Federal and State Subminimum Wage Legal and Policy Framework

State Exchange on Employment & Disability

Federal Legal and Policy Framework

Under Section 14(c) of the Fair Labor Standards Act, employers are authorized, after receiving a certificate from the Wage and Hour Division, to pay subminimum wages (SMWs)—wages less than the federal minimum wage—to workers who have disabilities “for the job  being performed.” The certificate also allows the payment of wages that are less than the prevailing wage to workers who have disabilities for the work being performed on contracts subject to the McNamara-O’Hara Service Contract Act (SCA) and the Walsh-Healey Public Contracts Act (PCA).

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Question of the Month: What policies are in place in the Midwest to increase the number of state contracts going to minority- and female-owned businesses?

By Tim Anderson

No state in the Midwest requires that a certain percentage of contracts be given to minority- or women-owned businesses. (Outside the region, Connecticut requires that 6.25 percent of the value of state and local government contracts go to companies owned by women, minorities or disabled individuals.) However, at least three states have specific goals set in statute: Illinois, Ohio and Wisconsin.

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Disabled, and able to work: With legislation and executive actions, states are doing more to improve job prospects of people with disabilities

By Laura Tomaka

For nearly 40 years, South Dakota Rep. Fred Romkema has run a jobs training center for a segment of his state’s population that he says is too often forgotten. About 140 people with disabilities are currently served at the Northern Hills Training Center, and 108 of them are earning a regular paycheck.

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Six states awarded grants to improve employment opportunities for people with disabilities

By Jennifer Burnett

The Department of Labor has awarded $14,837,785 in grants to six states – California, Illinois, Kansas, Massachusetts, Minnesota and South Dakota – to improve employment opportunities for adults and youth with disabilities as part of the Disability Employment Initiative. The initiative awards grants to help increase the participation of adults and youth with disabilities in existing career pathway systems and other programs that bring together educational institutions, the private sector and disability advocates. 

“Breaking down barriers to employment for people with disabilities is important in order for our country to field a full team and ensure that no worker is left behind,” said U.S. Secretary of Labor Thomas E. Perez in a press release. “The federal grants we’re awarding today will help open many more doors to opportunities, providing people with disabilities with skills they need to achieve economic self-sufficiency.”

In particular, those awarded grants will use the funding to: 

  • hire or designate a Disability Resource Coordinator, an expert in workforce and disability issues, to achieve program goals;
  • foster partnerships and collaboration at the state and local levels;
  • integrate resources and services; and
  • ensure that local American Job Centers comply with physical, programmatic and communications accessibility requirements.  

This is the fifth round of grants through the initiative, which has funded 37 projects across 26 states.

To learn more about this initiative, visit the U.S. Department of Labor.

Question of the Month: Do states in the Midwest provide property tax exemptions or credits to disabled veterans?

By Tim Anderson

Stateline Midwest ~ June 2013

Every Midwestern state offers property tax breaks to certain disabled veterans, though the scope and amount of these credits and exemptions vary.

In two Midwestern states, the exemption is not specific to veterans with a disability. Iowa reduces the assessed value of a home (for property tax purposes) by $1,852 for all veterans. In Ohio, an exemption is available for all permanently and totally disabled homeowners; it applies to the first $25,000 of a home’s market value.

Legislation introduced this year in Ohio (SB 27) would provide a total tax exemption for properties owned by veterans who are 100 percent disabled due to an injury or illness that was incurred or aggravated during active military service. This disability rating is determined by the U.S. Department of Veterans Affairs.

Disabled veterans in Michigan qualify for the state’s Homestead Property Tax Credit. Also, homes that have been adapted to meet the needs of a veteran with a 100 percent service-connected disability are totally exempt from property taxes.

Illinois, Indiana and Minnesota offer broader exemptions, giving veterans tax breaks on a sliding scale based on their level of service-connected disability.

An Illinois veteran with a disability of between 50 percent and 69 percent qualifies for a $2,500 reduction in equalized assessed valuation. The reduction is $5,000 for someone with a disability of 70 percent or higher.

