Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jennifer Riley and associate Gregory Tsonis with their discussion of a proposed rule from the U.S. Department of Labor (“DOL”), entitled “Employment of Workers With Disabilities Under Section 14(c) of the Fair Labor Standards Act,” that would put an stop to the issuance of new certificates that allow employers to pay workers with disabilities a subminimum wage.
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Episode Transcript
Jennifer Riley: Thank you for being here again for the next episode of our weekly podcast, the Class Action Weekly Wire. I’m Jennifer Riley, partner at Duane Morris, and joining me today is Greg Tsonis. Thank you for being on the podcast, Greg.
Greg Tsonis: Welcome, Jen, glad to be here.
Jennifer: So, big news this week from the U.S. Department of Labor. It has announced a major move to end the ability of employers to pay workers with disabilities below the federal minimum wage. This has been in the works for a while, though, right Greg?
Greg: Yes, it’s definitely been a long time coming. So, this rule is aiming to end the use of Section 14(c) of the Fair Labor Standards Act, the FLSA, which has allowed employers to pay workers with disabilities below the federal minimum wage way back since the 1930s, actually. So, this new proposal would stop the issuance of new certificates under that provision and existing employers with those certificates would have up to three years to phase out paying subminimum wages.
Jennifer: Right. I think a lot of people are surprised to see this move happening now, especially since it’s coming at the end of President Biden’s administration. What does the timeline look like for this rule?
Greg: Yeah, good question. So right now, the rule is in the proposed stage. So there’s a comment period that just started and runs through January 17th of next year. We’ll be hearing a lot of feedback from various stakeholders in that time. After that, the next steps will be determined, based on the comments that are received and what they say. But here’s the kicker – since it’s so close to Inauguration Day, it’s likely that the next administration will have a big role in finalizing that rule.
Jennifer: That’s right. And as we saw with some other issues under Biden’s administration, regulations like this can face challenges, especially if they come out toward the end of a presidency. But the push to end this practice has been building for a while, wouldn’t you say?
Greg: Absolutely. So, this is actually one of the farthest steps the federal government has taken to end Section 14(c). Democrats have been trying to get rid of it for years with legislation like Raise the Wage Act and the transformation to Competitive Integrated Employment Act. Both are still pending. But the platform for the Democratic party, both in 2020 and in 2024, has included a commitment to end subminimum wages for people with disabilities, and even some Republicans have backed this idea, especially in the Senate.
Jennifer: That’s true. Speaking of lawmakers, we have seen varying amounts of support. There was a pretty positive reception from some key figures in the Republican side as well as in the Democrat side. For instance, Representative Bobby Scott praised the announcement, calling it a step toward fairness. He made it clear that all workers, regardless of disability, should be treated with dignity and receive at least the minimum wage.
Greg: Exactly. He’s been an advocate for this for a long time, and his comments really emphasize the broader shift toward equality in the workforce. Democratic Senator Patty Murray also weighed in saying that paying workers with disabilities less than the minimum wage is discriminatory, and that this rule is a major step toward better economic outcomes for people with disabilities.
Jennifer: Right. But, as to be expected, there’s also pushback from some lawmakers going the other way. Republican Representative Virginia Foxx, for instance, was pretty vocal against the rule. She called it misguided and irresponsible, saying that the 14(c) program actually protects job opportunities for individuals with disabilities. She even pointed out that in states where the program was phased out, many workers ended up jobless or even isolated.
Greg: Yes, and that’s a real concern for some. Representative Foxx and others argue by eliminating 14(c), you could have unintended consequences. They believe that the program has helped individuals with disabilities gain employment in a way that would be difficult in a competitive market. Some critics are worried that this change could lead to job loss and greater social isolation for those workers who rely on these programs.
Jennifer: Right. It’s definitely a tough issue with strong opinions on both sides. But if the rule does go through, it could be a big shift in the rights and protections for people with disabilities. The government has already taken steps to end subminimum wage for federal contractors, and some states have banned it, too. So, it’s clear that momentum is building to move away from this practice.
Greg: Yeah, it’s been a major point of debate for years, and with the public comments coming in now, we’re likely to see even more perspectives emerge. There are certainly valid concerns about the potential impact on job opportunities. But at the same time, we’ve seen a shift in how workers with disabilities are treated in the broader workforce. Ending subminimum wage could create more opportunities for integration and fair pay.
Jennifer: It will definitely be interesting to see how this plays out with the comment period and potential changes from the next administration. There’s a lot of uncertainty about how quickly this rule will become a reality. But it’s definitely something to watch closely.
Greg: For sure, it’s a defining issue for both the disability rights community and the broader workforce, and whichever way it goes, it will have lasting implications for how workers with disabilities are treated in the job market. The next few months will be crucial in shaping that future.
Jennifer: Thanks, Greg, for breaking this down. It’s certainly going to be a topic that gets a lot of attention over the coming months. We will be sure to keep our listeners updated. Thanks for being here today, Greg, and thank you to everyone in the audience for tuning in.
Greg: Thanks for having me, Jen, and thank you to the listeners.