By Darius Spearman (africanelements)

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The concept of a fair day of work for a fair day of pay has long been a foundational pillar of the American labor movement. Yet, a glaring exception to standard labor protections remains written into the federal legal code. Under Section 14(c) of the Fair Labor Standards Act of 1938, employers can legally pay certain individuals with disabilities wages that amount to pennies on the dollar (dol.gov, gao.gov). This policy, born during the Great Depression, is now the target of a coordinated campaign led by civil rights organizations, labor groups, and disability advocates (nacdd.org).

Historically, the subminimum wage was defended as a benevolent, therapeutic tool designed to help disabled individuals find a sense of routine and community (youtube.com). Today, however, leading groups such as the National Association of Councils on Developmental Disabilities and the Autistic Self Advocacy Network are demanding an end to this structure (autisticadvocacy.org, nacdd.org). They argue that paying workers with disabilities less than the minimum wage is a form of legalized economic segregation. By exploring the history of this policy, it becomes clear how systemic inequality has been preserved under the guise of charity.

To understand the modern pushback against subminimum wage structures, one must return to the signing of the Fair Labor Standards Act in 1938 (govinfo.gov). When President Franklin D. Roosevelt signed this historic legislation, it established the first federal minimum wage and created overtime guidelines (tcf.org). However, the law was drafted in an era when disability was viewed strictly through a medical and charitable lens rather than a civil rights framework. Section 14(c) was included to encourage the employment of individuals whose productive capacity was deemed impaired, particularly injured veterans returning from World War I (cornell.edu, tcf.org).

At the same time, the original Fair Labor Standards Act contained structural exclusions that mirrored the racial and social hierarchies of the Jim Crow era (dokumen.pub). To secure the votes of Southern segregationist legislators, the law deliberately excluded agricultural and domestic workers from its wage protections (dokumen.pub). These two sectors were predominantly staffed by Black workers, meaning the law preserved racial economic subjugation by design (dokumen.pub). Historically, civil rights organizations fought fiercely against these exclusions, recognizing that they institutionalized poverty for Black families (dokumen.pub). Within this broader context, the creation of Section 14(c) functioned as a parallel legal loophole that denied basic economic standards to another vulnerable population (americanprogress.org).

By comparing these historical policies, it becomes clear that both sectoral exclusions and disability exemptions operated as legal mechanisms to institutionalize wage disparities (dokumen.pub, americanprogress.org). Over the decades, as Black workers fought for economic justice and successfully dismantled many agricultural exclusions, the disability subminimum wage remained largely intact. This historical parallel highlights how legal carve-outs have repeatedly been utilized to deny marginalized groups the right to equal pay.

Under Section 14(c), employers who hold special certificates are permitted to pay what the law calls commensurate wages (dol.gov). A commensurate wage is a subminimum wage based on the individual productivity of a disabled worker compared to the productivity of a non-disabled worker performing the same task (dol.gov). Rather than paying a fixed hourly minimum, employers measure individual output and adjust pay as a direct percentage of standard wages (dol.gov, gao.gov).

This individual productivity is measured through standardized, timed assessments commonly referred to as time studies (dol.gov). During these assessments, a worker is timed while performing repetitive tasks, such as folding, packaging, or sorting. Because their wages are calculated as a strict percentage of the prevailing wage based on these studies, some workers are legally paid as little as 25 cents per hour (gao.gov). Furthermore, the regulatory system suffers from a lack of rigorous public oversight. The Wage and Hour Division of the Department of Labor routinely issues these certificates as a matter of course, without requiring on-site investigations to verify if the subminimum wage is appropriate or fair (gao.gov).

How legislative amendments systematically stripped away the wage safety net for workers with disabilities.

Section 14(c) establishes a wage floor of 75% of the federal minimum wage to protect workers.

Lobbying from employers successfully pushes Congress to lower the wage floor to 50% of the federal minimum wage.

Amendments completely remove the wage floor. Wages are now based entirely on productivity with no minimum limit.

When Section 14(c) was first enacted, it contained a built-in safety net that mandated a wage floor of 75 percent of the federal minimum wage (tcf.org). Over the decades, intense lobbying from employers and vocational training organizations chipped away at this floor, reducing it to 50 percent in 1966 (tcf.org). By 1986, amendments to the law completely eliminated the wage floor (tcf.org). This deregulation opened the door for employers to transition workers into segregated environments, commonly known as sheltered workshops, where individuals with disabilities perform repetitive labor in isolation from the general public (youtube.com, tcf.org).

Historically, the administrative tracking of the subminimum wage system has been colorblind. The Wage and Hour Division does not ask for data regarding race, ethnicity, or sex on the application forms for 14(c) certificates (gao.gov). Consequently, this lack of tracking has created a critical gap in public knowledge regarding how racial disparities manifest within this exploitative system. To address this data gap, the Government Accountability Office conducted a survey of community rehabilitation program employers in 2023 (gao.gov).

