The U.S. Department of Labor (DOL) has announced it is withdrawing its previously proposed rule that would have phased out the issuance of subminimum wage certificates authorized under Section 14(c) of the Fair Labor Standards Act (FLSA). The proposed rule, initially published in December 2024, aimed to amend 29 CFR Part 525 to phase out the use of special wage certificates for workers with disabilities.

This withdrawal means Section 14(c) certificates remain in effect, and DOL will continue to issue and renew them as authorized by federal law.

Rationale for Withdrawal:

After receiving more than 17,000 comments — including strong opposition from Members of Congress, service providers, individuals with disabilities, and their families — the DOL determined:

• It lacks clear statutory authority to unilaterally eliminate a program that Congress has explicitly mandated.
• Section 14(c) uses the word “shall”, not “may,” indicating a mandatory duty for the Department to provide for the issuance of certificates “to the extent necessary to prevent curtailment of employment opportunities.”
• The continued use of 14(c) certificates by over 40,000 workers as of 2024 indicates ongoing need.
• Eliminating the program without Congressional action could result in unintended disruptions to employment and disability support services.

Impact on Providers:

• Employers currently operating under valid 14(c) certificates may continue to do so, subject to existing legal requirements.
• The DOL has no immediate plans to change the regulatory framework of 29 CFR Part 525.
• A future rulemaking process could still be initiated, but any substantive changes would likely require Congressional action.

The full text of the rescission can be found here.