The Dignity in Pay Act became effective in Illinois on January 1, 2025. Under the Act, the Illinois Department of Human Services (IDHS), the Illinois Council on Developmental Disabilities (ICDD), and the Illinois Department of Labor must implement a five-year process to increase employment opportunities and phase out subminimum wage pay for workers with disabilities.
As of December 31, 2029, employer waivers under Section 14(c) of the federal Fair Labor Standards Act (FLSA) will no longer be permissible in Illinois. Section 14(c) allows employers to pay workers less than minimum wage if their disabilities impact their productivity for their specific work functions. In most cases, subminimum wages amounted to about $3.00 per hour for disabled workers. The other requirements of the the Dignity in Pay Act include the following:
- HFS/IDHS must file a Medicaid waiver amendment with the federal Center for Medicare & Medicaid Services (CMS) to increase small group supported employment rates.
- The Employment and Economic Opportunity for Persons with Disabilities Task Force, ICDD, and an academic partner with subject-matter expertise must establish a multi-year transition program for Section 14(c) providers to increase work options and discontinue subminimum wages for workers with disabilities.
- The transition program will include grant funds for employers with Section 14(c) certificates to integrate workers with disabilities into competitive employment and develop new opportunities for employees with disabilities. These opportunities include supported employment, customized employment, entrepreneurship, and community-based day programs.
- The Governor must appoint at least two additional Section 14(c) subminimum wage certificate holders to the Task Force responsible for disability employment tracking.
- Community Integrated Living Arrangement (CILA) residents are now eligible for an increased Personal Needs Allowance of $100 monthly.
The Dignity in Pay Act affects about two dozen businesses that hold Section 14(c) certificates to pay workers with disabilities less than minimum wage. Illinois becomes the 19th state to eliminate FLSA 14(c) certificates for employers. Section 14(c) certificates have been an option for employers since 1938.
The transition plan established under the Dignity in Pay Act requires the Task Force to take various factors into account, including:
- The number of people with disabilities to be transitioned to competitive employment;
- Creation of meaningful day opportunities for people with disabilities who do not wish to pursue competitive employment;
- Existing state programs designed to support workers with disabilities;
- Capacity limits in current contracts between providers and the IDHS and ICDD;
- The use of technology to enhance opportunities for workers with disabilities;
- The impact of the lack of transportation for individuals with disabilities to access work opportunities;
- The participation of teenagers and young adults with disabilities in activities, Student Transition Employment Programs, and Pre-Employment Transition Services, and their need for future home and community-based adult services;
- Potential changes to state laws, regulations, or policies that protect means-tested public benefits for persons with disabilities;
- Dissemination of information to individuals with disabilities about available work support benefits and programs;
- Ongoing review of rates and reimbursement to support employment-based programs for persons with disabilities; and
- Enhanced service and support needs of aging adults with developmental disabilities.
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