These Workers May Get a Higher Minimum Wage — How Would It Affect You?

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In the last days of the Biden Administration, the U.S. Department of Labor has floated a proposal that would end the practice of paying disabled workers less than the minimum wage.

The national minimum wage is $7.25 per hour. However, a Depression-era program allows the federal government to issue certificates to businesses, allowing them to pay certain disabled workers less to boost employment among disabled workers. Currently, the program affects more than 37,000 disabled laborers in 37 states.

“It means more spending power for disabled workers, which is great for local businesses,” said Alex Freeburg, a personal injury and criminal defense lawyer who has worked with clients facing life-altering injuries and disabilities.

“They can spend beyond just their needs and buy more things they want but hold back on — like groceries, clothes or even a night out. More money in their hands means more money flowing through the community.”

So, these workers may get a higher minimum wage. How would it affect you?

Impact on Social Security

The answer depends on who you ask, and the impact of eliminating the subminimum wage on your wallet depends on how you view earmarking taxes to finance state and federal government programs that support disabled workers.

Freeburg and other proposal supporters said increasing wages for disabled workers could lighten the load on Social Security programs, which are generally supported by payroll taxes paid for by employers and employees.

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For example, according to the Center on Budget and Policy Priorities, a nonpartisan think tank, an estimated 7.3 million disabled people in 2023 received Social Security Disability Insurance (SSDI) as part of their Social Security benefits, totaling $152 billion.

“When disabled folks are earning a decent wage, they’re contributing to taxes instead of relying on government support programs,” Freeburg said. “If disabled individuals are earning enough to support themselves without relying heavily on government assistance, it could free up funds for others who truly need them and help create a more sustainable system overall.”

However, an unintended consequence is disabled workers could lose needed federal government benefits if they earn more than the limit for substantial gainful activity (SGA), which equaled $1,550 per month in 2024.

In California, for example, the minimum wage is going up to $16.50 per hour in 2025, while the national minimum wage is $7.25. Under the proposal, a disabled person in California would be limited to working four hours per day before they reach SGA, said Judi Uttal, president of the Orange County (California) Asperger’s Support Group and founder of the nonprofit Autism in Entertainment.

“Once they reach SGA, they can lose their Social Security benefits, which in turn will cause them to lose income as well as health insurance,” Uttal said.

Impact on Businesses

Another unforeseen impact on businesses would be if the subminimum wage were eliminated.

According to the latest data from the U.S. Bureau of Labor Statistics, nearly 23% of people with disabilities were employed, the highest number recorded since 2008.

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“The widespread misconception perpetuated by businesses is that small companies will no longer be able to operate without employing individuals earning a subminimum wage,” said Camron Dowlatshahi, co-founder and lead partner at MSD Lawyers, whose practice includes employment and personal injury cases. “This is completely false and proven so in states that have already banned it.”

Businesses would have three years to increase wages for disabled employees. Dowlatshahi said companies should adapt by providing adequate training, treating disabled workers fairly, and giving them ownership of their work.

He explained, “So they will do better work, contribute to the growth of the business and help the financial viability of the company.”

However, Uttal said business ideals don’t often reflect the daily lives of some disabled workers.

“An expected impact is that small businesses who employ disabled workers may need to reduce the number of employees that they are able to hire,” Uttal said. “When organizations are forced to pay minimum wage, then individuals with disabilities can be forced to compete against the non-disabled worker and have a difficult time finding employment.”

Nevertheless, the proposal’s future is uncertain. The new rule wouldn’t take effect until Jan. 17, just days before President-elect Donald Trump begins his second term. His administration could decide whether to scrap or implement the proposal.

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