 29 U.S.C. §214(c)(1). 
[41] See 29 U.S.C. §214(c)(1).

###