Federal officials are giving employers the green light to continue paying many workers with disabilities less than minimum wage.

The Trump administration is withdrawing a proposed rule that sought to phase out what’s known as subminimum wage employment.

Under a federal law dating back to 1938, employers can obtain special 14(c) certificates from the U.S. Department of Labor allowing them to pay workers with disabilities less than the federal minimum of $7.25 per hour. The proposal put forth by the Biden administration late last year called for the Labor Department to stop issuing new 14(c) certificates and to phase out existing ones within three years.

The Biden administration cited a sharp drop in the number of workers earning subminimum wage and “vastly expanded” employment opportunities for individuals with disabilities in moving to end the program.

Now, however, the Trump administration has reached a different conclusion.

In a notice published in the Federal Register this week, the Labor Department indicated that it is pulling the proposed rule. The agency pointed to concerns from Republicans in Congress that the Labor Department does not have the statutory authority to unilaterally do away with 14(c) certificates and rejected the Biden administration’s preliminary assessment that the certificates are no longer necessary.

“While the department cited a substantial decline in the use of section 14(c) certificates — from approximately 424,000 workers in 2001 to approximately 40,579 in 2024 — this decline does not establish that no current need remains,” the notice indicates. “To the contrary, the continued existence of tens of thousands of workers utilizing the section 14(c) program suggests a nonzero population for whom section 14(c) remains necessary. That inference is bolstered by comments asserting that many individuals with significant disabilities would face unemployment, underemployment, or loss of ancillary services if 14(c) options were eliminated.”

The move is a blow to many disability advocates who have spent years calling for an end to subminimum wage. They say the practice can lead to exploitation, with some workers earning less than $1 per hour, and stifle opportunities for individuals to fully engage in the community.

“We’re deeply disappointed to see the administration take this action,” said Colin Killick, executive director of the Autistic Self Advocacy Network. “Ending 14(c) and committing to competitive integrated employment is very much a bipartisan issue, something we’ve seen not only in Congress, but at the state level, where we’ve seen not just states like California, Illinois and Oregon ban subminimum wage, but also Tennessee, South Carolina and Alaska.”

At least 16 states have passed laws to phase out subminimum wage in recent years, according to the National Down Syndrome Society, and research suggests that the move has largely yielded positive outcomes.

“We remain encouraged by the building momentum at the state level, including recent efforts in New York, and we are confident that the end of 14(c) at the national level is a matter of when, not if,” Killick said.

However, officials with VOR, which advocates for individuals with intellectual disabilities and their families, welcomed the Labor Department decision to keep 14(c) certificates available.

“We need to maintain and support a diverse set of options for meaningful daily activities, including but not limited to competitive integrated employment, compensatory wage programs, day programs, and farmsteads,” Hugo Dwyer, VOR’s executive director, and Joanne St. Amand, the group’s president, wrote in a letter thanking the Labor Department for withdrawing the rule. “Sheltered workshops and 14(c) programs are an important part of this spectrum of employment opportunities, and they serve a particular cohort of individuals on the spectrum.”