To phase out special wage certificates under the Fair Labor Standards Act of 1938 under which individuals with disabilities may be employed at subminimum wage rates.

Summary: Fair Wages for Workers with Disabilities Act of 2011 - Directs the Secretary of Labor to discontinue issuing to any new profit or non-profit or governmental entity special wage certificates (which permit individuals with disabilities, including individuals employed in agriculture, to be paid at lower than minimum wages).

Prescribes requirements for a three-year phase-out of all certificates.

Amends the Fair Labor Standards Act of 1938 to repeal authority and requirements for the issuance of such certificates three years after enactment of this Act. Requires revocation of any certificates remaining at that time.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Fair Wages for Workers with 
Disabilities Act of 2011''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) Current Federal law allows the Secretary of Labor to 
        grant special wage certificates to entities that provide 
        employment to workers with disabilities, allowing such entities 
        to pay their disabled workers at rates that are lower than the 
        Federal minimum wage.
            (2) The practice of paying workers with disabilities less 
        than the Federal minimum wage dates back to the 1930s, when 
        there were virtually no employment opportunities for disabled 
        workers in the mainstream workforce.
            (3) Today, advancements in vocational rehabilitation, 
        technology, and training provide disabled workers with greater 
        opportunities than in the past, and the number of such workers 
        in the national workforce has dramatically increased.
            (4) Employees with disabilities, when provided the proper 
        rehabilitation services, training, and tools, can be as 
        productive as nondisabled employees. Even those individuals 
        that are considered most severely disabled have been able to 
        successfully obtain employment earning minimum wage or higher.
            (5) While some employers possessing special wage 
        certificates claim to provide rehabilitation and training to 
        disabled workers to prepare them for competitive employment, 
        the fact that such employers can pay their workers less than 
        the Federal minimum wage gives them an incentive to exploit the 
        cheap labor provided by their disabled workers rather than to 
        prepare those workers for integrated employment in the 
        mainstream economy.
            (6) Many employers with a history of paying subminimum 
        wages benefit from philanthropic donations and preferred status 
        when bidding on Federal contracts. Yet they claim that paying 
        minimum wage to their employees with disabilities would result 
        in lack of profitability and forced reduction of their 
        workforces.
            (7) Other employers, recognizing that the payment of 
        subminimum wages is in fact exploitation of disabled workers, 
        are now paying the Federal minimum wage, or higher, to their 
        employees with disabilities without reducing their workforces, 
        while still maintaining their profitability. For example, 
        National Industries for the Blind (NIB) agencies exploited 
        their blind employees for years through the payment of 
        subminimum wages, claiming they could not maintain 
        profitability otherwise. Now, ``All NIB associated agencies are 
        committed to the NIB Board policy to pay employees, whose only 
        disability is blindness, at or above the Federal minimum wage 
        or their state minimum wage, whichever is highest.''
            (8) The Wage and Hour Division of the Department of Labor 
        is charged with the responsibility for oversight of these 
        special wage certificates. The results from thorough 
        investigations conducted by the Government Accountability 
        Office--``Stronger Federal Efforts Needed for Providing 
        Employment Opportunities and Enforcing Labor Standards in 
        Sheltered Workshops, Report to the Congress, Comptroller 
        General of the United States'' (HRD-81-99) and ``Report to 
        Congressional Requesters, Special Wage Program: Centers Offer 
        Employment and Support Services to Workers With Disabilities, 
        But Labor Should Improve Oversight'' (GAO-01-886)--explain that 
        due to lack of capacity, training, and resources, the Wage and 
        Hour Division is incapable of enforcing compliance with the 
        subminimum wage provision. Furthermore, the significant 
        appropriation that would be required to improve oversight of 
        the regulation would be better spent improving employment 
        outcomes for people with disabilities.
            (9) According to the rules established under section 14(c) 
        of the Fair Labor Standards Act of 1938, employers are to 
        determine the special wage to be paid to a disabled employee 
        through a complicated method that unfairly establishes a 
        productivity benchmark that would be difficult for anyone to 
        maintain. The inability of many employers to correctly 
        establish the wage pursuant to the rule has regularly resulted 
        in disabled employees receiving even less than the special 
        minimum wage (below the federally established minimum wage) 
        that they should have received under the regulation.

SEC. 3. TRANSITION TO FAIR WAGES.

            (1) Discontinuance.--Effective on the date of enactment of 
        this Act, the Secretary of Labor shall discontinue issuing 
        special wage certificates under section 14(c) of the Fair Labor 
        Standards Act of 1938 (29 U.S.C. 214(c)) to any new entities 
        not currently holding a certificate.
            (2) Transition.--All special wage certificates held on the 
        date of enactment of this Act--
                    (A) by private for profit entities shall be revoked 
                1 year after such date of enactment;
                    (B) by public or governmental entities shall be 
                revoked 2 years after such date of enactment; and
                    (C) by non-profit entities shall be revoked 3 years 
                after such date of enactment.
            (3) Repeal.--Effective 3 years from the date of enactment 
        of this Act, section 14(c) of the Fair Labor Standards Act of 
        1938 (29 U.S.C. 214(c)) is repealed and any remaining special 
        wage certificates issued under such section shall be revoked.