Ongoing Change

The subminimum wage, also known as section 14(c) of the Fair Labor Standards Act, was established by Congress in 1938 as a rate of compensation that allows employers to pay people with disabilities as little as pennies per hour. What was originally lauded as a revolutionary policy promoting employment for disabled people is today a prop for continued discrimination.

On February 14th, New America published a report ranking states on their use or elimination of subminimum wage, as well as state programs aimed at supporting competitive and integrated employment for disabled people. We found a rapidly shifting landscape. Many states have eliminated the subminimum wage and a growing list of others are phasing it out through legislation or executive action. In the week prior to the report’s publication, and the weeks since, three states have made new legislative moves on subminimum wage

Kansas

On February 8th, Kansas Governor Laura Kelly signed Senate Bill 15 into law. SB 15, known as the Disability Employment Act, aims to create more opportunities for people with disabilities, increase the workforce, and promote dignified work. The act aims to achieve these goals through two primary strategies.

First, it creates the Sheltered Workshop Transition Grant Program, a matching grant program that transitions employers away from using 14(c) and subminimum wages. Businesses that pay individuals with disabilities subminimum wages would be ineligible for the Disability Employment Act tax credit.

Second, the Act eliminates the minimum work-hour requirement for disabled Kansans to qualify for health insurance coverage.

This two-prong approach at supporting competitive integrated employment via legislation would support Kansans with disabilities in entering the workforce with fair wages and qualification for health insurance. It would also create incentives for providers and businesses to support individuals with disabilities in attaining fair wages.

Utah

While Kansas was joining the ranks of states phasing out subminimum wages and advancing employment opportunities for disabled workers, Utah’s legislature passed on the opportunity. Utah’s Rep. Brett Garner proposed an amendment to the state’s minimum wage laws in HB 205. This amendment would have taken effect in January of 2026 and Utah would have joined the 10 other states that fully eliminated subminimum wages and the five others that are actively phasing out. Instead, Utah’s bill failed in a 3-6 vote by a state House committee with one Republican joining the two Democrats in supporting the measure.

Georgia

Where Utah was unable to move legislation forward, Georgia saw progress on its similar approach. On February 29th, a bill that would eliminate the subminimum wage in Georgia passed a House committee vote. HB 1125 amends Title 34 of the Official Code of Georgia Annotated to phase out the payment of subminimum wages to disabled individuals and would prohibit employers from using 14(c) certificates issued by the U.S. Department of Labor.

Kansas, Utah and Georgia are states with emerging developments around the subminimum wage, but they aren’t alone this year in the push for change. Illinois is an example of a state showing ongoing efforts through legislation that has been introduced several times. Despite the push and pull at the state level around eliminating 14(c), the overall trend is toward Competitive Integrated Employment and building robust programs and supports for people with disabilities in employment. Kansas’ commitment, Utah’s efforts and Georgia’s progress are evidence of the mounting pressure to eliminate the subminimum wage.