The results of the 2023 survey provided the first formal demographic estimates of the 14(c) workforce (gao.gov). The survey revealed that approximately 77 percent of workers are White, 14 percent are Black or African American, 5 percent are Hispanic or Latino, 1 percent are Asian, and 1 percent are Native American or Alaska Native (gao.gov). Although White individuals constitute the numerical majority of those working under 14(c) certificates, workers of color face compounding systemic disparities within the broader labor market (tcf.org, nationalpartnership.org).

Estimated racial breakdown of subminimum-wage workers based on federal data.

When analyzing broader labor trends, Black and Hispanic disabled workers earn median wages that are just over two-thirds of the earnings of a White worker without a disability (tcf.org). Furthermore, geographic research shows that states and regions with higher levels of implicit racial and disability bias tend to segregate more people with developmental disabilities and pay more workers subminimum wages under 14(c) certificates (indiana.edu). Consequently, the intersections of racism and ableism compound to keep disabled workers of color at the very bottom of the economic ladder.

The challenges of the subminimum wage system extend beyond the walls of sheltered workshops. When states attempt to phase out 14(c) certificates, serious disparities emerge regarding who successfully transitions into standard community employment (umn.edu). Black workers with disabilities face compounding systemic barriers of racism and ableism, leading to the lowest employment-to-population ratio of any demographic group (umn.edu).

Data from the Rehabilitation Services Administration show that transition success rates, average annual earnings, and successful rehabilitation outcomes are consistently lower for Black workers with disabilities than for their White peers (researchgate.net). Historically, less than 5 percent of overall disabled workers in sheltered workshops successfully transition into competitive, community-integrated jobs, and this rate is even lower for marginalized workers of color who face hiring discrimination (mathematica.org, worksupport.com). Transition disparities are heavily driven by labor market discrimination, job segregation, and unequal regional funding or access to quality, customized job development services in underserved communities (umn.edu).

A skewed distribution of Black and Latino adults in lower-paying manual and service occupations further limits their placement in high-quality transition pathways that lead to standard, living-wage employment (iwpr.org). Consequently, when sheltered workshops close, workers of color are often left with fewer options. Instead of finding competitive employment, many are funneled into Medicaid-funded day programs that focus on social skills rather than paid labor (gao.gov). This outcome risks replacing one form of isolation with another, keeping vulnerable workers in a state of dependency and potential involuntary servitude.

To replace the exploitative subminimum wage model, disability and labor advocates champion a standard known as Competitive Integrated Employment (apse.org). Competitive Integrated Employment is a labor model where individuals with disabilities work alongside non-disabled colleagues and customers in the general community (apse.org). Unlike segregated sheltered workshops, this model prioritizes wage equity, standard employee benefits, and direct community integration (aaidd.org).

Under this model, employees with disabilities must be paid the same wages and receive the same benefits as their non-disabled peers performing the exact same work (aaidd.org). In practice, achieving this integration requires a network of individualized supportive services funded by state vocational rehabilitation systems (aoddisabilityemploymenttacenter.com). Key services include personalized job coaching, person-centered job development, customized employment, and technical assistance for employers to adapt their workplaces (aoddisabilityemploymenttacenter.com).

Furthermore, federal mandates such as the Workforce Innovation and Opportunity Act, alongside state-level "Employment First" laws, legally require vocational systems to prioritize Competitive Integrated Employment as the default, preferred outcome for disabled individuals (apse.org). Transition-to-work programs, such as Project SEARCH, achieve this by immersing individuals in real-world business settings, offering intensive classroom instruction, career exploration, and hands-on job training (iu.edu). By focusing on individual strengths rather than perceived impairments, these programs demonstrate that workers with severe disabilities can thrive in standard community jobs when provided with the proper support.

The pushback against subminimum wage structures is not limited to the disability community. Civil rights and labor advocates increasingly connect Section 14(c) to other legally sanctioned subminimum wage systems, most notably carceral labor (washingtoninformer.com, amsterdamnews.com). When the 13th Amendment of the U.S. Constitution abolished slavery and involuntary servitude, it included a crucial loophole: "except as a punishment for crime" (washingtoninformer.com).

This constitutional loophole legally permits prison systems and private corporations to subject incarcerated individuals to unpaid or hyper-exploitative labor (washingtoninformer.com). Incarcerated workers are routinely paid extremely low wages, often as little as $1 per hour, for performing intensive labor under hazardous conditions (washingtoninformer.com). Advocates view this carceral wage system as a direct extension of post-Emancipation policies, such as convict leasing, which targeted newly freed Black people to force them back into unpaid labor (washingtoninformer.com). Because systemic bias in the criminal justice system leads to the disproportionate arrest and sentencing of Black men, this demographic is disproportionately subjected to this modern form of forced labor (washingtoninformer.com).

