Sub-Minimum Wage for Workers with Disabilities Ends: Full Minimum Wage Mandated Within Four Years

The Transformation to Competitive Integrated Employment Act is setting a hard deadline to end a decades-old practice: paying people with disabilities less than the standard minimum wage. This bill targets the use of special certificates under Section 14(c) of the Fair Labor Standards Act, which currently allows certain employers to pay what’s known as a sub-minimum wage. The core message is clear: within four years, every worker with a disability must earn at least the full minimum wage, and the authority to issue these special certificates will disappear completely (Sec. 202).

The Four-Year Wage Hike

For workers currently earning less than minimum wage under these certificates, the law mandates an immediate and staggered pay increase starting three months after the Act becomes law (Sec. 201). This isn't a slow crawl; it’s a mandated sprint to parity. Workers must immediately be paid at least 60% of the standard minimum wage. This jumps to 70% after one year, 80% after two years, and 90% after three years. By the end of the fourth year, every covered worker must be earning the full standard minimum wage. This provision is a game-changer for economic equity, ensuring that a person’s disability status no longer dictates their earning potential.

The Business Model Overhaul: Grants and Accountability

Ending the sub-minimum wage means employers—often large nonprofits or sheltered workshops—must completely revamp their business models. The bill doesn't leave them hanging; it provides significant financial support through two major grant programs (Title I).

First, there’s the State Grant Program (Sec. 102), offering between $2 million and $10 million over five years to states that commit to ending the use of these certificates. To get the money, states have to provide a detailed plan, including a timeline for phasing out the certificates, and promise that every affected worker will transition into "competitive integrated employment"—meaning a regular job in a regular setting, earning market wages (Sec. 102).

Second, there’s the Certificate Holder Grant Program (Sec. 103), offering up to $500,000 over three years directly to organizations that currently use the certificates but want to transition. Think of this as seed money for a massive business transformation. They need to detail their current sub-minimum wage practices, report on past transition successes, and lay out a clear plan for the new business model, including how they will coordinate with state agencies like Medicaid and Vocational Rehabilitation.

What “Integrated” Means for Everyday Life

The goal isn't just a higher paycheck; it's full community participation. The bill defines integrated services (Sec. 501) as support that helps people with disabilities live successfully in their homes and communities. Crucially, these services must be provided in regular community settings, allowing interaction with people without disabilities, and not in restrictive institutional environments. This shift is designed to ensure that as workers move to competitive jobs, they also gain access to the services they need to thrive outside of work, following the principles of the Olmstead Supreme Court decision.

The Hard Reality for Employers Who Don't Adapt

While the bill offers grants and a four-year runway, it’s a mandate, not a suggestion. If an employer currently uses a special certificate and chooses not to transition—or fails to secure grant funding to manage the change—they will still be required to pay the full minimum wage after four years. For organizations built entirely on a sub-minimum wage model, this could mean significant disruption, or even closure, if they can't adapt their contracts and business structure to the new cost of labor. The bill requires extensive reporting and evaluation (Title IV) to track wages, hours, and transition success, ensuring accountability for the $50 million authorized annually for this effort (Sec. 502).