On January 21, 2025, Governor JB Pritzker signed the Dignity in Pay Act (HB793) into law. The Dignity in Pay Act mandates that subminimum wage authorizations otherwise authorized under federal law be phased out and completely eliminated in Illinois by December 31, 2029. 

Section 14(c) of the Fair Labor Standards Act (FLSA) allows certain employers to pay individuals with disabilities less than the federal minimum wage if the individual’s disability impacts their productivity for the specific work being performed. Illinois joins 18 other states that have eliminated the use of Section 14(c) authorizations.

Under the Dignity in Pay Act, the Illinois Department of Human Services (IDHS), the Illinois Council on Developmental Disabilities (ICDD) and the Illinois Department of Labor (IDOL) will lead a five-year process of eliminating subminimum wages for people with disabilities. While the Act does not specify exactly how Section 14(c) certificates will be phased out, the Dignity in Pay Act amends the Employment and Economic Opportunity for Persons with Disabilities Task Force Act by mandating that the Task Force, along with the ICDD and an academic partner with relevant subject matter expertise, develop a multi-year plan of recommended actions, outcomes, and benchmarks to help the state successfully eliminate the use of certificates authorized under Section 14(c) of the FLSA by December 31, 2029.

To provide assistance to employers during the transition, the Act amends the Department of Human Services Act to create a transition grant program that will make funds available to employers. These grants are designed to support current Section 14(c) certificate holders in integrating individuals with disabilities into competitive employment. In addition, the law provides that the grants will facilitate the development of new opportunities for employees with disabilities, including supported employment, customized employment, entrepreneurship and community-based day programs. The amended Department of Human Services Act requires that the Illinois Department of Human Services provide Governor Pritzker an annual report that incorporates data from each grant recipient and demonstrates the progress made towards eliminating the subminimum wage and creating new employment opportunities to individuals with disabilities. See 20 ILCS 1305/1-95.

Beyond removing subminimum wages, the Act will also:

• Establish a Transition Program for 14(c) providers to receive funding, training, and support to increase work options and discontinue subminimum wage labor;

• Increase the Personal Needs Allowance for 11,000+ Community Integrated Living Arrangement residents to $100 per month (currently at $60), beginning immediately; and

• Appoint at least two additional 14(c) subminimum wage certificate holders to the Task Force responsible for disability employment tracking.

The Dignity in Pay Act also protects means-tested benefits, ensuring that higher wages do not contribute to a person’s ineligibility for disability services and assistance programs.

The Dignity in Pay Act requires that, by July 1, 2025, the Task Force develop the requisite five-year plan to phase out subminimum wages for individuals with disabilities.  In the meantime, employers with Section 14(c) authorizations should start planning for the transition and ultimate requirement to pay employees with disabilities the minimum wage. As of January 1, 2025, the Illinois minimum wage is $15.00 per hour. It is expected to increase throughout the years.