The Biden administration issued a notice of proposed rulemaking for ending certain preferential contracts with nonprofits that employ blind or seriously disabled workers. The nonprofits involved in these contracts have traditionally benefitted from a law that allows them to pay blind or seriously disabled employees less than the standard minimum wage. In addition, President Biden called for a phaseout of the program in his infrastructure proposal, which would include resources to help these workers transition into other better-paying jobs.
Section 14(c) of the Fair Labor Standards Act allows businesses to pay employees with physical or mental disabilities at rates below the federal minimum wage of $7.25 per hour if they obtain a certificate from the U.S. Department of Labor’s Wage and Hour Division. The U.S. AbilityOne Commission, an independent federal agency, announced the proposed rule.
Approximately 40% of the 400-plus participating nonprofits in the AbilityOne Program use Section 14(c) certificates that apply to 674 employees out of the 42,000 total employed by the nonprofit agencies, which is less than 2% of all employees.
“Although the number of NPAs affected by this proposed rule may be 42% of the NPAs participating in the AbilityOne program, the actual number of employees with disabilities for whom these NPAs will have to increase wages is a small number of NPA employees,” the notice says.
In the notice, the Commission stated, “U.S. public policy and approaches to...
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