Indiana has different categories of property tax exemptions that may apply to disabled veterans. For veterans who served during wartime and have a disability of 10 percent or more, the maximum deduction is $24,960. It rises to $37,440 for veterans who have a disability of 100 percent or who are 62 or older with a disability of 10 percent or more. (Deduction levels are as of 2012.)

In Minnesota, the value of a home (for property tax purposes) is reduced by as much as $300,000 for individuals with a disability of 100 percent. It is cut by $150,000 for a veteran who is not totally or permanently disabled, but who has a disability of 70 percent or higher.

Nebraska uses a sliding income scale to determine the amount of each individual homestead exemption, which is only available to veterans with a 100 percent service-connected disability. Such veterans with incomes of less than $29,801 receive a full exemption. The percentage decreases as income levels rise; no tax relief is provided when income exceeds $36,700.

Like Nebraska, the property tax exemption in South Dakota extends only to those individuals with a 100 percent service-connected disability. The first $100,000 of a home’s value is exempt. 

There is no limit to the amount that can be claimed in Wisconsin, where disabled veterans qualify for an exemption if they meet one of two federal criteria: 100 percent service-connected disabled, or a total inability to maintain gainful employment.

Kansas and North Dakota provide tax relief for veterans with a service-connected disability of 50 percent or more. Kansas offers a maximum tax refund of $300 to individuals with annual incomes of $32,400 or less. North Dakota’s property tax credit for disabled veterans applies to the first $120,000 of a home’s value; the amount varies depending on disability rating.

Veterans as Farmers

By Nancy Vickers

As Americans remember the events and veterans of December 7, 1941 today, another organization seeks to help our service members returning from Iraq and Afghanistan. A recent USA Today article highlighted the work of the Farmer-Veteran Coalition. The national coalition “seeks to help our returning veterans find employment, training and places to heal on America’s farms.”

Here is legislation reviewed by CSG’s Committee on Suggested State Legislation about agricultural operations and sustainable agriculture; a program to help disabled farmers; and a master farmer program to help farmers reduce the environmental impact of their farming operations.

The 2012 Suggested State Legislation volume will include a draft based on Kentucky HB 486, enacted into law in 2010. This legislation enables agricultural operations to incorporate sustainable agricultural practices without necessarily being deemed a nuisance by local ordinances or zoning regulations. The Act requires any administrative regulation promulgated by any agency that establishes standards for harvesting or producing agricultural crops in a sustainable manner be based on practices outlined in the Act. Those are science-based practices that are supported by research and the use of technology, demonstrated to lead to broad outcomes-based performance improvements that meet the needs of the present, and that improve the ability of future generations to meet their needs while advancing progress toward environmental, social, and economic goals and the well-being of agricultural producers and rural communities.

Illinois Public Act 094-216, enacted in 2005, directs the state department of agriculture, in cooperation with the state university extension service, to contract with a non-profit provider to establish and administer a program to help disabled farmers. The 2007 SSL draft is based on the Illinois Act.

Louisiana Act 145 of 2003 establishes a program that is designed to help agricultural producers voluntarily reduce the impact their operations have on the environment. The program would be a cooperative effort between the United States Department of Agriculture, Natural Resources and Conservation Service, the state farm bureau, state university, the state departments of agriculture and natural resources, and soil and water conservation districts. It involves classroom instruction, attendance at model farm field days and development and implementation of farm specific conservation plans. Participating farmers who complete the curriculum are certified as Master Farmers and must submit soil and water conservation plans for their farms to meet certain standards as established by the United States Department of Agriculture, Natural Resources and Conservation Service, the state department of agriculture and the affected soil and water conservation district. Any farmer who has received certification will be presumed to be in compliance with the state soil and water quality requirements as long as their certification is maintained in accordance with best management practices. The Louisiana Act is the basis for a 2005 SSL draft.  

Michigan also established a related program, Michigan Agriculture Environmental Assurance Program. MAEAP is an innovative, proactive program that “helps farms of all sizes and all commodities voluntarily prevent or minimize agricultural pollution risks.”