Sub-Minimum Wage Ends: New Law Mandates Full Pay for Workers with Disabilities by 2031

The new Transformation to Competitive Integrated Employment Act is setting a five-year clock to end a decades-old practice that allowed employers to pay people with disabilities less than the federal minimum wage. This bill mandates a complete phase-out of the special certificates (known as 14(c) certificates) that allowed sub-minimum wages, prohibiting the issuance of any new certificates immediately and voiding all existing ones five years after the bill is enacted. The core purpose is to move every worker currently paid sub-minimum wages into "competitive integrated employment"—meaning a regular job in a regular workplace at a regular wage.

The Five-Year Pay Raise Countdown

For workers currently under a 14(c) certificate, this legislation is a game-changer for their paycheck. The bill sets a clear schedule for wage increases, ensuring that by the fifth year after enactment, they are earning the full federal minimum wage. The phase-in starts 90 days after the bill becomes law, with the minimum pay rate jumping to 60% of the standard minimum wage, then climbing incrementally to 70%, 80%, and 90% in subsequent years before hitting 100% in year five (Sec. 201). This means if you or someone you know is in this situation, they have a guaranteed, scheduled pay raise coming that brings them up to parity with other workers.

The $200 Million Transformation Fund

Ending sub-minimum wage isn't just about changing a law; it's about changing entire business models. That’s why the bill authorizes $200 million annually for five years (FY 2026-2030) to fund the transition. This money is split into two major grant programs. States can apply for large grants (between $3 million and $15 million) to build the infrastructure needed to support this shift, including coordinating services across vocational rehab, Medicaid, and workforce development agencies (Sec. 102).

Separately, the employers who currently hold 14(c) certificates can apply for smaller grants (between $200,000 and $750,000) to fundamentally change how they operate (Sec. 103). To get this money, these employers must commit to paying all employees at least the higher of the federal or local minimum wage and matching the pay of non-disabled employees doing similar work. They also have to detail exactly how they will transition their workers into competitive jobs, either within their transforming business or with other employers.

What Does 'Integrated' Really Mean?

This law heavily emphasizes "integrated services"—meaning support services must be provided in regular community settings, not segregated facilities. The bill is explicit: these services must comply with complex existing rules, like the Department of Health and Human Services’ Home and Community-Based Services (HCBS) rules and the Olmstead Supreme Court decision (Sec. 501). For busy families, this means that the support systems—like job coaching or daily living assistance—are supposed to be designed to help the individual function independently in the community, not just within a specialized work environment.

However, this reliance on existing, complex rules (like HCBS Waivers) is where the rubber meets the road. While the intent is excellent, the definition of these services is dense and relies on compliance with other federal regulations, which can lead to different interpretations and inconsistent delivery across states. For a worker transitioning, the quality of their new support services will depend heavily on how robustly their state implements these complex federal requirements.

Accountability and Oversight

If you’re wondering how we’ll know if this is working, the bill includes mandatory, detailed reporting. The Secretary of Labor must hire an outside group to conduct a multi-year study on the impact of the Act, looking at changes in wages, job satisfaction, and employment status (Sec. 401). Furthermore, for the next five years, the Secretary must send annual reports to Congress detailing the wages, hours, and demographics of workers still under the old certificates, and must audit at least 10% of current certificate holders to ensure they are making good faith efforts to transition workers (Sec. 402). This level of required transparency means that states and employers taking the grant money will be under constant scrutiny to deliver on their promise of full wages and integrated employment.