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It’s time to end the law that lets businesses pay less to people with disabilities

In 2020, businesses can still legally pay their employees with disabilities less than the federal minimum wage—we need to put an end to this. 

It’s time to end the law that lets businesses pay less to people with disabilities
[Photo: jesadaphorn]

The continued struggles of women, minorities, and individuals with disabilities to achieve equality in the workplace are partly the result of societal and cultural forces, but they differ in at least one key respect: The law explicitly enables employers to pay workers with disabilities less than the federal minimum wage of $7.25. In other words, under the law, individuals with disabilities may earn less than their colleagues who are not disabled due to a trait they cannot change.

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This is the result of a section within the Fair Labor Standards Act dating back to 1938. While this landmark law had a profound impact on America’s economic, workforce, and social development by creating a federal minimum wage, establishing overtime pay, and prohibiting oppressive child labor, it proved discriminatory toward people with disabilities. By creating a subminimum wage for workers who were at the time seen as “substandard” given their perceived productivity levels, the Fair Labor Standards Act failed to protect individuals who use wheelchairs, are blind or deaf, or have cerebral palsy, autism, or certain other physical or mental health impairments.

In effect, the Fair Labor Standards Act granted employers the right to use discriminatory pay practices when it comes to workers with disabilities upon receipt of a certificate from the Department of Labor. To receive this certificate, employers simply provide the Department of Labor with a few basic pieces of information such as government contracts held, an hourly wage survey of workers with disabilities, and details about the workers intended to be paid a subminimum wage—including identifying the primary disability deemed to affect job productivity and assigning these individuals a job productivity rating.

As of January 1, 2020, more than 1,200 employers nationwide are certified to employ more than 300,000 workers with disabilities in subminimum wage jobs. This is the case despite the passage of the Americans with Disabilities Act 30 years ago, which specifically prohibits discrimination against people with disabilities. It also continues despite the passage of the Workforce Innovation and Opportunity Act of 2014, which requires employers, as part of the Department of Labor certificate application process, to submit verified documentation that the workers they plan to pay a subminimum wage have received counseling, information, and referrals concerning employment-related services and training opportunities.

The bottom line is that even in 2020—more than 80 years after the Fair Labor Standards Act went into effect—the U.S. still permits businesses to treat certain individuals with disabilities as if they have minimal skills or aptitude for work. Indeed, there are recorded instances of employers paying almost barbaric wages: as little as $1 per hour, or less, if those with physical or mental disabilities cannot work at the same speed or efficiency as colleagues who do not have a disability.

These unfair and discriminatory practices must end, and businesses need to lead the way. As the movement for greater equality for women and minorities in our workplaces and society moves forward, we cannot leave behind those with disabilities, who in the U.S. make up an estimated 26% of the population. The stakes for these individuals, especially in the midst of a global pandemic, are simply too high, and the discrepancies in opportunity compared to their peers without disabilities are too stark.

For working-age adults, those with disabilities have recently endured unemployment rates more than double that of the rest of the population. In 2018, an analysis showed that only four in 10 of these working-age individuals had jobs. When taking into account the educational qualifications of those with disabilities, the numbers are even more abysmal. Working-age adults with a disability and a college degree have an employment rate that is 10% lower than all adults with a high school diploma and 27% lower than those with a college degree.

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The COVID-19 pandemic and its economic consequences only appear to be deepening these divides. According to the Bureau of Labor Statistics’ May Jobs Report, the number of employed, working-age adults with disabilities fell by 20% between March and April. In this same time frame, the number of employed, working-age adults without disabilities fell by 14%.

While we have made meaningful strides in creating a more equitable and inclusive society for people with disabilities, particularly following the passage of the Americans with Disabilities Act, businesses must recognize that “inclusion for all” will not be achieved unless they are willing to make structural changes that benefit their employees with disabilities. Committing to paying their employees with disabilities the federal minimum wage or above is the baseline, but it is not nearly enough.

Businesses must take a serious look inward, ideally with the guidance of the wider community of people with disabilities, to ensure that their workplaces are fully inclusive, accessibility resources and necessary accommodations are readily available, and any shortcomings are identified and addressed. Moreover, disability inclusion, which is often left out of diversity and inclusion conversations, must be central to business leadership agendas. When business leaders fully grasp the value of their employees with disabilities and seek to cultivate inclusive work environments that allow for their best performance, opportunities to change societal perceptions of people with disabilities and improve conditions in local communities will become apparent as well.

It is also important to note that in January 2019, U.S. Senator Bob Casey of Pennsylvania and Rep. Bobby Scott of Virginia introduced the Transformation to Competitive Employment Act that would phase in provisions over six years to achieve pay parity for working-age adults with disabilities. Unfortunately, to date this bill has not passed into law.

Beyond businesses paying their employees with disabilities fair wages and cultivating workplaces that are inclusive of them, there now exists a real opportunity to come together to push for the passage of legislation that eliminates the subminimum wage. These steps are crucial and intertwined. To build on the change ushered in by the Americans with Disabilities Act 30 years ago and continue to strive for an inclusive future that benefits us all, we must tackle this inequity faced by individuals with disabilities that lies so clearly before us.


Jessica Roos is the chief auditor and disability affinity co-lead at Citi, and Caroline Casey is the founder of the Valuable 500.

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