[Excerpt] The federal government has passed legislation that increases the minimum wage, the first increase in the national minimum wage in a decade. In addition, a number of states have recently increased the minimum wage beyond federal requirements. Given that many individuals with significant disabilities earn wages at or near the minimum wage, they are likely to be impacted by these changes. The increased minimum wage is a welcome opportunity for many individuals to increase their income from working. However, questions may arise regarding the increase in minimum wage, and service providers are encouraged to assist and guide the individuals they support to deal with any concerns they may have. There are additional issues that service providers also must consider, particularly if they pay consumers for work. The purpose of this fact sheet is to help guide service providers in this process

Institute for Community Inclusion

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What are the changes in the national minimum wage and when 
do they take effect?
Over a two year period, the minimum wage will be increasing from  
$5.15/hour to $7.25/hour, in a series of three increments: 
Summer 2007—increase to $5.85/hour
Summer 2008—increase to $6.55/hour
Summer 2009—increase to $7.25/hour
 Updated information on the current minimum wage can be found at: www.
dol.gov/dol/topic/wages/minimumwage.htm
What’s the difference between national and state minimum 
wages and which one applies?
The federal government establishes the national minimum wage, which is 
the minimum pay rate for hourly employees nationally. In addition, states can 
establish their own minimum wage rates. When the federal and state laws 
have different minimum wage rates, the higher rate applies. Some states have 
minimum wage rates that are significantly higher than the national rate. A list of 
state minimum wages can be found at: www.dol.gov/esa/minwage/america.htm
Do all employers have to pay the federal minimum wage?
While many employees are covered by the Federal Labor Standards Act 
(FLSA) and subject to the federal minimum wage requirements, there are 
some employees who are not. As the exemptions are narrowly defined, 
employers should check the exact terms and conditions for each by 
contacting their local U.S. Department of Labor Wage and Hour Division 
office (listing available at: www.dol.gov/esa/contacts/whd/america2.htm). 
Examples of employees exempt from both the minimum wage and overtime 
pay requirements include: executive, administrative, and professional 
employees, and outside sales employees. Additional categories and details 
regarding employees who are covered and not covered are available at: www.
dol.gov/compliance/guide/minwage.htm
Note: Even if an employee is not covered under the federal minimum wage law, 
they may be covered under your state’s minimum wage law.
Impact on public benefits for consumers
Concerns regarding the impact of wages from employment on public benefits, 
such as Social Security Disability Insurance (SSDI), Supplemental Security 
Income (SSI), Medicare, and Medicaid, are an ongoing issue for many individu-
als and families. The increase in minimum wage is potentially going to increase 
this concern. Service providers are encouraged to be anticipatory and pro-active 
regarding the increase in the minimum wage to address concerns over impact 
on benefits. Via program and agency communication mechanisms (meetings, 
newsletters, informal conversations, etc.), it is important to stress the following:
The increase in minimum wage is a welcome opportunity for individuals 
earning less than the new minimum wage to increase their income 
through wage payments.
If there are concerns regarding the impact of increased income on public 
benefits an individual receives, these can be addressed. 
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The InsTITuTe BrIef Issue no. 22 • June 2007
Minimum Wage Increase: A Guide for Disability Service Providers
The federal government has passed legislation that increases the minimum wage, the first 
increase in the national minimum 
wage in a decade. In addition, a 
number of states have recently 
increased the minimum wage beyond 
federal requirements. Given that 
many individuals with significant 
disabilities earn wages at or near 
the minimum wage, they are likely 
to be impacted by these changes. 
The increased minimum wage is 
a welcome opportunity for many 
individuals to increase their income 
from working. However, questions 
may arise regarding the increase in 
minimum wage, and service providers 
are encouraged to assist and guide the 
individuals they support to deal with 
any concerns they may have. There are 
additional issues that service providers 
also must consider, particularly if they 
pay consumers for work. The purpose 
of this fact sheet is to help guide 
service providers in this process.
www.communityinclusion.org
This issue of The Institute Brief is a product 
of the Institute for Community Inclusion (ICI) 
at the University of Massachusetts Boston, 
with input from the State Employment 
Leadership Network (SELN). This issue was 
written by David Hoff.
For more information contact David Hoff:  
617.287.4308 (v); 617.287.4350 (TTY); 
david.hoff@umb.edu
State Employment Leadership Network
This publication will be made available 
in alternate formats upon request.
