WIOA Limitations on the Use of Subminimum Wage
(also known as "WIOA Section 511")
Subminimum wage (less than the federal minimum wage) is allowable when an employment or day service provider holds a special 14(c) certificate from the U.S. Department of Labor. While the Workforce Innovation and Opportunity Act (WIOA) Section 511 does not prohibit the use of subminimum wage, it did set forth, beginning on July 22, 2016, requirements for youth with disabilities who are 24 and younger as well as anyone currently earning a subminimum wage.
For Youth Ages 24 and Under
WIOA requires youth ages 24 and under to have documentation that they completed the following actions before they can earn a subminimum wage:
- participated in Pre-Employment Transition Services (Pre-ETS) and/or special education transition services and activities while still in high school and eligible for services under the Individuals with Disabilities Education Act (IDEA), and
- applied for VRS and determined ineligible or found eligible but unsuccessful in competitive, integrated employment and their VRS case was closed, and
- received career counseling, information, and referral to resources that could assist in securing competitive, integrated employment.
VRS counselors will work with schools to coordinate informed choice meetings with students and parents/authorized representatives who are considering subminimum wage positions. Ideally, school and county case managers would also participate in these meetings so that supports and services are coordinated. VRS counselors will explain WIOA requirements, review available options, and provide an opportunity for the student to apply for VR services.
WIOA also restricts schools from contracting for subminimum wage. It states: "Neither a local nor State educational agency can enter into a contract or other arrangement with an entity for the purpose of operating a program for a youth under which work is compensated at a subminimum wage."
For Those Currently Earning a Subminimum Wage
WIOA requires persons who currently earn a subminimum wage job to receive from VRS (or its contracted designee) career counseling and information that facilitates independent decision making and informed choice. This process must occur every six months of the person's first year of making a subminimum wage and annually thereafter.
VRS has contracts with the Eight Centers for Independent Living across Minnesota to meet 1:1 annually with individuals to provide career counseling, information, and referral services with the goal of having a meaningful conversation about work. A person then will make an informed choice to indicate their preference for work:
- No: stay in current employment (continue to earn subminimum wage)
- Yes: CIL staff will coordinate a meeting with the individual and their support team to identify and implement the next steps towards competitive, integrated employment
The pre-employment transition services provided under the VR program are funded by a grant from the U.S. Department of Education with a state match. For federal fiscal year 2020, the total amount of federal grant funds used for these services is $6,374,138 (78.7 percent). The state appropriation indirectly supports the pre-employment transition spending and amounts to $1,725,148 (21.3 percent).