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Phase Out of Subminimum Wages for Workers on AbilityOne Contracts

On March 20, SourceAmerica (formerly National Industries for the Severely Handicapped) announced that it had notified its affiliated nonprofit AbilityOne agencies (NPAs) of its plan to eliminate the use of Special Minimum Wage Section 14(c) certificates on AbilityOne contracts. Click this link to view a copy of the SourceAmerica letter.

The U.S. Department of Labor’s Wage and Hour Division (WHD) published three documents providing guidance on the payment of subminimum wages under section 14(c) of the Fair Labor Standards Act (FLSA). 

The first two are related to the impact of Rehabilitation Act section 511 and third provides general guidance on the administration of section 14(c).  You can see the documents by clicking on their title below:

The first document is Field Assistance Bulletin (FAB) No. 2019-1 concerning the definition of subminimum wages under section 511 and WHD’s enforcement of the limitations on the payment of those wages under section 14(c).

The second is a revised Fact Sheet #39H: The Workforce Innovation and Opportunity Act and Limitations on Payment of Subminimum Wages under Section 14(c) of the Fair Labor Standards Act.  The revisions include information on the definition of subminimum wages and timing requirements under section 511, as well as two charts to provide visual summaries for determining when and to whom the specific section 511 requirements apply.  The Fact Sheet also cross-references readers to the related regulations issued by the U.S. Department of Education.

The third guidance document, Fact Sheet #39I:  Adjusting Commensurate Wage Rates under a Section 14(c) Certificate After a Change in the Minimum Wage, provides guidance on taking appropriate action to ensure prevailing wage rates are timely examined and adjusted, and the workers’ commensurate wage rates correspondingly adjusted, as needed, when there is an increase in the federal, state, or a locality’s minimum wage requirements.

Phase One of the national study of the change in 14c employers and subminimum wage workers is now complete!

Current WINTAC researcher Jenean Jacobs and former WINTAC researcher Sarah Hancock have completed a study that spans from January, 2016 through July, 2018 on the change in the number of 14c certificate holders and the change in the number of individuals with disabilities working in subminimum wage employment. This information is based on data from the Wage and Hour Division of the Department of Labor.

Click here to see a summary of the change by State (This should result in a download of the spreadsheet on the summary of changes)

Click here to see the specific State by State according to the tabs at the bottom of the spreadsheet (This should result in a download of the larger “all states” spreadsheet)

Stay tuned for Phase Two of the project which will examine what happened to the 14c holders that let their certificates expire without renewing.

Note: In some instances, the data from DOL shows a 14c holder as active but no data is listed during the most recent report. This is the reason for the extra column in the summary sheet and the additional calculation in each of the spreadsheet tabs.

This section of the website includes resources that we hope you will find useful related to Section 511, subminimum wage employment, and related topics.  We will be adding to this section regularly, so please check back often.