For years the U.S. Department of Labor has allowed entities to pay subminimum wages to workers with disabilities. The policy — through the Fair Labor Standards Act — was enacted in 1938 to provide employment to those who otherwise wouldn’t have jobs, a worthy cause for the time. But this is 2025 and the state of Indiana is set to end funding for the program in 2027.
Dollars, hopefully then, would be redirected to help those individuals find fair employment.
This is the best course of action for disabled workers, many of whom are employed in what are called sheltered workshops and many of whom are paid unfairly. To pay them less than minimum wage is a disgrace. The services they provide should be recognized in an equitable way.
“I view what I get paid as a slap in the face,” Jessica Reynolds, who works for a nonprofit approved to pay subminimum wages, told CNHI state reporter Carson Gerber for a recent story.
We agree. Those with disabilities work just as hard — some harder — than those without disabilities. Their efforts should be fairly compensated. They deserve the same respect as any other worker in our communities.
But the solutions aren’t that simple. Some worry workers could lose Medicaid if they enter community-based employment. Others worry those who can’t work in the community will be left behind.
“We don’t want people to just go home and do nothing,” Kim Dodson, CEO of The Arc of Indiana, told Gerber.
So, what’s the answer? We applaud state administrators, who Gerber reported, for several years have been edging toward ending sheltered workshops by providing grants to transition to programs that help those with disabilities find private-sector jobs. In addition, the 2017 Indiana Employment First Act mandates state agencies work first to ensure their programs and funding support individuals to find community- based employment.
Their efforts are working. The number of entities using certificates to pay subminimum wages has dropped.
Businesses also benefit, as Dodson said, “Hiring people with disabilities is actually good business, not just good charity, because they are really good employees.”
In addition, Indiana Rep. Ed Clere, R-New Albany, has submitted legislation that would do away with income limits for those who want to work and keep their Medicaid benefits. Hopes are the legislation gains traction this year because of the pending workshop phaseout.
Clere also authored legislation in 2023 creating a pilot program to train those with disabilities for jobs in manufacturing. He argued sheltered workshops should now transition into training facilities, reported Gerber.
And for those with severe disabilities who need the sheltered workshops, Clere supports keeping the workshops around, but paying the workers at least minimum wage.
Dodson suggested options could include enrolling clients in day programs to teach skills or providing volunteer opportunities.
A combination of these solutions would help change the landscape for many disabled workers and should be carried out. It’s time to end subminimum wage jobs for good and in doing so provide the support needed for those with disabilities to live — and work — with dignity.
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