Employment of Workers With Disabilities Under Section 14(c) of the Fair Labor Standards Act

DEPARTMENT OF LABOR <SUBAGY>Wage and Hour Division</SUBAGY> <CFR>29 CFR Part 525</CFR> <RIN>RIN 1235-AA14</RIN> <SUBJECT>Employment of Workers With Disabilities Under Section 14(c) of the Fair Labor Standards Act</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Wage and Hour Division, Department of Labor. <HD SOURCE="HED">ACTION:</HD> Notice of proposed rulemaking. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Fair Labor Standards Act (FLSA or Act) authorizes the Secretary of Labor to issue certificates allowing employers to pay productivity-based subminimum wages to workers with disabilities, but only where such certificates are necessary to prevent the curtailment of opportunities for employment. Employment opportunities for individuals with disabilities have vastly expanded in recent decades, in part due to significant legal and policy developments. Based on that evidence, the Department has tentatively concluded that subminimum wages are no longer necessary to prevent the curtailment of employment opportunities for individuals with disabilities and thus proposes to phase out the issuance of section 14(c) certificates. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> Interested persons are invited to submit written comments on this notice of proposed rulemaking (NPRM) on or before January 17, 2025. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> You may submit comments, identified by Regulatory Information Number (RIN) 1235-AA14, by either of the following methods: • <E T="03">Electronic Comments:</E> Submit comments through the Federal eRulemaking Portal at <E T="03">https://www.regulations.gov.</E> Follow the instructions for submitting comments. • <E T="03">Mail:</E> Address written submissions to: Division of Regulations, Legislation, and Interpretation, Wage and Hour Division, U.S. Department of Labor, Room S-3502, 200 Constitution Avenue NW, Washington, DC 20210. <E T="03">Instructions:</E> Response to this NPRM is voluntary. The Department requests that no business proprietary information, copyrighted information, or personally identifiable information be submitted in response to this NPRM. Commenters submitting file attachments on <E T="03">https://www.regulations.gov</E> are advised that uploading text-recognized documents— <E T="03">i.e.,</E> documents in a native file format or documents which have undergone optical character recognition (OCR)—enable staff at the Department to more easily search and retrieve specific content included in your comment for consideration. Anyone who submits a comment (including duplicate comments) should understand and expect that the comment, including any personal information provided, will become a matter of public record and will be posted without change to <E T="03">https://www.regulations.gov.</E> The Department posts comments gathered and submitted by a third-party organization as a group under a single document ID number on <E T="03">https://www.regulations.gov.</E> All comments must be received by 11:59 p.m. ET on January 17, 2025, for consideration in this rulemaking; comments received after the comment period closes will not be considered. The Department recommends that commenters submit their comments electronically via <E T="03">https://www.regulations.gov</E> to ensure timely receipt prior to the close of the comment period. Please submit only one copy of your comments by only one method. <E T="03">Docket:</E> For access to the docket to read background documents or comments, go to the Federal eRulemaking Portal at <E T="03">https://www.regulations.gov.</E> In accordance with 5 U.S.C. 553(b)(4), a summary of this rule may also be found at <E T="03">https://www.regulations.gov.</E> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Daniel Navarrete, Director, Division of Regulations, Legislation, and Interpretation, Wage and Hour Division (WHD), U.S. Department of Labor, Room S-3502, 200 Constitution Avenue NW, Washington, DC 20210; telephone: (202) 693-0406 (this is not a toll-free number). Alternative formats are available upon request by calling 1-866-487-9243. If you are deaf, hard of hearing, or have a speech disability, please dial 7-1-1 to access telecommunications relay services. Questions of interpretation or enforcement of the agency's existing regulations may be directed to the nearest WHD district office. Locate the nearest office by calling the WHD's toll-free help line at (866) 4US-WAGE ((866) 487-9243) between 8 a.m. and 5 p.m. in your local time zone, or log onto WHD's website at <E T="03">https://www.dol.gov/agencies/whd/contact/local-offices</E> for a nationwide listing of WHD district and area offices. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Executive Summary</HD> The FLSA generally requires that employees be paid at least the Federal minimum wage, currently $7.25 per hour, for every hour worked and at least one and one-half times their regular rate of pay for each hour worked over 40 in a single workweek. 