Eastern Washington Congresswoman Cathy McMorris Rodgers (WA-05) and Congressman Bobby Scott (VA-03) introduced the bipartisan Transformation to Competitive Integrated Employment Act to ensure that states and employers help workers with disabilities transition into fully integrated and competitive jobs.
The Transformation to Competitive Integrated Employment Act provides states, service providers, subminimum wage certificate holders, and other agencies with the resources to create competitive integrated employment service delivery models while phasing out subminimum wages for workers with disabilities, which are currently allowed under Section 14(c) of the Fair Labor Standards Act, over a five-year period.
“Disability employment is the next policy frontier to empower people with disabilities to live full and independent lives,” said Rodgers. “A job is so much more than just a paycheck, it’s what gives us dignity, purpose, and the opportunity for a better life. I look forward to continuing to work in a bipartisan fashion to ensure more people – who are ready, willing, and able to work – find employment.”
Under Section 14(c), employers can apply for special certificates from the U.S. Department of Labor (DOL) to pay individuals with disabilities less than the federal minimum wage. There is no minimum floor for the hourly wage that an employer can pay an individual with a disability under these certificates.
“Today, federal law continues to deny access to opportunity for many workers with disabilities. It is long past time for Congress to phase out the subminimum wage for workers with disabilities and expand access to fulfilling employment and economic self-sufficiency,” said Scott. “By fostering collaboration between employers and services providers, this legislation makes clear that it is not only possible, but beneficial to invest in fully integrated and competitive jobs for people with disabilities. We must take this next step to ensure that every worker can succeed in the workplace and earn a fair wage.”
In 2020, the U.S. Commission on Civil Rights called for phasing out the 14(c) subminimum wage, finding that it has “limited people with disabilities participating in the program from realizing their full potential while allowing providers and associated businesses to profit from their labor.” Research also confirms that, when individuals with disabilities transition to competitive employment, they are better able to achieve financial independence and spend time engaging in their community.
While seven states have either phased out workshops that pay subminimum wages or are in the process of doing so, a recent GAO report underscores that many employers and workers with disabilities do not have the appropriate resources or services to transition to competitive integrated employment. The Transformation to Competitive Integrated Employment Act specifically provides states, service providers, subminimum wage certificate holders, and other agencies with resources and technical assistance to help workers with disabilities transition away from sheltered workshops and into community employment settings.
The Transformation to Competitive Integrated Employment Act:
Click here for a fact sheet on the Transformation to Competitive Integrated Employment Act.
- Creates a competitive state grant program to assist states to transition all 14(c) certificate holders to models that support competitive, integrated employment for individuals with disabilities. States will be able to apply for these transformation grants and must establish an advisory committee of key stakeholders, including employers, organizations specializing in employment for individuals with disabilities, Medicaid agencies, AbilityOne contractors, individuals with disabilities and their families, and vocational rehabilitation agencies. States that successfully complete a grant will be eligible for a 25% increase in the allotment for supported employment for individuals with the most significant disabilities.
- Creates a competitive grant program for current 14(c) certificate holders that are located in states that do not apply for the state grant, to transition their business models to support individuals with disabilities in competitive, integrated employment.
- Immediately freezes the issuance of any new 14(c) certificates by DOL and phases out the use of existing 14(c) certificates over 5 years until employees are paid at least the federal minimum wage.
- Establishes a technical assistance (TA) center to support all entities, even those not receiving the transformation grants, to transition to competitive integrated employment. The TA center, which will be funded by DOL, is tasked with disseminating information about best practices, lessons learned, and models for transition to all entities transitioning to competitive, integrated employment.
- Requires reporting and evaluation on the progress of creating and expanding the service delivery structure to support workers with disabilities in competitive integrated settings and the inclusive wraparound services they receive when not working. States and 14(c) certificate holders will also be required to report on their grant activities, evaluate changes in employment for individuals with disabilities, report average wage information, and evaluate employer actions taken to comply with the phase out of 14(c) and transformation grants.
Click here to read the bill text.
GAO identified 32 factors that can influence the transition from 14(c) employment to competitive integrated employment (CIE). Generally, CIE is employment that (1) is paid at or above the applicable minimum wage; (2) is performed in integrated settings, among people with and without disabilities; and (3) offers opportunities for advancement. GAO grouped the factors into the four categories depicted below, and experts and state officials GAO interviewed validated them.
The 17 interviewees identified the factors in each category they believed to be among the most important for influencing transition from 14(c) employment to CIE, and provided some additional detailed perspectives. Such factors included:
- Concern for Maintaining Benefits (employee): Eight interviewees considered this factor to be among the most important. They explained that individuals or families may fear that earning higher wages in CIE would make individuals ineligible for certain benefits, but several noted that benefits counseling could mitigate these concerns.
- Sufficiency of CIE Resources for 14(c) Certificate Holder (employer): Eight interviewees considered this factor to be among the most important. Six interviewees noted that certificate holders may be discouraged from providing CIE-focused services, such as job coaching, when funding for these services is lower than for services provided in 14(c) settings.
- State Resources for CIE (public policy): Twelve interviewees considered this factor to be among the most important. For example, officials from one state described plans to offer specialized training to 14(c) employer staff, which two interviewees said is key to helping individuals transition to CIE.
- Available Transportation (local economy): Eight interviewees considered this factor to be among the most important. Two interviewees noted ways to mitigate transportation-related challenges, such as 14(c) employers identifying nearby job openings for potential CIE positions.
Most interviewees said that the COVID-19 pandemic had caused disruptions to either 14(c) employment or CIE and described uncertainties about the future of transitions. For example, many interviewees noted that 14(c) employers have closed their facilities to comply with public health requirements. While some interviewees said that many individuals working in CIE have retained their jobs due to their status as essential workers, other interviewees described a general fear that people with disabilities are first to be fired and last to be rehired.