Transformation to Competitive Integrated Employment Act
- Bill Number
- H.R. 4771
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Labor and Employment
- Status
- Introduced
- Latest Action
- 2025-07-25: Referred to the House Committee on Education and Workforce.
- Last Updated
- 2026-06-10T08:08:11Z
AI-Generated Summary
Purpose of the Legislation
The Transformation to Competitive Integrated Employment Act aims to help employers who use special certificates under section 14(c) of the Fair Labor Standards Act of 1938 (FLSA)—which allow paying workers with disabilities below the standard minimum wage—shift their operations to models that provide competitive integrated employment (CIE). CIE means jobs in typical community settings where workers with disabilities earn fair wages comparable to non-disabled peers and have opportunities for advancement. The act promotes stakeholder involvement, transitions workers to better jobs and community services, shares successful models, and supports states in updating plans to improve employment outcomes for people with disabilities.
Key Provisions
- Title I: Competitive Integrated Employment Transformation Grant Programs
- Authorizes the Secretary of Labor to award competitive grants to states (Sec. 102) and eligible employers/certificate holders (Sec. 103) to fund business and program changes toward CIE.
- State grants (up to $10 million over 5 years, minimum $2 million) require applications detailing current 14(c) usage, transformation plans, timelines, stakeholder engagement, and evaluations. States must form advisory councils with diverse members (e.g., at least 25% people with disabilities) and ensure compliance with rules like the Home and Community-Based Services (HCBS) final rule, which sets standards for non-institutional community services.
- Employer grants (up to $500,000 over 3 years, minimum $100,000) target entities in non-grantee states, requiring plans for model changes, wage equity, and partnerships with support organizations (e.g., vocational rehab agencies).
- Adds funding under the Rehabilitation Act for states that successfully phase out 14(c) certificates, providing 25% extra for supported employment services from fiscal years 2030–2034.
- Grants emphasize fair wages (at or above federal/state minimum and comparable to non-disabled workers), job placement, and integrated services like skill-building in community settings.
- Title II: Phase Out of Special Certificates Under FLSA Section 14(c)
- Gradually raises the minimum wage for 14(c) workers to 100% of the federal minimum wage over 4 years (starting at 60% after 3 months from enactment, increasing 10% annually).
- Prohibits issuing new 14(c) certificates immediately upon enactment.
- Sunsets all 14(c) certificates 4 years after the wage phase-in begins, ending their legal effect and authority.
- Title III: Technical Assistance and Dissemination
- Awards a 6-year grant to a qualified nonprofit to provide technical help to transforming employers, share evidence-based models and strategies, and promote resources like Employment First initiatives (prioritizing CIE), ABLE accounts (tax-advantaged savings for people with disabilities), and HCBS compliance.
- Partners with federal agencies (e.g., Department of Labor's Office of Disability Employment Policy) to increase awareness of training and coordinate with programs under the Workforce Innovation and Opportunity Act.
- Title IV: Reporting and Evaluation
- Contracts a nonprofit for a multi-year impact evaluation of the act, focusing on wage/employment changes and compliance, with interim (3 years) and final reports to Congress.
- Requires annual Wage and Hour Division reports on 14(c) practices (e.g., worker numbers, wages, demographics, transitions to CIE) for 5 years, plus a one-year survey of at least 10% of 14(c) employers on training and transition efforts.
- Title V: General Provisions
- Defines key terms like "competitive integrated employment" (from Rehabilitation Act), "integrated services" (community-based supports excluding institutional settings), and "Olmstead plan" (state strategies for community integration per the 1999 Supreme Court Olmstead v. L.C. decision, which requires non-discriminatory access to community services).
- Authorizes $50 million annually for fiscal years 2026–2031 (excluding Rehabilitation Act additions).
Significant Changes to Existing Law
- FLSA Section 14(c) Amendments: Introduces a phased wage increase to full minimum wage over 4 years, bans new certificates, and sets a complete sunset, eliminating subminimum wages for disabled workers after decades of allowance. Previously, 14(c) permitted indefinite below-minimum wages if deemed "commensurate" with productivity.
- Rehabilitation Act Amendments: Adds Section 611 for ongoing funding to states that eliminate 14(c) use, enhancing supported employment allotments without counting toward existing caps, to sustain CIE post-transformation.
- No direct changes to other laws, but requires alignment with the Americans with Disabilities Act (ADA), Olmstead decision, and HCBS rules, emphasizing community integration over segregated work.
Potential Impacts
- On Citizens: People with disabilities (especially those with intellectual/developmental disabilities) could gain higher wages, more stable CIE jobs (e.g., full-time hours, comparable pay), and access to wraparound services like benefits counseling and ABLE accounts, reducing reliance on subminimum-wage or institutional settings. Families and workers may see improved job satisfaction and community participation, though short-term disruptions during transitions could occur.
- On Government Agencies: The Department of Labor gains responsibilities for grant administration, technical assistance partnerships, evaluations, and reporting, potentially increasing workload and costs (offset by authorizations). States must update Olmstead and workforce plans, coordinate agencies (e.g., Medicaid, vocational rehab), and track data for 2 years post-sunset, straining resources in rural/urban areas but enabling better integration of federal programs like Ticket to Work.
- On International Relations: None directly addressed; the act is domestic-focused on U.S. labor and disability policy.
Main Stakeholders Affected
- Individuals with Disabilities and Families: Primary beneficiaries, targeted for priority supports in transitions; must be involved in advisory councils and planning.
- Employers Using 14(c) Certificates: Nonprofits, workshops, and businesses must transform models or lose certificates, facing redesign costs but gaining grants and new hiring incentives.
- States and Local Governments: Eligible for grants but required to phase out 14(c), engage partners (e.g., education, transportation agencies), and report data; rural states may need extra focus for equitable distribution.
- Federal Agencies and Nonprofits: Department of Labor, Health and Human Services, Education lead implementation; vocational rehab agencies, independent living centers, and protection/advocacy groups provide expertise and services.
- Workforce and Community Organizations: Local workforce boards, University Centers for Excellence in Developmental Disabilities, and private employers recruited for hiring and partnerships.
Notable Legal, Constitutional, or Political Implications
- Legal: Strengthens enforcement of ADA and Olmstead by mandating community-based CIE and HCBS-compliant services, potentially reducing future discrimination lawsuits. The wage phase-out and sunset could face challenges under due process if seen as impairing existing contracts, but grants mitigate transitions. Ensures data privacy in reporting (e.g., avoiding identifiable info).
- Constitutional: Aligns with Equal Protection Clause by promoting non-discriminatory employment, echoing Olmstead's integration mandate without isolating disabled individuals.
- Political: Bipartisan introduction (by Reps. Scott and Sessions) highlights consensus on disability rights and fair labor, but may spark debate over economic burdens on employers/states versus equity gains. Authorizations signal long-term federal commitment, with evaluations providing accountability to Congress.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Scott, Robert C. "Bobby" [D-VA-3]
Cosponsors (6)
Rep. Sessions, Pete [R-TX-17], Rep. Davids, Sharice [D-KS-3], Rep. Malliotakis, Nicole [R-NY-11], Rep. Keating, William R. [D-MA-9], Rep. Neguse, Joe [D-CO-2], Rep. Goodlander, Maggie [D-NH-2]
Recent Actions
- 2025-07-25: Referred to the House Committee on Education and Workforce.
- 2025-07-25: Introduced in House
- 2025-07-25: Introduced in House
Bill Versions
- Transformation to Competitive Integrated Employment Act — issued 2025-07-25 — PDF (49 pages)