Transformation to Competitive Integrated Employment Act
- Bill Number
- S. 2438
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 1
- Policy Area
- Labor and Employment
- Status
- Introduced
- Latest Action
- 2025-07-24: Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
- Last Updated
- 2026-03-06T12:03:21Z
AI-Generated Summary
Purpose The legislation, known as the Transformation to Competitive Integrated Employment Act, aims to help employers currently using special certificates under Section 14(c) of the Fair Labor Standards Act of 1938 shift their operations to models that provide competitive integrated employment for people with disabilities. It seeks to phase out the use of these certificates over time, support transitions to integrated community services, and improve employment outcomes through state planning efforts.
Key Provisions
- Grant Programs (Title I): Authorizes competitive grants to states (minimum $3 million, maximum $15 million over 5 years) and to eligible certificate-holding employers (minimum $200,000, maximum $750,000 over 3 years) to fund business model transformations, staff training, stakeholder engagement, and support for workers moving to competitive integrated employment. States must form advisory councils with at least 25% representation from people with disabilities.
- Phase-Out of Special Certificates (Title II): Requires gradual wage increases for workers under existing certificates (starting at 60% of the federal minimum wage after 90 days, rising to full minimum wage after 5 years). Prohibits issuance of new certificates and ends all legal effect of existing ones after 5 years.
- Technical Assistance (Title III): Funds a nonprofit entity to provide guidance, identify best practices, and disseminate information on transformations, including coordination with federal agencies.
- Reporting and Evaluation (Title IV): Mandates multi-year evaluations, annual wage and hour reports, and an audit of at least 10% of current certificate holders.
- Additional Funding: Amends the Rehabilitation Act of 1973 to provide extra supported employment funding to states that successfully complete state grants.
- Appropriations: Authorizes $200 million annually for fiscal years 2026–2030, with 1% allocated to technical assistance.
Significant Changes to Existing Law
- Amends Section 14(c) of the Fair Labor Standards Act to replace the prior subminimum wage allowance with a phased transition to full minimum wage compliance.
- Adds a prohibition on new special certificates and a 5-year sunset provision.
- Introduces new grant authorities and coordination requirements under the Rehabilitation Act for states meeting transformation goals.
- Establishes definitions for terms such as "competitive integrated employment" and "integrated services" aligned with existing disability regulations.
Potential Impacts
- Government Agencies: Requires states to align multiple agencies (Medicaid, vocational rehabilitation, education, workforce development) and update Olmstead plans; may increase administrative coordination and data collection demands.
- Citizens: Supports transitions for people with disabilities from subminimum-wage settings to higher-paying competitive employment, with priority for those with significant disabilities; may require expanded access to integrated services and benefits counseling.
- Employers: Provides funding and technical help for certificate holders to redesign operations, contracts, and staffing, though non-participating employers face eventual loss of certificate authority.
- International Relations: No direct effects identified.
Main Stakeholders Affected
- Employers currently holding special certificates.
- People with disabilities employed under those certificates and their families.
- State and local governments, including Medicaid, developmental disability, and vocational rehabilitation agencies.
- Nonprofit organizations, advocacy groups, and service providers focused on disability employment.
- Federal agencies such as the Departments of Labor, Health and Human Services, and Education.
Notable Legal, Constitutional, or Political Implications
- Builds on the Supreme Court’s Olmstead decision and the Americans with Disabilities Act by promoting community-based employment and services.
- Creates new federal grant and oversight mechanisms that may raise questions about state-federal coordination and compliance timelines.
- Includes bipartisan sponsorship and references to existing programs like ABLE accounts and the Ticket to Work initiative.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (7)
Sen. Daines, Steve [R-MT], Sen. Gillibrand, Kirsten E. [D-NY], Sen. Blackburn, Marsha [R-TN], Sen. Murkowski, Lisa [R-AK], Sen. Wyden, Ron [D-OR], Sen. Warren, Elizabeth [D-MA], Sen. Tillis, Thomas [R-NC]
Recent Actions
- 2025-07-24: Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
- 2025-07-24: Introduced in Senate
Bill Versions
- Transformation to Competitive Integrated Employment Act — issued 2025-07-24 — PDF (51 pages)