Executive Order ends subminimum wages for federal contractors

Photo of 1, 5 and 10 dollar bills
Fair Wages for Fair Labor

After some initial reluctance, President Obama’s executive order raising the federal minimum wage for federal contractors, announced during the State of the Union, has been expanded to fully include people with disabilities.

“Let’s not forget — not only is it good for the economy, it’s the right thing to do,” President Obama stated in remarks before signing the executive order February 12. “There’s a simple moral principle at stake – if you take responsibility and you work as hard as these folks work, if you work full-time, you shouldn’t be living in poverty. Not in America. We believe that.

“And this executive order will cover Americans with disabilities – because this principle doesn’t just apply to some of us; it applies to all of us.”

Under the executive order, the minimum wage will raise from $7.25 to $10.10 per hour for all federal contractors. When initially announced, however, the increase did not apply to workers receiving legal subminimum wages, pursuant to Section 14(c) of the Fair Labor Standards Act.

Under this provision, enacted in 1938, certain employers can apply to the Department of Labor for a Special Minimum Wage Certificate, which allows them to pay certain employees with disabilities less than the minimum wage. Although these certificates were meant to create temporary job opportunities for individuals who otherwise may not be employed, more than 95 percent of people in these positions never transition into competitive employment.

The exclusion of these employees prompted outrage from many disability advocates, many of whom long opposed the Section 14(c) program and advocated for legislation to abolish it.

On January 30, the National Council on Disability, an independent federal agency, sent a letter to President Obama and Secretary of Labor Thomas Perez, criticizing the executive order.

On February 4, the Collaboration to Promote Self-Determination, a coalition of 21 major disability advocacy and other progressive groups, also sent a letter, calling it “economically sound and morally just to ensure that people with disabilities have access to the same wage protections as those without.”

Two weeks later, it is self-evident that their concerns were heard.

“The president heard the concerns voiced by many of our member organizations and allies — that it would be wrong to exclude workers with disabilities from such an order by relying on an archaic provision from a discriminatory 1938 law that is in need of reform,” the CPSD said in a statement. “All workers — including those with disabilities — should be paid fair wages for fair labor.”