(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 disabil-
ities less than the Federal minimum wage dates 
back to the 1930s, when there were virtually no em-
ployment opportunities for disabled workers in the 
mainstream workforce. 
(3) Today, advancements in vocational rehabili-
tation, 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 se-
verely 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 
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competitive employment, the fact that such employ-
ers can pay their workers less than the Federal min-
imum wage gives them an incentive to exploit the 
cheap labor provided by their disabled workers rath-
er than to prepare those workers for integrated em-
ployment in the mainstream economy. 
(6) Many employers with a history of paying 
subminimum wages benefit from philanthropic dona-
tions 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 pay-
ment of subminimum wages is in fact exploitation of 
disabled workers, are now paying the Federal min-
imum wage, or higher, to their employees with dis-
abilities without reducing their workforces, while still 
maintaining their profitability. For example, Na-
tional Industries for the Blind (NIB) agencies ex-
ploited 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 
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blindness, at or above the Federal minimum wage or 
their state minimum wage, whichever is highest.’’ 
(8) The Wage and Hour Division of the De-
partment 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 in-
capable of enforcing compliance with the submin-
imum wage provision. Furthermore, the significant 
appropriation that would be required to improve 
oversight of the regulation would be better spent im-
proving employment outcomes for people with dis-
abilities. 
(9) According to the rules established under 
section 14(c) of the Fair Labor Standards Act of 
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1938, employers are to determine the special wage 
to be paid to a disabled employee through a com-
plicated method that unfairly establishes a produc-
tivity benchmark that would be difficult for anyone 
to maintain. The inability of many employers to cor-
rectly 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 en-
actment; and 
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(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. 
Æ 
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