Subminimum Wage Pay: Effective or Exploitative? 


Student Editorial


By Hannah Beighey 

This spring, 54 seniors at Culver City High School were asked in a digital survey, if they were aware that there are exceptions to the minimum wage that allow companies to pay less than the federal minimum wage to people with disabilities, in accordance with a FLSA 14(c) certificate. Approximately 77.8 % responded that they were unaware of this.

They were then asked if they felt it is fair to pay people with disabilities less than minimum wage. Of these 54 people, 79.6% also said ‘no.’

Section 214 (c)(1)(A) of The Fair Labor and Standards Act (FLSA) gives employers the opportunity to apply for a certificate that allows them to pay employees with disabilities less than the federal minimum wage of $7.25 an hour. This is a FLSA 14(c) certificate, which was intended to provide more opportunities for employment. But in reality, it has caused a culture of free labor since these employees are being played about $1 an hour and sometimes less.

According to ex-President George Bush’s former head of the Wage and Hour Division, Tammy McCutchen, “eliminating [the exception would] lead to the loss of those jobs.”

This, in fact, is not true, as 8% of people with disabilities are unemployed as compared to 3.7% of persons without disabilities, according to the Bureau of Labor Statistics. People with disabilities are unemployed at a higher rate than people without disabilities. This shows that even with 14(c) certificates being used, they still do not provide enough jobs.

Some illusions are that subminimum wage pay creates jobs and that these employees can be a burden to a company, costing them more in insurance money. But the Bureau of Labor Statistics shows that “workers with a disability were generally employed part-time more than those with no disability,” and part-timers do not qualify for company health insurance.

Those opposed to equal pay argue that this pay should continue because people with disabilities are less productive than those without disabilities. This is the intent of a 14(c) certificate, but as currently used that is not the case. The FLSA also states in Section 214(c)(2)(B), the wages must be adjusted at least annually to be comparable to the wages of persons without disabilities for the same kind of work. Ideally, this means that for 50% of the work they would get 50% of the pay, when in reality they are getting paid pennies to their counterparts’ dollar.

The largest known proprietor of this attack on civil liberties is the Goodwill, an organization known for helping people get job training and find a job.

Sadly, Goodwill is not the only company that takes advantage of this loophole, according to the Department of Labor in July 2018; nationally there were 1,920 employers who were approved for or had a certificate pending.

Among these employers is the Culver City Exceptional Children’s Foundation (ECF). This foundation has a budget of $27 million, according to the Department of Labor’s website, and 137 of ECF’s employees are paid under the 14(c) certificate. If only one of these employees works six hours a day, five days a week for about 47 weeks (this number takes into account five weeks of vacation) at $11 an hour (California state minimum wage) it would cost ECF $15,510 annually. In order to pay all their employees with disabilities this wage, it would cost $2,124,870 approximately. It would also be less than this number as many of these employees are part-time workers. This would cost them less than 8% of their annual operating budget.

The challenge now is bringing awareness to the companies that are violating people’s civil rights, in order to discontinue the use of 14(c) certificates.




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