 • Minimum Wage Increase: A Guide for Disability Service Providers
The agency or program will assist individuals 
and their families to fully understand the impact 
of increased income on their public benefits and 
guide them in any steps necessary to ensure they 
maintain necessary benefits while enjoying the 
benefits of the increased minimum wage.
The solution to the increase in minimum wage 
should not be to request a reduction in work hours 
or to voluntarily stop working.
Given how complicated benefit issues are, service 
providers are urged to avail themselves of expertise 
currently available regarding the impact of income on 
public benefits. If the program has not already done 
so, it is strongly recommended that the agency link 
with the Work Incentives Planning and Assistance 
(WIPA) project that serves their area. The WIPA projects 
(formerly known as Benefit Planning Assistance & 
Outreach or BPAOs) are funded by the Social Security 
Administration, and have Community Work Incentives 
Coordinators (CWICs) who are experts on benefit 
issues. These CWICs are available to assist individuals 
and their families in accurately determining the impact 
of increases in income on benefits, and how to use 
work incentives to ensure that individuals maintain 
their access to necessary public benefits. CWICs can 
work in conjunction with disability providers on these 
issues to ensure there is accurate and consistent 
information provided. To find out which WIPA program 
serves your area, go to: www.socialsecurity.gov/work/
ServiceProviders/WIPADirectory.html
What will be the impact of the minimum wage 
increase on consumer benefits?
Calculating the impact of wage increases on public 
benefits can be complicated. The information below 
is provided as a basic guideline to get started. There 
are other publications and materials available that 
discuss these issues in much greater length (see the 
Social Security Red Book—www.ssa.gov/redbook, and 
the resource section at the end of this publication). If a 
consumer has concerns about the impact of wages on 
benefits, as noted above, it is strongly recommended 
they consult with their local WIPA. The following offers 
some general guidelines for providers and consumers. 
Impact on cash benefits
If the individual receives cash benefits from SSDI: If 
the consumer receives a check through Social Security 
Disability Insurance (SSDI), they need to determine if 
their income will increase to more than the Substantial 
Gainful Activity (SGA) amount, which is $900 in 2007 
($1,500 if you are blind). If so, there is a possibility 
that they will no longer receive a Social Security 
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check. However, make sure the consumer does not 
automatically assume their SSDI check will stop, as 
this may not be the case. If the loss of this check is of 
concern, they should contact their local WIPA program, 
to determine if and when their SSDI check may stop, 
and whether there are ways they can use work incentives 
(such as Impairment Related Work Expenses—IRWE, or 
Blind Work Expenses—BWE), to keep them eligible for 
an SSDI check. 
If the individual receives cash benefits from SSI: If 
the consumer receives a check through Supplemental 
Security Income (SSI), under section 1619 (a), the 
individual can earn above the SGA. For every $2.00 
increase in monthly income, the consumer’s monthly SSI 
check will be reduced by $1.00. Although their SSI check 
will be less, their overall monthly income will increase.
Impact on medical benefits
Even if cash benefits end as a result of increased wages, 
this does not mean medical benefits will end. 
Medicare—If monthly income increases above the SGA 
amount so that the consumer no longer receives a SSDI 
check, they will still continue to be eligible for Medicare 
medical insurance for 7 years. At the end of this time 
period, they can then purchase Medicare hospital 
insurance for a monthly premium. If the consumer 
cannot afford to pay this premium, they may be eligible 
for state assistance under the Qualified Disabled and 
Working Individuals (QDWI) program.
Medicaid—Most people on SSI are typically covered 
under Medicaid. Even when a consumer stops receiving 
an SSI check, they can still keep their Medicaid coverage 
until their income exceeds the annual “threshold” 
amount under what is known as 1619(b). This threshold 
amount varies quite a bit state-by-state. In 2007, the 
threshold ranges from approximately $25,000 to 
$50,000. A full list of state thresholds is available at www.
ssa.gov/disabilityresearch/wi/1619b.htm. In addition, 
many states will allow individuals who earn more than 
the threshold, to purchase Medicaid for a relatively low 
cost through what is known as “Medicaid Buy-In”. A 
chart of the status of Medicaid Buy-In in each state is 
at: www.uiowa.edu/~lhpdc/work/map.html. You should 
contact your state Medicaid office for the most up-to-date 
information for your state regarding the Medicaid Buy-In.
Other benefits
If the consumer receives other public benefits (such 
as subsidized housing or food stamps), these may be 
impacted by increases in wages. The impact on these other 
benefits can be discussed with staff from your local WIPA 
project, or other benefits experts, as well as personnel at 
the program from which they receive benefits. 
