This week the Department of Labor announced it is suing a Montana ranch that employs people with disabilities and paid them as little as $1.17 an hour, alleging it violated labor law. It’s part of a push by the agency to intensify scrutiny of the subminimum wage that is an exception to the Fair Labor Standards Act, which allows some certified employers to pay workers with disabilities less than the federal minimum wage of $7.25 an hour.

The practice has been hotly debated for decades, and more than a dozen states, including South Carolina last month, have phased out these programs. But some advocates say this could leave a void.

In 2022, the idea of anyone in America being paid about a dollar an hour is pretty jarring, said Cyrus Huncharek, a senior public policy analyst with the National Disability Rights Network.

“It is shocking. People sometimes can’t believe that this still exists.”

Lawmakers started to look at work opportunities for people with disabilities when veterans began returning from the Civil War and then World War I. Then came the 1938 Fair Labor Standards Act, said Peter Blanck, a law professor at Syracuse University and chairman of its Burton Blatt Institute.

“The below-minimum-wage program was kind of a product of its time that was not charity, but was a sense that people with disabilities could in some ways be employed,” Blanck said.

But in the last century, thinking and laws around disability and employment have evolved, said Julie Christensen,...

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