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Why can companies pay those with disabilities less when they do the same work as others?

February 09, 2021 |

Why can companies pay those with disabilities less when they do the same work as others?

The Raise the Wage Act, recently introduced to Congress, will spark another debate about raising the national minimum wage. But it also shines a light on wage discrimination against people with disabilities, something New Jersey has failed to address.

New Jersey is one of a handful of states that have already passed a $15 an hour minimum wage law. Yet we didn’t stop the practice of allowing employers to pay people with disabilities subminimum wages. The Raise the Wage Act backed by the Biden administration would gradually phase this practice out, assuming it passes into law. We urge New Jersey lawmakers not to wait on an uncertain political outcome and act now to end this discriminatory practice.

Wage discrimination against people with disabilities has been codified by federal law since 1938 under the ironically titled “Fair Labor Standards Act.” Through an out-clause – Section 14(c) – in the Act, companies currently can apply for an exemption to pay workers with disabilities less than the current minimum wage. While adjustments were made to this law since its enactment, they only have lowered the standards further, lessening the wages allowed for the disabled.

The reasoning behind this inequity is that employing people with disabilities is a charitable gesture and that the wage should be adjusted for work product quality, as well as labor efficiency and productivity. The fact that a worker may have a disability is by itself not sufficient to warrant the payment of a subminimum wage under existing law.

However, the disparity in the application of this policy and the limited consideration of individual ability simply creates legalized accommodation of substandard wages for people with disabilities. The result is workers with intellectual and developmental disabilities are often placed in sheltered workshops and not encouraged enough to transition to more conventional work environments.

Advocates and families have challenged this for decades. A blanket pass for employers to treat people with disabilities as a substandard class of employees is nothing less than sanctioned institutional discrimination.

That is why the U.S. Commission on Civil Rights called for an end to subminimum wage in its September 2020 report, noting this policy is “inconsistent with the civil rights protections to which people with disabilities are entitled.” But only six states have ended or are in the process of phasing out subminimum wages for people with disabilities: New Hampshire, Maryland, Alaska, Texas, Oregon and Nevada. New Jersey is not among them.

This should not be viewed as an indictment of New Jersey companies that have generously embraced the disabled community. They have partnered with many organizations on workforce development, training and employment. We in the disability community have welcomed their support and involvement and sincerely recognize their contributions.

Many people with cognitive and intellectual disabilities lead productive and fulfilling lives, and employment plays a critical part in the quality of their lives. In addition to economic support, individuals develop a sense of purpose and direction that is supported by the community setting and camaraderie provided through involvement in the workforce. That would not be possible without the support of good corporate citizens.

But the institutionalized discrimination of any community cannot continue. The substandard wage class created by the loopholes in current law must be addressed now. The unemployment rate for people with disabilities was already 7.3% in 2019, almost double the national unemployment rate of 3.7%, before the pandemic struck.

We applaud and support the Biden administration’s push to end the subminimum wage. But we also need New Jersey lawmakers to act now to end this shameful discrimination.

Robert Stack is the founder and CEO of Princeton-based Community Options, Inc., which provides housing and employment supports for thousands of people with disabilities in over 40 offices across 10 states.