Institute for Community Inclusion, UMass Boston  • 
Remind and assist consumers to report 
income changes
If a consumer’s income increases as a result of the 
minimum wage increase, remind them that they need 
to report the change in income to Social Security 
and any other public benefit programs that require 
them to report income changes. Service providers are 
encouraged to assist consumers in this process as 
necessary. Ultimately, the individual or their payee, not 
the service provider that supports them, is responsible 
for reporting income changes. However, if an individual 
decides they do not want to report their increases 
in income, remind them that through the federal 
government wage reporting systems, public benefit 
programs do eventually receive information on wage 
increases. If the consumer fails to report changes in 
income, they could end up paying money back to Social 
Security or other public benefit programs, for benefits to 
which they were not entitled.
Impact on consumer wages paid by agency
If your program or agency pays consumers directly as a 
result of subcontracts with businesses (such as a work 
crew or enclave, or sheltered workshop) you will need to 
adjust pay rates for any individuals making less than the 
new minimum wage. For individuals receiving sub-mini-
mum wage under Section 14(c), wage rates will need to 
be adjusted, so that the proper wage for the individual’s 
production rate is maintained. The federal requirements 
regarding adjusting sub-minimum wage when the federal 
or state minimum wage increases can be found at: www.
dol.gov/esa/whd/FOH/ch64/64g05.htm.
The US Department of Labor will send out notification 
regarding the changes in minimum wage, and will monitor 
to ensure that changes are properly implemented.
Impact on subcontracts
In conjunction with the adjustments in wages paid 
directly to consumers, your agency will need to consider 
adjustments to contract and unit rates charged to 
businesses, to ensure that the agency is able to cover 
the cost increases resulting from the change in wage 
rates for consumers. 
Making sure that employers comply with the 
new minimum wage
In your communication with consumers, be sure they 
are aware of the changes in minimum wage, and that 
if they are earning below the new minimum wage, 
they should see an increase in their paycheck. Advise 
consumers that if they notice their rate of pay has not 
increased after the date that the change in minimum 
wage goes into effect, or have other questions about 
how the change in minimum wage will impact their 
paycheck, they should talk to their employer. Service 
providers are encouraged to guide consumers in this 
process, and advocate on behalf of the consumer with 
the employer as appropriate.
What if an employer refuses to pay the 
minimum wage increase?
It is very unlikely, but possible, that an employer 
may ignore the minimum wage increase or tell the 
consumer that they are not entitled to it. If this occurs, 
with the consumer’s permission, it is suggested that 
the disability service provider contact the employer to 
discuss the issue, and advocate on the consumer’s 
behalf. If this does not resolve the issue, the Wage 
and Hour Division of the US Department of Labor 
can be contacted at 1-866-4USWAGE. Local offices for 
the Wage and Hour Division are located throughout 
the United States. A listing can be found at: www.dol.
gov/esa/contacts/whd/america2.htm. The state’s labor 
department can also be contacted. A listing of state 
labor departments is at: www.dol.gov/esa/contacts/
state_of.htm
Potential employer concerns
Given that many individuals with significant disabilities 
earn at or near the minimum wage, with the increase 
in minimum wage, there may be concern regarding 
whether an employee is still providing sufficient 
value to an employer in exchange for the work they 
perform. Such concerns are usually unfounded, and 
it is recommended that service providers not initiate 
conversations with employers regarding this. Why 
create a problem when none exists? At the same, service 
providers should stay attuned to whether there are any 
employer concerns in this regard.
If the consumer is laid off or work hours are 
reduced
It is unlikely but possible that an employer will cut back 
a consumer’s hours or lay them off as a result of the 
minimum wage increase. Employers have the right to 
take such action, but it is important to ensure that the 
individual’s rights are protected. While employment 
discrimination can be difficult to prove, the following 
should be considered in determining a course of action:
Is the employee the only individual whose hours are 
being cut or being laid off?
Are only employees with disabilities having their 
hours cut or being laid off?
Have there been any issues in the past regarding 
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the employee’s performance? (If 
the employer is suddenly identifying 
performance issues which were not 
mentioned previously, and using those as 
the reason for a lay off, that is a red flag.)
If there are any concerns regarding whether 
an individual has been singled out as a 
result of their disability (either consciously 
or unconsciously), it is important to assist 
individuals in advocating on their own 
behalf, or if appropriate, to advocate for 
them. Direct confrontations or accusations 
of discrimination should be avoided, but the 
following areas of inquiry may be useful:
How many other employees are being laid 
off or having their hours cut? What types of 
jobs do they perform?
