GAO Report Spotlights Subminimum Wage Earners’ Experiences

A recent Government Accountability Office (GAO) report explored the current use of subminimum wage certificates across the country. The U.S. Department of Labor issues these certificates, known as 14(c) certificates, to employers so they may employ individuals with intellectual or developmental disabilities for less than the minimum wage. Approximately 40,000 people were employed under these certificates in 2024.  

However, 14(c) certificates are increasingly falling out of favor with states and the federal government as policymakers have placed greater emphasis on “competitive, integrated employment opportunities.” The new emphasis seeks to integrate people with disabilities into traditional work environments alongside employees without disabilities. Defending this vision, disability rights activists have also raised concerns about offering a subminimum wage, viewing it as discriminatory.  

The latest GAO report looks at two states — Colorado and Oregon — that have abolished the 14(c) program. It includes the perspectives of people formerly employed under the certificates and what they are doing now in its stead.  

The Purpose of 14(c) 

The subminimum wage was introduced in 1938 as a way to employ individuals with disabilities, said Jody Boquist, an attorney at Littler in Chicago. “Historically, there certainly have been some horror stories,” she noted, with “a number of individuals who were being abused.” But in modern times, the employers that have 14(c) certificates are mainly community rehabilitation programs.  

People who work under 14(c) certificates may have difficulties with problem solving and learning, and they often work in sheltered workspaces where they can benefit from trained supervision. It is common for these employers to be nonprofits that offer workers a way to attain skills while participating in activities that provide socialization.  

“There aren’t a lot of programs for individuals with intellectual disabilities,” so 14(c) certificates offer a place to go as well as a sense of purpose, Boquist said. “So, it’s not all about the money.” 

Potential Discrimination  

Some activists take issue with paying a worker below minimum wage on principle. “If it’s a subminimum wage, it’s not a minimum wage,” said Beth Sirull, president and CEO of the National Organization on Disability, headquartered in New York City. “It’s a basic civil right,” she said, and “we should not be able to have wage discrimination against a group of Americans.” 

Sirull pointed out that more states have moved to eliminate 14(c) certificates, and fewer people are working under the program. Over the last decade, 16 states have gotten rid of subminimum wage employment. In light of this trend, the GAO report specifically aimed to study the outcomes in two states where subminimum wage employment was phased out.  

Report Findings 

The GAO interviewed individuals who previously worked in sheltered workshops in Oregon and Colorado. Their views were mixed. While some participants said they had enjoyed the opportunity to work, certain caregivers expressed dissatisfaction, saying the individuals were qualified to do more meaningful work, ostensibly for a higher wage.  

According to both states’ data, less than half of 14(c) workers (39%-46%) had succeeded in finding work at or above the minimum wage. The remaining 54%-61% were not working but were benefiting from Medicaid services that assist in socialization and building daily living and employment skills.  

Workers who found competitive employment after the end of the 14(c) program expressed both positive and negative views to the GAO. Some reported increased pay and financial autonomy, while others reported difficulty finding work that met their personal needs.  

The individuals who took part in Medicaid-funded services said they enjoyed the activities and classes offered, but that it could be hard to access these services as often as they wished.  

The Future of 14(c) 

Should states choose to get rid of subminimum wage jobs, the question becomes what options are then available to individuals with disabilities. “When we are phasing out 14c, it’s critical that we ensure there are the resources available to help people get placed in either jobs or a day program that meets their needs,” Sirull said.  

As the GAO survey feedback suggested, some individuals were content with nonwork-based programs meant for socialization, while others were capable and willing to work traditional jobs. In the absence of 14(c) certificates, individuals with disabilities would instead go to minimum wage employers. That said, there is the question of whether those employers will be able to meet their needs in the same way that 14(c) employers could.  

“There are a number of examples of companies and organizations that have employed people with disabilities with appropriate training,” Sirull said. “There are reasonable accommodations that can be made” so that people with disabilities can do the same work for the minimum wage. 

But training and mentorship have a price tag, Boquist noted. For employers that would like to offer job opportunities to workers coming from 14(c) programs, the calculus is: “Where does the money come from, and how do you scale it to make it work?”