Publication Detail

Policy Brief Series No. 101

Something EPIC is Happening in Virginia: Increasing Competitive Integrated Employment Outcomes for People with Disabilities

Authors: Yin, M., Seo, R., Vu, H., Shaewitz, D., Nadzam, J., & Ford, J.
Published: June 2024 | Policy Brief Series No. 101
Institutions: Northwestern University & Third Sight
Funding: U.S. Department of Education, Grant No. H421D220008
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Key Statistics

120,000

Workers paid subminimum wages under 14(c) certificates (2019)

$3.50/hr

Average earnings for workers under 14(c) certificates

~5%

Of 14(c) workers transitioned to competitive integrated employment

129

Workers remaining in subminimum wage in Virginia (April 2024)

$13.8M

SWTCIE grant awarded to Virginia DARS (5-year)

States awarded federal grants to transition workers to CIE

Overview

Subminimum wage employment limits career prospects for people with disabilities, exploits workers by offering extremely low wages, and constrains their opportunities for community participation and independence. The continued use of subminimum wage labor sits within the broader societal context of disability discrimination in the United States.

In 1938, the Fair Labor Standards Act (FLSA) included Subsection 14(c), a provision specifically designed to allow employers to pay an employee with a disability less than minimum wage. While originally intended to encourage businesses to hire people with disabilities, the outcomes have largely contradicted these goals. The FLSA inadvertently fostered the growth of subminimum wage employers who collectively hired hundreds of thousands of people with disabilities, paying them as little as pennies per day for their labor.

Although there has been a national shift away from subminimum wage employment, most states still maintain policies that perpetuate this practice. In 2022, fourteen states were awarded federal grants to design and implement models to transition people with disabilities into competitive integrated employment (CIE). Virginia's DARS has designed a model to address systemic and individual barriers to achieving CIE, and Northwestern University is leading the evaluation of this model demonstration project.

Key Findings

Evidence from the national landscape and Virginia's transition

Massive scale of subminimum wage employment: In 2019, more than 1,500 employers maintained 14(c) certificate waivers, employing approximately 120,000 people with disabilities at an average of about $3.50 per hour.
Minimal transition to competitive employment: Only about 5% of employees in subminimum wage settings are actively transitioned into competitive integrated employment options.
National decline in 14(c) certificates: From 2010 to 2019, the number of employers authorized to pay subminimum wages was reduced by half, with a corresponding 40% decrease in the number of individuals in those settings.
11 states have eliminated 14(c) certificates: Starting with Vermont in 2002, eleven states have fully eliminated 14(c) certificates, while another six are in the process of phasing out subminimum wage.
Virginia's rapid progress: As of April 2024, Virginia reports only five active employers with 14(c) certificates, collectively employing 129 individuals earning subminimum wages — with several employers opting not to renew in anticipation of the 2030 deadline.
Non-legislative pathways exist: Vermont (2002) and Massachusetts demonstrated that it is possible to eliminate subminimum wage practices without changing state legislation, through administrative and policy adjustments.
CIE offers macroeconomic benefits: Studies show the macroeconomic benefits of achieving competitive integrated employment through customized and supported employment options outweigh the costs of providing these services.

Virginia's Transition from Subminimum Wage Employment

Decline in 14(c) certificate holders and workers since HB 1924 (July 2023)

Source: U.S. Department of Labor, 14(c) Certificate Holders (April 2024); Virginia DARS; GAO (2023). Numbers are approximate where exact historical figures are not available.

The RPRJ EPIC Model

Real Pay for Real Jobs: Education, Partnership Development, Individualized Services, and Capacity Building

Virginia DARS's Real Pay for Real Jobs (RPRJ) EPIC project is designed to continue the state's progression toward competitive integrated employment. The model is being piloted in two regions of Virginia and focuses on both transitioning current subminimum wage workers and "shutting the front door" for youth with complex disabilities who are at risk of entering subminimum wage or sheltered employment.

