On November 17, 2016, the U.S. Department of Labor issued new guidance on the payment of subminimum (or special minimum) wages to workers with disabilities. As many are aware, Section 14(c) of the Fair Labor Standards Act (“FLSA” or “Act”) authorizes the DOL to issue certificates permitting employers to pay subminimum wages to workers who have disabilities “to the extent necessary to prevent curtailment of opportunities for employment”. 29 U.S.C. § 214(c). In Administrative Interpretation 2016- 2, DOL Wage and Hour Administrator Dr. David Weil advises that issuance of a certificate under Section 14(c) of the Act does not excuse non-compliance with any state law establishing higher wage requirements for such workers.
Noting that the FLSA neither prohibits states from adopting higher minimum wage standards nor pre-empts any such enacted standards, the Interpretation cites judicial precedent affirming that “the purpose behind the FLSA is to establish a national floor under which wage protections cannot drop, not to establish absolute uniformity in minimum wage and overtime standards nationwide at levels established in the FLSA”. Relying upon purported regulatory support, the Interpretation extends this minimum standards approach to special or subminimum wages under Section 14(c), concluding that the Act does not relieve employers from complying with more protective standards applicable to disabled employees under state law.
Employers in Connecticut are probably also familiar with Conn. Gen. Stat. § 31-67 (“Section 13-67”), which similarly authorizes the state Labor Commissioner to issue a “special license” to employers to pay disabled workers less than the state minimum wage. However, legislators in Connecticut and many other states have questioned the continuing propriety of such measures in light of, inter alia, subsequent legislative enactments such as the Americans with Disabilities Act. While recent efforts to repeal Section 31-67 have failed, many other states have not only eliminated the permissive payment of lower wages to disabled persons but expressly prohibited such payments. As noted in the Interpretation, New Hampshire enacted a law in 2015 that prohibits payment of an hourly wage rate less than the state’s minimum wage to workers with disabilities.
Employers should take notice of the DOL Interpretation. While DOL Administrative Interpretations do not carry the force of agency regulations, many Courts routinely defer to such interpretations as a matter of practice. Hence, employers in Connecticut who currently hold Section 14(c) certificates should continue to monitor State law for any changes that might prohibit the payment of subminimum wages pursuant to that certificate. Employers of disabled employees in other states should check for applicable state wage requirements and consider complying with any such laws that require paying a higher wage, irrespective of prior receipt of a Section 14(c) certificate.