---
title: Subminimum Wages for Workers With Disabilities Are Still Legal After a Withdrawn Federal Rule
description: US employers can still pay workers with disabilities below $7.25 an hour. The Labor Department dropped its phase-out, saying the law requires the certificates.
author: Darie Nani (Editor-in-Chief)
updated: 2026-08-03T03:23:53.683Z
canonical: https://www.sovereignmagazine.com/article/subminimum-wage-certificates-still-legal-withdrawn-rule
categories: Politics
content_type: News
region: United States
publication: Sovereign Magazine
schema_type: Article
---

Employers in the United States can still pay a worker with a disability less than the federal minimum wage of $7.25 an hour, and the federal effort to end that practice has stopped. The Labor Department [withdrew its own proposal to phase out the certificates](https://www.federalregister.gov/documents/2025/07/07/2025-12534/employment-of-workers-with-disabilities-under-section-14c-of-the-fair-labor-standards-act-withdrawal) on 7 July 2025, having concluded that it lacked the legal power to do so.

The [proposal, published on 4 December 2024](https://www.federalregister.gov/documents/2024/12/04/2024-27880/employment-of-workers-with-disabilities-under-section-14c-of-the-fair-labor-standards-act), would have stopped the Wage and Hour Division issuing new certificates to any employer applying on or after the date a final rule took effect. Employers already holding one could have carried on under it for up to three more years. The Department's preliminary conclusion was that subminimum wages "are no longer necessary" to prevent the curtailment of employment opportunities for individuals with disabilities.

More than 17,000 comment submissions came back, including more than 11,000 unique ones. They arrived from workers with disabilities and their families, from disability rights advocates, from Members of Congress, from service providers, and from certificate holders and the people who work alongside them.

## The Department concluded the law obliges it to issue the certificates

Section 14(c) of the Fair Labor Standards Act, enacted in 1938, says the Secretary of Labor, "to the extent necessary to prevent curtailment of opportunities for employment, shall by regulation or order provide for the employment, under special certificates" of individuals whose earning or productive capacity is impaired by age, physical or mental deficiency, or injury, at wages lower than the minimum.

The Department read the word "shall" as binding. Section 14(d), immediately after it, says the Secretary "may" exempt certain student workers. Citing the Supreme Court's decision in Kingdomware Technologies, Inc. v. United States, the Department noted that where a statute distinguishes between may and shall, shall imposes a mandatory duty. It concluded that section 14(c) imposes a mandatory duty on the Department to provide for issuing subminimum wage certificates, and that it could not unilaterally and permanently end them.

Members of Congress had made that argument during the comment period. The Chairman and several members of the House Committee on Education and Workforce wrote to the Department on 17 January 2025 to say it had no statutory authority to stop issuing the certificates. The Department also wrote that Congress may make the policy tradeoff itself and eliminate the section 14(c) program.

## Certificate numbers have fallen every year since 2015

The program the Department could not close has been shrinking without it. In 2001 the Government Accountability Office estimated that about 424,000 workers with disabilities were paid subminimum wages while working for 5,612 employers holding certificates. By 1 May 2024 there were 801 employers with a certificate either issued or pending, a fall of nearly 86 percent, and those holding issued certificates reported paying approximately 40,579 workers at subminimum wages in their previously completed fiscal quarter. The count of pending and issued certificate holders stood at 2,820 in April 2015 and has declined every year since. Of the 801 recorded in 2024, 779 were renewals.

Community rehabilitation programs hold the vast majority of the certificates, and provide many services to individuals with disabilities beyond employment. The Department estimated that nationwide only around 4,000 individuals with disabilities other than intellectual and developmental disabilities are paid subminimum wages. In each month of the first half of 2024, more than 7 million people aged 16 and over with a disability were employed in the civilian labor force, on Bureau of Labor Statistics survey figures.

A certificate carries an effective date and an expiration date. If an employer files a renewal application properly and on time, the existing certificate stays in force and the authority to pay subminimum wages continues while the renewal is under review. Holding a live certificate is not a good faith defense if an investigation finds violations. In fiscal year 2023 the Wage and Hour Division closed 89 investigations of certificate holders, found violations in approximately 88 percent of them, and recovered more than $2 million in back wages for nearly 3,000 workers. Since 2016 it has identified violations of the separate section 511 requirements in more than 250 investigations.

## Fifteen states have already ended or begun ending the practice

Nearly one third of states have passed laws prohibiting the payment of subminimum wages to at least some workers with disabilities, or setting out a phase-out. They are Alaska, California, Colorado, Delaware, Hawaii, Maine, Maryland, Nevada, New Hampshire, Oregon, Rhode Island, South Carolina, Tennessee, Virginia and Washington. Alaska repealed the state statute that had allowed subminimum wage certificates, and since December 2022 no employer there may pay an individual with a disability less than the state minimum wage. California's Senate Bill 639, enacted in 2021, set a multi-year phaseout of the licenses that authorize a subminimum wage. Colorado's Senate Bill 21-039, enacted on 29 June 2021, was designed to phase the practice out by 2025.

The Department addressed those laws and set them aside. States that ended their own subminimum wage programs did so through state legislation, it said, and the existence of such laws does not bear on its own statutory obligations under section 14(c).

The rulemaking is closed rather than paused. The proposal was removed from further consideration, and any future change to the regulations at 29 CFR part 525 would have to begin again with a fresh proposed rule.

## FAQ

**Q: Is it legal to pay a worker with a disability less than the federal minimum wage in the United States?**
Yes. Section 14(c) of the Fair Labor Standards Act allows an employer holding a special certificate from the Labor Department's Wage and Hour Division to pay a worker whose earning or productive capacity is impaired by age, physical or mental deficiency, or injury at a wage lower than the federal minimum of $7.25 an hour. The Department's 2024 proposal to phase the certificates out was withdrawn on 7 July 2025.

**Q: What is a section 14(c) certificate?**
It is the authorisation the Wage and Hour Division issues to an employer, allowing it to pay qualifying workers with disabilities below the federal minimum wage. Each certificate has an effective date and an expiration date. If a renewal application is filed properly and on time, the existing certificate remains in effect and the authority to pay subminimum wages continues while the renewal is reviewed. Holding one is not a good faith defense if an investigation finds violations.

**Q: How many workers are paid subminimum wages under section 14(c)?**
As of 1 May 2024, employers holding issued certificates reported paying approximately 40,579 workers at subminimum wages in their previously completed fiscal quarter. That compares with an estimated 424,000 workers in 2001. The Department estimated that nationwide only around 4,000 individuals with disabilities other than intellectual and developmental disabilities are paid subminimum wages.

**Q: Which states have ended subminimum wages for workers with disabilities?**
Alaska, California, Colorado, Delaware, Hawaii, Maine, Maryland, Nevada, New Hampshire, Oregon, Rhode Island, South Carolina, Tennessee, Virginia and Washington have all passed legislation or executive orders prohibiting, or phasing out, the payment of subminimum wages to at least some workers with disabilities. That is nearly one third of states.