Bill would ensure workers with disabilities are paid federal minimum wage

Yahoo

27-02-2025

Rep. Josh Turek, D-Council Bluffs, left, spoke to fellow legislators about his proposed bill to require workers with disabilities are paid the federal minimum wage at a subcommittee meeting Feb. 26, 2025. Reps. Jeff Cooling and Barb Kniff McCulla were on the subcommittee. (Photo by Robin Opsahl/Iowa Capital Dispatch)
Employers would be required to pay workers with disabilities the federal minimum wage in Iowa under a proposal discussed in a House subcommittee Wednesday.
Currently, Americans with disabilities can be paid less than the federal minimum wage, $7.25 per hour, in certain circumstances under the U.S. Fair Labor Standards Act. Employers can apply for a 14(c) certificate under this federal law to be authorized to pay subminimum wages to workers with disabilities.
The bill discussed Wednesday, House File 538, would remove this provision in Iowa, and would require the Iowa Department of Inspections, Licensing and Appeals (DIAL) to make an outreach effort to employers of disabled Iowans to ensure awareness and compliance by the proposed start date, July 1, 2026.
Lela Lanier, a law student at Syracuse University, said that under current law, workers with disabilities earn an average of $4.08, with many making under $3.50 an hour. She said Iowa law and state Supreme Court precedent recognizes the right of citizens to earn a living wage and engage in legitimate employment, and that paying subminimum wages to workers with disabilities keeps these Iowans from accessing their rights.
'This practice keeps individuals trapped in poverty, unable to gain financial independence or fully participate in the economy,' Lanier said. 'And the cost of living for individuals disabilities is estimated to be 28% higher than for those without disabilities, making financial stability even more difficult to achieve. This inequity is not only harm(ing) individuals, but also weakens Iowa's overall economy by limiting the purchasing power and contributions of a significant portion of its workforce.'
The bill also would make 'competitive and integrated employment' the first and preferred option of the state programs and agencies engaged in assisting people with disabilities with finding employment. That means state services would be required to highlight work opportunities for people with disabilities that offer minimum wage or above and are in shared spaces with nondisabled individuals.
Other speakers, representing groups that work with Iowans with disabilities, spoke in support of the measure and said many employers are choosing to raise wages to meet these standards in the state already.
Jodi Tukker, executive director at the Christian Opportunity Center, spoke in opposition to the measure, saying the center maintained a subminimum wage certificate until 2023 that she said allowed options for people with more severe disabilities who otherwise 'have never been able to find work' outside of programs.
Of the 135 individuals who were employed through the center's sheltered workshop, she said 70 are now working competitively, while others are now in non-paid day activities, which she said 'is great, but they miss working.'
'They miss having the purpose that having a job brings,' Tukker said. 'And those who are working in competitive employment — they used to work maybe 25 hours a week. Now they're working maybe 10, some one or two hours per week, and the rest of their time, again, unstructured time. So it just widens the number of individuals that can be employed in some capacity, regardless of the amount that is on their paycheck. It is a paycheck, and they are able to say they go to work every day and they have a job.'
Amy Campbell, representing several clients including Link Associates, Lutheran Services in Iowa and Systems Unlimited, said there are often other reasons why people with disabilities have to take on fewer hours in competitive employment settings — typically, due to Medicaid eligibility requirements surrounding asset and wage caps.
Campbell said Iowa would join a growing number of states taking action on this issue and allowing more workers with disabilities to be integrated into the workforce.
'I think it's time we move on. Many states are doing this,' Campbell said. '… It's a national move to actually integrate people into employment settings. And I think all of us want to see people with disabilities having an opportunity (to participate) fully in their community.'
Rep. Josh Turek, D-Council Bluffs, who introduced the legislation, said the measure includes exemptions for some nonprofits in recognition of spaces that provide day services and social settings for individuals with high needs. However, he said the larger change was needed because of instances that have happened in Iowa where businesses have taken advantage of workers with disabilities.
'What we don't want to see is like what has happened here in Iowa, where we have a for-profit vendor, like a turkey farm, that is taking advantage of individuals,' Turek said. 'No one should have to take less pay just because of a physical disability or because of intellectual disability. Many states have done this, and I think it would be fantastic for Iowa to do it.'
Rep. Barb Kniff McCulla, R-Pella, said the legislation was still being considered, and did not say at the end of the subcommittee whether the measure will advance for consideration by the full House Labor and Workforce Committee.
'I know the companies that I spoke with, they were all pretty above minimum wage for anybody that had disabilities,' Kniff McCulla said. 'So we'll kind of go from there.'