Federal law has long permitted employers to pay workers with disabilities less than the federal minimum wage under Section 14(c) of the Fair Labor Standards Act. A recent federal decision allows this practice to continue, reigniting debate about employment equity for people with disabilities.

What Section 14(c) Allows

Section 14(c) certificates allow certain employers — primarily sheltered workshops and day programs — to pay workers with disabilities wages commensurate with their productivity compared to workers without disabilities performing the same task. In practice, this has meant some workers earning just cents per hour.

Arguments For and Against

Proponents argue that Section 14(c) enables employment for individuals who may not be competitive in integrated settings, provides structure and community, and preserves options for families who rely on these programs.

Advocates for elimination argue that subminimum wages are discriminatory, that evidence shows integrated employment leads to better outcomes, and that the existence of sheltered workshops can disincentivize investment in supported employment alternatives.

What This Means for Families

For families planning for a loved one with a disability, employment status affects multiple areas of a financial plan:

  • SSI earned income rules: Wages from a 14(c) employer still count as earned income for SSI purposes, which can affect monthly benefit amounts.
  • ABLE accounts: Working individuals with disabilities may be eligible for additional ABLE contributions above the annual gift tax exclusion limit.
  • SSDI Trial Work Period: Any earnings — regardless of amount — can trigger trial work period rules for SSDI recipients.

Employment decisions for individuals receiving SSI or SSDI should never be made without first understanding how income will affect benefits. This is one of the most common — and costly — planning oversights we see.