What is the underlying reason(s) for this 
action?
What are the employer’s personnel policies 
regarding layoffs or hour reductions, and 
have all these procedures been followed?
If the individual is a member of a union, 
have all the proper union procedures been 
followed, and can the union assist in  
some way?
Within such discussions, consumer and 
service providers should focus on whether 
there are options for changing the employers 
mind in laying the individual off or cutting 
back hours. Obvious points to be made 
include citing the employee’s performance, 
reliability, etc. (assuming these have been 
positive). In addition, it may be possible 
to identify ways that increase the value 
of the employee to the employer, such as 
rearrangement of job duties and job tasks, or 
increased support from the provider agency to 
increase the productivity of the individual and 
train them on additional tasks. 
In cases where it appears that the individual 
has been discriminated against as a result 
of their disability, the individual may wish to 
file a complaint with the Equal Opportunity 
Employment Commission (www.eeoc.gov) or 
their state labor department, and/or contact 
legal advocates, such as their local Protection 
and Advocacy Organization (www.ndrn.org). 
See the resource section for additional contact 
information. Even if the consumer does not 
plan to file a complaint, if there are concerns, 
it is at least worth a discussion with a legal 
advocate for advice and feedback, and to 
determine potential courses of action.
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Resource Section
Social Security Administration
Voice: 1-800-772-1213, TTY: 1-800-325-0778
Employment Support Programs: www.ssa.gov/work
Changes in wages can be reported by calling Social Security. The 
website also has extensive information and resources regarding 
work incentives and impact of income on employment.
Work Incentives Planning and Assistance projects: These projects 
can provide expert assistance regarding the impact of income 
on benefits. Listing is available at: www.socialsecurity.gov/work/
ServiceProviders/WIPADirectory.html
Minimum Wage Information
Information on the federal minimum wage is available from the 
Wage and Hour Division of the US Department of Labor. 
1-866-4USWAGE
The following have information about the minimum wage:
o www.dol.gov/compliance/guide/minwage.htm#Relation
o www.dol.gov/esa/minwage/q-a.htm
Information on state minimum wage rates is available at:   
www.dol.gov/esa/minwage/america.htm
Information on minimum wage for your state should also be 
available from your state labor departments. A listing is available at: 
www.dol.gov/esa/contacts/state_of.htm
ADA and Disability Rights
National Disability Rights Network
900 Second Street, NE, Suite 211, Washington, DC 20002
Voice: (202) 408-9514, Fax: (202) 408-9520
email: info@ndrn.org, website: www.ndrn.org
Membership organization for Protection and Advocacy (P&A) 
Systems for individuals with disabilities. Location of the P&A in 
your local area can be found by contacting NDRN; a listing is 
also available on the website. P&As can be helpful resources on 
employment rights and other disability-related legal issues.
Equal Employment Opportunity Commission (EEOC)
1801 L. Street, Washington, DC 20507 
Voice: (800) 669-4000, TTY: (800) 669-6820
Fax: (513) 791-2954, website: www.eeoc.gov
ADA information and information on how to file complaints.
Additional publication on Social Security Benefits:
Making It Easier to Go to Work: What the Changes at Social 
Security Mean to You – A user-friendly guide on Social Security 
benefits for people with disabilities, Medicare, Medicaid, and 
related issues, and how income from employment impacts 
benefits. www.communityinclusion.org/article.php?article_id=56
»
This document was supported in part by cooperative agreement #90ND00204 from the Administration 
on Developmental Disabilities, Administration for Children and Families, U.S. Department of Health 
and Human Services. Points of view or opinions do not necessarily represent official Administration on 
Developmental Disabilities policy.


Minimum Wage Increase: A Guide For Disability Service Providers

[Excerpt] The federal government has passed legislation that increases the minimum wage, the first increase in the national minimum wage in a decade. In addition, a number of states have recently increased the minimum wage beyond federal requirements. Given that many individuals with significant disabilities earn wages at or near the minimum wage, they are likely to be impacted by these changes. The increased minimum wage is a welcome opportunity for many individuals to increase their income from working. However, questions may arise regarding the increase in minimum wage, and service providers are encouraged to assist and guide the individuals they support to deal with any concerns they may have. There are additional issues that service providers also must consider, particularly if they pay consumers for work. The purpose of this fact sheet is to help guide service providers in this process.min_wage_dis_providers.pdf: 248 downloads, before Oct. 1, 2020

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Minimum Wage Increase: A Guide For Disability Service Providers

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