Education

Adults and students with disabilities receive skills-building support to prepare them for competitive integrated employment. Students and their families engage in peer and family mentoring to build confidence and readiness.

Partnership Development

Vocational rehabilitation counselors (VRCs) engage broad community partners to support the needs and interests of participants. Virginia's No Wrong Door expands information on local services and supports available.

Individualized Services

A person-centered approach using the integrated resource team (IRT) strategy to address the complex barriers faced by people with disabilities seeking employment. Services are tailored to individual needs, skills, and goals.

Capacity Building

Ongoing technical assistance in supported and customized employment for VRCs and employment service organizations (ESOs). Virginia is also testing a value-based purchasing model to incentivize ESOs to work with subminimum wage employees.

"Our goal with the EPIC project is to create a culture in Virginia that truly embodies the idea that Everyone Can Work. As a service system, we have an obligation to ensure that anyone who wants to work has the opportunity to do so with the supports and services necessary to make their dreams a reality."

— Donna Bonessi, Director, Employment Services and Special Programs, Virginia Department for Aging and Rehabilitative Services

State-by-State 14(c) Certificate Policy Status

As of April 2024

Policy Status	States	Count
Eliminated	Alaska, Delaware, Hawaii, Maine, Maryland, New Hampshire, Oregon, Rhode Island, Tennessee, Vermont*, Washington	11
Phase-Out in Progress	California (2025), Colorado (2025), Massachusetts* (2024), Nevada (2028), South Carolina (2024), Virginia* (2030)	6
14(c) Policy in Effect	Alabama, Arizona, Arkansas, Connecticut, DC, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Dakota, Texas, Utah, West Virginia, Wisconsin, Wyoming	35

* State eliminated subminimum wage through non-legislative means. Several states listed under "14(c) Policy in Effect" are also SWTCIE grant recipients working toward elimination.

Evaluation Approach

Northwestern University leads the evaluation of the RPRJ EPIC initiative using a mixed-methods approach. Quantitatively, the team employs a quasi-experimental design using data collection and statistical analysis to measure employment-related outcomes. Qualitatively, the team conducts surveys, interviews, and observations to explore the experiences and perceptions of participants. Northwestern has also developed a sophisticated dashboard that visualizes education and employment outcomes by county for individuals with disabilities in Virginia, utilizing the state's AWARE data system.

Policy Recommendations

Key recommendations from the brief and the federal advisory committee

Build the capacity of service providers to support people with disabilities to achieve competitive integrated employment.
Support youth and adults with disabilities through training, early work experiences, family engagement, use of assistive technology, and systems integration.
Conduct a well-planned phase-out of 14(c) certificates with evidence-based transition strategies that address systemic and individual barriers.
Shift the message for employers to view people with disabilities as valuable employees while incentivizing employment and workplace accommodations.
Address common barriers to employment for those in or at risk of entering subminimum wage, including transportation, housing, healthcare, and assistive technology.
Review federal policies that serve as barriers to CIE, reduce the complexity of federal benefits, and remove punitive policies that prevent gradual transition into competitive wage employment.
Develop and share evidence-based practices and transformative business models with 14(c) certificate holders, state VR agencies, and local workforce agencies.

Citation

Shaewitz, D., Yin, M., Nadzam, J., Seo, R., Vu, H., and Ford, J. (June 2024). Something EPIC is Happening in Virginia: Increasing Competitive Integrated Employment Outcomes for People with Disabilities. Third Sight and Northwestern University. Policy Brief Series No. 101.

Funding

The contents of this Policy Brief were developed under Grant Number H421D220008 from the U.S. Department of Education. The views expressed are those of the researchers and do not necessarily represent the policy of the Department of Education.

Contact

Virginia DARS Grant Manager: John Stewart — John.Stewart@dars.virginia.gov
Northwestern University Evaluation: Dr. Michelle Yin — EPIC@northwestern.edu

Virginia EPIC Project Wage Policy Research All Publications