The news that the Obama Administration was planning to demand a minimum wage of $10.10/hour for federal contractors was greeted with excitement by numerous labor rights groups, but not everyone was entirely pleased with the proposal. Obama’s plan initially left out disabled employees of federal contractors, a noticeable absence, especially given how hard the administration had pushed in recent years to improve hiring rates for disabled people. Disability groups pressured Obama to reconsider and take a second look at the issue.
The problem ran deeper than simply whether disabled employees of federal contractors should make the federal minimum wage or minimum wage in their state (whichever is higher) versus $10.10/hour. Disabled employees are subject to a little-known clause of the Fair Labor Standards Act which allows employers to use a different payscale for them, based on a judgment of “productivity” rather than minimum wage laws. This frequently results in earning a subminimum wage, often several dollars an hour or in some cases mere pennies, as it the case with Goodwill employees who have been paid as little as 22 cents an hour.
How does the government justify subminimum wage? It argues that disabled workers may be less productive than nondisabled workers, and that employers should be able to pay them on a percentage basis; if a disabled employee can only do half the work of a nondisabled worker, she should be paid half as much. The 14(c) exemption, as it’s called, is sometimes defended on the grounds that it also promotes employment for disabled people by making it easier for employers to make hires.
What it actually enables is exploitation, with workers earning far less than minimum wage while employers profit. Disability rights organizations have been fighting the subminimum wage (waiters are also subject to special exemptions under labor law, as are certain classes of computer programmers) for decades, on the grounds that it’s dehumanising, exploitative, and offensive. It effectively argues that disabled people should be discriminated against in the workplace and on payday, and reflects an older, outdated, charity-based model of disability services and approaches to disability in society.
Secretary of Labor Tom Perez appears to be rethinking his stance on the issue, along with the rest of the Obama Administration, perhaps after much pressure from disability rights groups. Previously, the Administration claimed its hands were tied and that an act of Congress would be required to eliminate the 14(c) exemption, but the Labor Department is reassessing its legal options. It may find that it’s possible to ensure that all federal contractors are required to pay the same minimum wage to all employees, regardless of disability status, which is just as it should be.
If disability groups are successful in winning this key victory, it could be a starting point for taking down the 14(c) exemption once and for all by putting pressure on Congress to rethink the FLSA. It’s time for everyone — waiters, disabled people, coders, and all — to be guaranteed the same minimum wage from sea to shining sea.
Photo credit: Alden Chadwick.