Virginia is putting measures in place to ensure that employees with disabilities get paid the same amount as anyone else – and while the law is well-meaning, one local non-profit leader fears that the increase in minimum wage may eventually force small businesses and organizations to eliminate hiring disabled people altogether.
In the past, companies hiring employees with disabilities have been able to pay the employee less than the minimum wage through an exclusion of the Virginia Minimum Wage Act. The national average for workers being paid a subminimum wage is only $3.34 per hour. The rate is based on how productive the disabled employee is at a task compared to an employee without a disability.
On July 1, new legislation in Virginia (HB 1924) will mean no new exclusions for companies will be granted in Virginia to authorize subminimum wages. Companies that already have a certificate prior to July 1 that pay a subminimum wage will have until 2030 to bring the pay rate up to Virginia’s minimum wage. After July 1, 2030, the exclusion will be eliminated entirely.
Vector Industries CEO Chrissy Johnston said that Virginia has created a “double whammy.” While eliminating the certificate was good, she said, raising the minimum wage “so high and so fast will likely have a negative effect down the road.”
Virginia’s minimum wage
In Virginia, the federal minimum wage rate of $7.25 per hour was in place until legislation in Virginia put the state’s minimum wage rate on a path to get to $15 per hour.
- Virginia law updated the state’s minimum wage to $9.50 per hour in May 2021.
- Beginning Jan. 1, 2022, the rate increased to $11 per hour.
- On Jan. 1, 2023, the rate increased to $12 per hour.
- On Jan. 1, 2025, the rate is set to go up again, to $13.50 per hour. And the final increase, set for Jan. 1, 2026, will raise the hourly rate to $15 in Virginia.
In 2030, then, when the subminimum wage certificate is eliminated entirely, employers paying a subminimum wage will have to pay the same worker $15 per hour, under Virginia’s law.
Federal grant may help with transition
Virginia was awarded a grant from the Rehabilitative Services Administration through the Disability Innovation Fund to transition hundreds of Virginians to full minimum wage rates.
“Virginia has always been a leader in providing equal opportunity to people with disabilities,” said Del. Patrick Hope (D-Arlington), who introduced the bill eliminating subminimum rates to the Virginia General Assembly. “Thanks to a federal grant, Virginia can now begin to phase out paying workers with disabilities a subminimum wage. My legislation will take the final step to treat all Virginians with disabilities equally and fully integrate them into a community setting.”
Melwood, a leading advocate, employer and service provider for people with disabilities, strongly supported the new legislation.
“The way our laws are written matter. When people with disabilities can legally be paid less than people without disabilities, that’s a civil rights issue,” said Larysa Kautz, president and CEO of Melwood. “We must be on the right side of leading and shaping the future of how people with disabilities are treated in our country.”
Dozens of organizations working with the disabled population supported the legislation.
“Individuals with Down syndrome and other disabilities are a vital part of society and our economy,” said Kandi Pickard, president and CEO of the National Down Syndrome Society. “Wage equity is social equity. Eliminating subminimum wage is crucial to not only the disability community, but to the state as a whole.”
Vector Industries: On subminimum wages and minimum wage increases
Vector Industries was founded in 1969 in Waynesboro with a mission to operate a business that trains and employs people with diverse abilities to enable them to reach their potential as productive community members. While Vector did utilize the subminimum pay rate exemption, the job was intended to give the disabled person a sense of pride and a paycheck.
Vector Industries sensed the state was moving away from supporting subminimum pay rates and were ahead of the curve – eliminating the practice long before it was required.
Vector stopped paying subminimum wages to its disabled employees and paid employees the minimum wage at the time of $7.25 per hour. Johnston said before the COVID-19 pandemic, everyone working at Vector was making minimum wage or higher.
“It has worked out well as we were able to adjust to the added expense over a period of time,” she said.
However, it has been a challenge to continue to meet the mission at Vector as Virginia’s minimum wage has increased gradually from $7.25 to $12 per hour.
“The severe climb from a Virginia minimum wage of $7.25 per hour to $12 per hour has put a big strain on employers like Vector and probably other small ‘for profit’ businesses as well,” Johnston said.
Johnston recognizes that the minimum wage increase for many people is important but fears that people with disabilities may have more difficulty finding employment with the higher pay rates in Virginia.
“As important as this increase has been for many Virginians, I fear that people with significant disabilities will have a hard time finding or maintaining employment,” Johnston told AFP. “I suspect employers have or will have to pick the candidate that can complete the work the fastest and most efficiently and may have little time for accommodations and training.
“That could leave the most vulnerable, although deserving, unable to obtain or maintain employment,” she said.
Another issue, Johnston said, is that some part-time employees receive supplemental income and have caps on how much money they can earn. At $7.25 per hour, they may have been able to work three days a week. At $12 per hour, they have to reduce the hours they work. And if an employee can only work 10 or so hours a week in these situations, the employer may look elsewhere to hire someone who can work more hours.
“I hope we don’t find ourselves back in the day where a special wage certificate is needed again in order to get our citizens with disabilities out working,” Johnson said.
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Crystal Graham