29 U.S.C. 206(a), 207(a). Since its enactment in 1938 through today, section 14 of the FLSA has included a provision authorizing the Department to issue certificates permitting employers to pay workers at wage rates below the Federal minimum wage when the worker's disabilities impair their earning or productive capacity. The section 14 statutory provision, however, has always provided that such certificates may only be issued to the extent “necessary to prevent curtailment of opportunities for employment.”  <SU>1</SU> <FTREF/> As the Supreme Court explained in 1947, the language and legislative history of the section show that its purpose is to prevent the imposition of a full minimum wage from depriving those with “physical handicaps” of “all opportunity to secure work.”  <SU>2</SU> <FTREF/> However, as the Court emphasized, “to have written a blanket exemption of all [such workers] from the Act's provisions might have left open a way for wholesale evasions. Flexibility of wage rates for them was therefore provided under the safeguard of administrative permits.”  <SU>3</SU> <FTREF/> Hence, section 14(c) authorizes the Secretary to issue certificates allowing payment of subminimum wages to individuals with disabilities only when conditions make it “necessary” to do so. <FTNT> <SU>1</SU>  29 U.S.C. 214(c)(1). </FTNT> <FTNT> <SU>2</SU>   <E T="03">Walling</E> v. <E T="03">Portland Terminal Co.,</E> 330 U.S. 148, 151 (1947). The Department notes that some terminology used in this NPRM reflects the terms used in the statute and regulations at the time of their issuance or quotations from various sources. Quotations are attributable to the sources indicated and do not necessarily reflect the current views or terminology of the Department. Since the early 1990s, the government has replaced outdated and offensive terms like “the handicapped” with more respectful, person-first terminology, such as “individuals with disabilities.” Throughout this NPRM, the Department references outdated terms only when necessary to accurately reflect quoted sources or to illustrate changes that have occurred. </FTNT> <FTNT> <SU>3</SU>   <E T="03">Id.</E> </FTNT> The Department first promulgated regulations governing the issuance of these “administrative permits” in 1938, and last substantively updated them in 1989, more than 35 years ago. Since 1989 (and profoundly more so since the time the statutory provision was enacted and its implementing regulations were promulgated nearly 85 years ago), opportunities for employment have dramatically changed for individuals with disabilities. Fueled by the disability rights movement, societal and cultural assumptions, beliefs and expectations regarding the employment of individuals with disabilities have evolved, and opportunities for individuals with disabilities have dramatically expanded. Federal legislation and judicial precedent have established and enshrined fundamental legal protections requiring equal access, opportunities, and respect for individuals with disabilities in both education and employment. Of these legislative and judicial developments, the landmark Americans with Disabilities Act (ADA) of 1990, <SU>4</SU> <FTREF/> enacted the year after the section 14(c) regulations were last substantively updated, has had a profound impact on employment opportunities for individuals with disabilities. In addition, the President and executive agencies have taken steps to end the payment of subminimum wages to workers with disabilities on certain government contracts. Numerous States and localities have prohibited or limited the payment of subminimum wages to workers with disabilities within their jurisdictions. In short, employment opportunities for individuals with disabilities have advanced significantly since the FLSA's enactment in 1938, when it was much more difficult for individuals with disabilities to secure employment at the full minimum wage. <SU>5</SU> <FTREF/> <FTNT> <SU>4</SU>  The ADA was subsequently amended by the ADA Amendments Act of 2008, 42 U.S.C. 12111 <E T="03">et seq.</E> As discussed in section III.B, the ADA mandates equal employment opportunity for individuals with disabilities by prohibiting discrimination and requiring reasonable accommodation. </FTNT> <FTNT> <SU>5</SU>   <E T="03">Id.</E> </FTNT> Although it is widely acknowledged that individuals with disabilities continue to face challenges in obtaining equal opportunity and treatment, the extent of legal protections, opportunities, resources, training, technological advancements, and supports has dramatically expanded since 1989, when the Department's regulation was last substantively updated, to assist individuals with disabilities both in obtaining and maintaining employment at or above the full min ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 381k characters. 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