Dignity in Pay Act Phases Out Subminimum Wage for the Disabled in Illinois

Disabled people in Illinois will no longer be paid a subminimum wage by the year 2029 under a bill signed into law by Illinois Gov. JB Pritzker on Tuesday. The Dignity in Pay Act phases out subminimum wage authorizations in Illinois — as the state joins 18 other states in getting rid of the wage system.

Disabled people in Illinois will no longer be paid a subminimum wage by the year 2029 under a bill signed into law by Illinois Gov. JB Pritzker on Tuesday.

The Dignity in Pay Act phases out subminimum wage authorizations in Illinois — as the state joins 18 other states in getting rid of the wage system. In some cases, disabled workers have made as little as 50 cents an hour or less than $100 per month for a 40-hour work week, according to Access Living. (1)

Under the Dignity in Pay Act, the Illinois Department of Human Services (IDHS), the Illinois Council on Developmental Disabilities (ICDD) and the Illinois Department of Labor (IDOL) will lead a five-year process of eliminating subminimum wages for people with disabilities. While the Act does not specify exactly how Section 14(c) certificates will be phased out, the Dignity in Pay Act amends the Employment and Economic Opportunity for Persons with Disabilities Task Force Act by mandating that the Task Force, along with the ICDD and an academic partner with relevant subject matter expertise, develop a multi-year plan of recommended actions, outcomes, and benchmarks to help the state successfully eliminate the use of certificates authorized under Section 14(c) of the FLSA by December 31, 2029.

To provide assistance to employers during the transition, the Act amends the Department of Human Services Act to create a transition grant program that will make funds available to employers. These grants are designed to support current Section 14(c) certificate holders in integrating individuals with disabilities into competitive employment. In addition, the law provides that the grants will facilitate the development of new opportunities for employees with disabilities, including supported employment, customized employment, entrepreneurship and community-based day programs. The amended Department of Human Services Act requires that the Illinois Department of Human Services provide Governor Pritzker an annual report that incorporates data from each grant recipient and demonstrates the progress made towards eliminating the subminimum wage and creating new employment opportunities to individuals with disabilities. See 20 ILCS 1305/1-95.

Beyond removing subminimum wages, the Act will also:

• Establish a Transition Program for 14(c) providers to receive funding, training, and support to increase work options and discontinue subminimum wage labor;

• Increase the Personal Needs Allowance for 11,000+ Community Integrated Living Arrangement residents to $100 per month (currently at $60), beginning immediately; and

• Appoint at least two additional 14(c) subminimum wage certificate holders to the Task Force responsible for disability employment tracking.

The Dignity in Pay Act also protects means-tested benefits, ensuring that higher wages do not contribute to a person’s ineligibility for disability services and assistance programs.

The Dignity in Pay Act requires that, by July 1, 2025, the Task Force develop the requisite five-year plan to phase out subminimum wages for individuals with disabilities. In the meantime, employers with Section 14(c) authorizations should start planning for the transition and ultimate requirement to pay employees with disabilities the minimum wage. As of January 1, 2025, the Illinois minimum wage is $15.00 per hour. It is expected to increase throughout the years. (2)

Robert Bruno, Director of the Labor Education Program for the University of Illinois, disputed this conclusion in a phone interview with Courthouse News.

"They really do suffer from these lower wages," Bruno said of disabled workers who legally receive sub-minimum wages. "It's just this form of really cheap labor."

Bruno echoed Pritzker's own comments deriding what the governor called an "outdated, tow-tier wage system" at Tuesday's signing ceremony.

"It's frankly embarrassing," Bruno said of the Fair Labor Standards Act's sub-minimum wage carveout for disabled workers. "Their labor is being dramatically undervalued."

To date, Bruno told Courthouse News, more than a dozen states have already phased out sub-minimum wage allowances for disabled workers.

Bruno added that "push-back" from the new Trump administration could complicate the federal labor department phasing out sub-minimum wage allowances for disabled workers nationally.

"It would be consistent with the real conservative, pro-business approach," Bruno said.

Matthew Finkin, a labor law professor also with the University of Illinois, echoed his remarks.

"If you got a labor department that is not sympathetic to equality... it's dead," Finkin said.

Erin Compton, a disability advocate with Down Syndrome and a member of the governor-appointed State Rehabilitation Council for Illinois, nevertheless took the opportunity Tuesday to celebrate the gains she saw in the Dignity in Pay Act.

"This law helps make financial and vocational wellness possible for all. We must work together to build new futures," Compton said at the bill's signing ceremony.

Sources:

1. WBEZ - JB Pritzker Bill Elimination Subminimum Wage People with Disabilities (https://www.wbez.org/politics/2025/01/21/jb-pritzker-bill-elimination-subminimum-wage-people-with-disabilities#:~:text=Disabled%20people%20in%20Illinois%20will,rid%20of%20the%20wage%20system.)
2. Littler - Illinois Elminates Subminimum Wages for Disabled Employees (https://www.littler.com/publication-press/publication/illinois-eliminates-subminimum-wages-disabled-employees)
3. Courthouse News - Pritzker Signs Illinois Law Barring Subminimum Wages For Disabled Workers (https://www.courthousenews.com/pritzker-signs-illinois-law-barring-sub-minimum-wages-for-disabled-workers/)