Consequently, civil rights groups argue that the 13th Amendment loophole and Section 14(c) are cut from the same cloth (amsterdamnews.com). Both systems utilize legal exemptions to deny standard labor protections and minimum wage guarantees to marginalized populations. Recognizing these deep historical connections, organizations within the broader labor movement explicitly target carceral subminimum wages alongside tipped and disability subminimum wages in their fight for economic equity (amsterdamnews.com). This coordinated effort seeks to dismantle all tiered wage structures that permit the exploitation of vulnerable workers.

By connecting these struggles, advocates have highlighted how the rise of mass incarceration and the preservation of subminimum wages are deeply intertwined. Both systems rely on a legal framework that devalues the labor of specific populations. Consequently, true economic justice requires a comprehensive approach that closes every loophole in the law.

The struggle to end subminimum wage disparities is heavily amplified by broader campaigns such as "Living Wage for All" and "Equal Pay Today" (equalrights.org, naacp.org). These campaigns focus on the tipped subminimum wage, youth wages, and carceral labor, all of which are deeply connected to the historic exploitation of the Black community (equalrights.org, amsterdamnews.com). The tipped subminimum wage, which remains locked at a federal level of $2.13 per hour, is a direct legacy of slavery (epi.org).

Following Emancipation, newly freed Black workers were funneled into service roles, such as railroad porters and restaurant staff, where employers were not required to pay them a standard wage (epi.org). Instead, these workers were forced to rely entirely on tips from customers, which institutionalized a system of economic servitude (epi.org). Today, Black and Brown workers, particularly women, are disproportionately overrepresented in these low-wage, tip-dependent service sectors (iwpr.org). Furthermore, studies show that customer-side racial bias results in Black workers receiving lower tips than White workers on average, systematically compounding racial wage gaps (americanprogress.org).

To combat this, the NAACP has formally partnered with coalitions like One Fair Wage to support the "Living Wage for All Act" (naacp.org). This proposed legislation seeks to raise the federal minimum wage to $25 and eliminate all subminimum wages, with no exceptions for tipped workers, youth, or disabled individuals (naacp.org). The NAACP and other civil rights leaders argue that subminimum wage exemptions communicate a damaging message to vulnerable workers that they are not worthy of standard protections (naacp.org). By fighting to eliminate these tiered wage codes, these campaigns aim to lift millions of Black and Brown families out of poverty and close persistent racial earnings gaps.

While advocates have successfully pushed the issue of wage disparity into the national spotlight, the federal regulatory approach to Section 14(c) has faced sharp political shifts (fisherphillips.com). Under the Biden-Harris administration, the Department of Labor initiated a comprehensive review and issued a Notice of Proposed Rulemaking to phase out subminimum wage certificates (fisherphillips.com). However, in July 2025, the Department of Labor under the Trump administration withdrew this proposed rule (fisherphillips.com). The agency cited a lack of statutory authority to unilaterally dismantle a program created by Congress, alongside concerns from some caregivers that eliminating 14(c) would reduce work opportunities for individuals with severe cognitive disabilities (fisherphillips.com).

This regulatory reversal has driven advocates to redouble their efforts on a legislative and state-by-state level (centerforpublicrep.org, senate.gov). On the federal stage, civil rights and labor organizations are championing the Transformation to Competitive Integrated Employment Act (senate.gov). Reintroduced with bipartisan, bicameral support, the bill is sponsored by Senators Chris Van Hollen and Steve Daines, alongside Representative Bobby Scott (senate.gov). The bill proposes a structured, six-year national phase-out of Section 14(c) certificates while providing critical transition grants to help employers shift from segregated sheltered workshops to competitive, integrated business models (senate.gov).

Simultaneously, states are increasingly taking matters into their own hands (centerforpublicrep.org). By 2025, over 16 states—including California, Colorado, Oregon, Maryland, and Washington—had enacted laws banning or phasing out the subminimum wage for workers with disabilities (centerforpublicrep.org, gao.gov). For example, Virginia’s transition law now requires all workers previously paid subminimum wages to receive wages equivalent to standard employees (centerforpublicrep.org). In Georgia, the state's Dignity and Pay Act requires employers utilizing 14(c) certificates to pay workers at least half of the federal minimum wage, transitioning to a complete prohibition of subminimum wages (davisvanguard.org). These state-level victories demonstrate that the momentum to end legal wage exploitation is growing, paving the way for a more equitable future for all workers.

A side-by-side comparison showing the rapid decline of active certificates and subminimum-wage employees.

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Darius Spearman is a professor of Black Studies at San Diego City College, where he has been teaching for over 20 years. He is the founder of African Elements, a media platform dedicated to providing educational resources on the history and culture of the African diaspora. Through his work, Spearman aims to empower and educate by bringing historical context to contemporary issues affecting the Black community.