I 

112TH CONGRESS 

1ST SESSION H. R. 3086 

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. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 4, 2011 

Mr. STEARNS (for himself and Mr. BISHOP of New York) introduced the following bill; which was referred to the Committee on Education and the 

Workforce 

A BILL 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Fair Wages for Work5 ers with Disabilities Act of 2011’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 

8 (1) Current Federal law allows the Secretary of 

9 Labor to grant special wage certificates to entities 


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1 that provide employment to workers with disabilities, 

2 allowing such entities to pay their disabled workers 

3 at rates that are lower than the Federal minimum 

4 wage. 

5 (2) The practice of paying workers with disabil6 ities less than the Federal minimum wage dates 

7 back to the 1930s, when there were virtually no em8 ployment opportunities for disabled workers in the 

9 mainstream workforce. 

10 (3) Today, advancements in vocational rehabili11 tation, technology, and training provide disabled 

12 workers with greater opportunities than in the past, 

13 and the number of such workers in the national 

14 workforce has dramatically increased. 

15 (4) Employees with disabilities, when provided 

16 the proper rehabilitation services, training, and 

17 tools, can be as productive as nondisabled employees. 

18 Even those individuals that are considered most se19 verely disabled have been able to successfully obtain 

20 employment earning minimum wage or higher. 

21 (5) While some employers possessing special 

22 wage certificates claim to provide rehabilitation and 

23 training to disabled workers to prepare them for 

24 competitive employment, the fact that such employ25 ers can pay their workers less than the Federal minVerDate Mar 15 2010 22:28 Oct 04, 2011 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3086.IH H3086

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1 imum wage gives them an incentive to exploit the 

2 cheap labor provided by their disabled workers rath3 er than to prepare those workers for integrated em4 ployment in the mainstream economy. 

5 (6) Many employers with a history of paying 

6 subminimum wages benefit from philanthropic dona7 tions and preferred status when bidding on Federal 

8 contracts. Yet they claim that paying minimum wage 

9 to their employees with disabilities would result in 

10 lack of profitability and forced reduction of their 

11 workforces. 

12 (7) Other employers, recognizing that the pay13 ment of subminimum wages is in fact exploitation of 

14 disabled workers, are now paying the Federal min15 imum wage, or higher, to their employees with dis16 abilities without reducing their workforces, while still 

17 maintaining their profitability. For example, Na18 tional Industries for the Blind (NIB) agencies ex19 ploited their blind employees for years through the 

20 payment of subminimum wages, claiming they could 

21 not maintain profitability otherwise. Now, ‘‘All NIB 

22 associated agencies are committed to the NIB Board 

23 policy to pay employees, whose only disability is 

24 blindness, at or above the Federal minimum wage or 

25 their state minimum wage, whichever is highest.’’ 


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1 (8) The Wage and Hour Division of the De2 partment of Labor is charged with the responsibility 

3 for oversight of these special wage certificates. The 

4 results from thorough investigations conducted by 

5 the Government Accountability Office—‘‘Stronger 

6 Federal Efforts Needed for Providing Employment 

7 Opportunities and Enforcing Labor Standards in 

8 Sheltered Workshops, Report to the Congress, 

9 Comptroller General of the United States’’ (HRD– 

10 81–99) and ‘‘Report to Congressional Requesters, 

11 Special Wage Program: Centers Offer Employment 

12 and Support Services to Workers With Disabilities, 

13 But Labor Should Improve Oversight’’ (GAO–01– 

14 886)—explain that due to lack of capacity, training, 

15 and resources, the Wage and Hour Division is in16 capable of enforcing compliance with the submin17 imum wage provision. Furthermore, the significant 

18 appropriation that would be required to improve 

19 oversight of the regulation would be better spent im20 proving employment outcomes for people with dis21 abilities. 

22 (9) According to the rules established under 

23 section 14(c) of the Fair Labor Standards Act of 

24 1938, employers are to determine the special wage 

25 to be paid to a disabled employee through a comVerDate Mar 15 2010 22:28 Oct 04, 2011 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3086.IH H3086

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1 plicated method that unfairly establishes a produc2 tivity benchmark that would be difficult for anyone 

3 to maintain. The inability of many employers to cor4 rectly establish the wage pursuant to the rule has 

5 regularly resulted in disabled employees receiving 

6 even less than the special minimum wage (below the 

7 federally established minimum wage) that they 

8 should have received under the regulation. 

9 SEC. 3. TRANSITION TO FAIR WAGES. 

10 (1) DISCONTINUANCE.—Effective on the date of 

11 enactment of this Act, the Secretary of Labor shall 

12 discontinue issuing special wage certificates under 

13 section 14(c) of the Fair Labor Standards Act of 

14 1938 (29 U.S.C. 214(c)) to any new entities not 

15 currently holding a certificate. 

16 (2) TRANSITION.—All special wage certificates 

17 held on the date of enactment of this Act— 

18 (A) by private for profit entities shall be 

19 revoked 1 year after such date of enactment; 

20 (B) by public or governmental entities 

21 shall be revoked 2 years after such date of en22 actment; and 

23 (C) by non-profit entities shall be revoked 

24 3 years after such date of enactment. 


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1 (3) REPEAL.—Effective 3 years from the date 

2 of enactment of this Act, section 14(c) of the Fair 

3 Labor Standards Act of 1938 (29 U.S.C. 214(c)) is 

4 repealed and any remaining special wage certificates 

5 issued under such section shall be revoked. 

Æ 


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