Alaska Ends Sub-Minimum Wages for Employees with Disabilities

Alaska will no longer allow people with disabilities to be paid below minimum wage, it announced Friday. Paying people with disabilities a sub-minimum wage has been legal in the U.S. since the enactment of the Fair Labor Standards Act of 1938.

The Fair Labor Standards Act allows businesses to pay employees “just pennies per hour,” according to the Department of Justice. Alaska, which adopted its own version of the Fair Labor Standards in 1978, is the third state to repeal its policy. New Hampshire was the first, followed by Maryland, which is in the process of phasing out low wages.

“Workers who experience disabilities are valued members of Alaska’s workforce,” Greg Cashen, acting commissioner of Alaska’s Department of Labor and Workforce Development, said in a statement. “They deserve minimum wage protections as much as any other Alaskan worker.”

According to a statement issued by Alaska’s Department of Labor and Workforce development, sub-minimum wages were historically deemed “necessary” to help people with disabilities get a job. Over the last two decades, it has been shown that people with disabilities can succeed in jobs at or above minimum wage.

Many disabled workers making below minimum wage work in “sheltered workshops” or nonprofits that exclusively hire people with disabilities.

Beyond low pay rates, sheltered workshops are controversial because they separate people with disabilities from the workforce, which the Supreme Court ruled was discriminatory. However, proponents of sheltered workshops see them as safe places for people with disabilities to work.

A major nonprofit that uses both sub-minimum wages and sheltered workshops is Goodwill, though the organization has started to bring up wages and end its sheltered workshops in some areas. Goodwill’s low wages sparked the Autistic Self Advocacy Network to issue a petition in 2013 through In the petition, ASAN said that Goodwill could afford to pay minimum wage to its employees when CEOs of franchises across the country were raking in a total of $30 million.

According to the Bureau of Labor Statistics, 17.9 percent of people with disabilities were employed. In comparison, 65.3 percent of people without a disability were employed. In the latest annual disability statistics report, 20.9 percent of people with disabilities lived in poverty compared to 13.1 percent of those without a disability in 2016.

President Obama issued an executive order in 2014 that stated federal workers had to be paid $10.15 an hour, including people with disabilities. The order did not, however, prohibit employers paying employees with disabilities less than other workers as long as they stayed at or above $10.15.

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Photo via Getty Images/AndreyPopov

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