Position Statement: Sub-Minimum Wage

Michigan’s Centers for Independent Living

Position Statement:
Sub-Minimum Wage Policy for People with Disabilities

Download PDF Download Word Doc

Summary:

The Michigan Network of Centers for Independent Living supports the elimination of subminimum wage for people with disabilities.

Issues:

  • Currently there are over 70 non-profit Community Rehabilitation Programs operating sheltered workshops (located within 39 Michigan counties) paying their workers with disabilities significantly less than minimum wage. Moreover, the majority of people with severe disabilities are employed in segregated and non-competitive settings and rarely advance to competitive employment. These “sheltered workshops” account for over 8,000 individuals with disabilities being compensated an average wage of $2.75/hour. This is a practice allowed through a 14(c) waiver to the Fair Labor Standards Act (FLSA).
  • Although many adults and youth with disabilities have the desire to work, 81% of people with intellectual and developmental disabilities (I/DD) are unemployed compared to 9% of individuals without disabilities.1 In fact, the National Core Indicators Adult Consumer Survey (NCI) shows that 60% of individuals with disabilities in Michigan desire a job in their community; however, only 17% of them have one.
  • Both the Rehabilitation Act of 1973, as amended by the Workforce Innovation & Opportunity Act (WIOA) and Michigan’s Employment First Executive Order 2015-15 recognize competitive employment within an integrated setting as the first priority and optimal outcome for persons with disabilities, of all levels and types.
  • They go on to clarify that employment should be:
  • “In the competitive labor market, performed on a full-time or part-time basis in an integrated setting; and for which an individual is compensated at or above the minimum wage, but not less than the customary wage and level of benefits paid by the employer for that or similar work performed by individuals who do not have a disability.”

Recommendations:

  • The Employment First Executive Order (EO 2015-16) has turned into action with state level workgroups collaborating to increase Competitive, Integrated Employment (CIE) for people with disabilities in Michigan. State Government and the legislature should continue to support this effort and any Employment First policies stemming from this work.
  • Michigan should pass legislation to eliminate paying subminimum wages to people with disabilities.
  • State Government should continue efforts to enhance its own workplace culture and include people with disabilities in its own talent pool.

Closing:

The Statewide Independent Living Council and Michigan Centers for Independent Living support eliminating the language that allows people with disabilities to be paid less than minimum wage.