Nicholas Costanzo, 31, rings up a customer at the Golden Scoop, an ice cream and coffee shop in Overland Park, Kan. Photo by Kevin Hardy/Stateline.
ST. PAUL (Minnesota Reformer) – A bill backed by Gov. Tim Walz to phase out subminimum wages for disabled workers by 2028 barely made it out of the Senate Labor Committee on Tuesday, signaling it’s unlikely to make it to the governor’s desk this year.
Under a federal program known as 14(c) created in the New Deal of the 1930s for disabled soldiers, certain employers can pay less than minimum wages to disabled workers based on their productivity, usually for repetitive tasks like shredding documents or stuffing greeting cards in plastic sleeves in sheltered work environments. Most of these employers are organizations that also provide disability services and supervision.
Opponents of the program, including disability rights groups, argue the practice is demeaning and exploitative while often trapping disabled people in menial jobs.
“Subminimum wage is an antiquated system that has continued to survive due to so many ideas that simply aren’t true, the worst of which is that people aren’t capable of more,” Jillian Nelson, policy director at the Autism Society of Minnesota, told the Senate Labor Committee on Tuesday.
But supporters of the program, including many parents of severely disabled workers, say their children truly aren’t capable of landing a job in the mainstream workforce. If they were, they would already be working for higher wages.
They argue eliminating the subminimum wage will shutter work programs for disabled people, depriving their children of a meaningful experience and the opportunity to earn any wages.
James Clapper told the Senate Labor Committee his son, Bob, has made incredible strides in his skills and productivity in the 17 years he’s worked under the 14(c) provision, and his hourly wage has increased accordingly from about $2.35 to a little over $9.
“He does require close supervision and has very limited language skills so probably has reached his potential,” Clapper said. “If 14(c) is eliminated in Minnesota, he will not likely make it to competitive integrated employment and may end up in just life enrichment and volunteer work only, which is unacceptable.”
At least 16 states have already eliminated the subminimum wage, while the Biden administration proposed phasing out issuing 14(c) licenses.
Minnesota has been moving toward eliminating the program as well, with a state Task Force to Eliminate Subminimum Wages recommending the Legislature end the practice by Aug. 1, 2025. The number of people paid a subminimum wage has been on the decline in recent years — now just over 3,000 workers in Minnesota — in large part because of a concerted effort to move disabled people into mainstream jobs.
Some employment service providers like Richfield-based Lifeworks have voluntarily exited the 14(c) program and instead focus on supporting disabled workers in finding and maintaining jobs in the mainstream workforce.
Keeri Tramm, director of disability initiatives at LifeWorks, told lawmakers that after the organization made the transition in 2017, some workers moved to competitive employment while others chose to retire or pursue non-work activities. Just one person opted to continue with subminimum wages through a different provider, Tramm said. Last year, the organization helped more than 500 people find or maintain work, with new hires earning on average more than $15 an hour.
Yet Republicans and some Democrats remained skeptical that the 14(c) program should be eliminated altogether if it means ending work opportunities for the most severely disabled.
“I want to make sure that these folks have an option to get in the door to employment,” said Sen. Grant Hauschild, DFL-Hermantown, before voting with Republicans on an amendment that would have effectively killed the proposal.
The bill (SF2149), authored by Sen. Jen McEwen, DFL-Duluth, was sent to the health and human services committee without a recommendation for its passage.
Bill would let union workers to pay dues to anyone
Five Minnesota House Republicans introduced a bill to let union members send their dues to any “national, state or local organization of their choice.”
It’s a unique variation on so-called right to work laws, enacted in 26 other states, that make paying union fees optional. In Minnesota, private sector workers covered by union labor agreements must at least pay “fair share fees” to support the cost of the union’s collective bargaining.
The bill (HF2240) is certain to fail in an evenly divided House and Democratic-controlled Senate but nevertheless sends a message about Republicans’ priorities should they win control of state government. Republicans have enjoyed a growing base of support among working-class voters even while sticking to a traditionally conservative policy agenda on unions, the minimum wage and worker safety laws.
Labor leaders say the bill is an attempt to hurt unions by siphoning away funds they use to negotiate contracts, challenge unfair labor practices, organize new workers and lobby for worker-friendly legislation.
“What it comes down to is they want less power for unions,” said Brad Lehto, secretary-treasurer of the Minnesota AFL-CIO.
Proponents of right to work say requiring workers to pay any fees as a condition of employment at a unionized job infringes on workers’ freedoms and forces them to bankroll political activities they may not agree with.
The bill’s lead author, Rep. Ben Bakeberg, a Republican school administrator from Jordan, was not available for comment.
The bill includes public sector workers, although it would have no meaningful effect on them. In 2018, the U.S. Supreme Court ruled in Janus v. AFSCME that public employees could not be required to pay union fees because it infringed on their right to free speech.
Since then, public sector unions have seen a significant drop in membership, though not as much as expected and they continue to be an influential force. About one-third of public-sector workers are union members nationally, about five times as high as the private sector, according to the Bureau of Labor Statistics.
Public sector unions have also seen a surge in new members since the Trump administration launched an unprecedented assault on the size of the federal workforce, with the American Federation of Government Employees growing to a record size.
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