Thomas C. Garretson, Robbins Schwartz, Chicago
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Illinois Joins Other States in Eliminating Sub-Minimum Wage Payments to Persons with Disabilities
On January 21, 2025, Governor Pritzker signed into law the Dignity in Pay Act, P.A. 103-1060. In doing so, Illinois joined 18 other states that have eliminated, phased out, or modified the legal authority of employers to pay sub-minimum wages to people with disabilities.
Section 14(c) of the Fair Labor Standards Act of 1938 (FLSA), ch. 676, 52 Stat. 1060, legally permits the employment of individuals with disabilities at wage rates below the federal minimum wage if the person’s disability impairs the worker’s earning or productivity capacity for the work being performed. See 29 U.S.C. §214(c). Data provided by the U.S. Department of Labor in October 2022 reflects that Illinois ranks second in the United States in the number of §14(c) wage certificates issued or pending. Under the Dignity in Pay Act, however, all §14(c) wage certificates expire on December 31, 2029, and no certificates may be issued after that date.
The Act requires, by no later than July 1, 2025, the Employment and Economic Opportunity for Persons with Disabilities Task Force to create a multi-year plan of recommended actions, outcomes, and benchmarks to help the state successfully eliminate the use of §14(c) wage certificates on and after December 31, 2029. 20 ILCS 4095/16. The multi-year plan is required to include (1) identification, gathering, and analytics of data to inform the Task Force’s work; (2) recommended actions to assist providers in employing people with disabilities; (3) recommended measurable outcomes for each year of the plan; and (4) recommended benchmarks for each year of the plan. 20 ILCS 4095/16(1). In developing the multi-year plan, the Task Force is required to consider various factors and consult with a number of designated groups. The Task Force is required to submit annual reports on implementation of the multi-year plan to the Governor and the General Assembly no later than January 1 of each year through 2030. 20 ILCS 4095/16(4).
The Act also amends the Department of Human Services Act, 20 ILCS 1305/1-1, et seq., to direct the Department of Human Services (DHS) to establish a §14(c) transition program to award grants to eligible community agencies with active or pending §14(c) certificates to aid in the transition away from paying sub-minimum wages to workers with disabilities. 20 ILCS 1305/1-95. Eligibility for the program grants is contingent upon community agencies submitting transition plans. DHS shall make grants to eligible §14(c) certificate holders to assist workers with disabilities who are working for sub-minimum wages to transition to competitive integrated employment. The grant funding is to be used to (1) provide competitive integrated employment; (2) assist individuals with disabilities who were employed at sub-minimum wages to find and retain competitive integrated employment; or (3) provide integrated community participation and wrapround services for individuals with disabilities who were employed at sub-minimum wage. 20 ILCS 1305/1-95(c).
Employers with §14(c) wage certificates must begin planning now for the eventual elimination of the minimum wage exception in 2030.
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