Fact Sheet #39A: Fair Labor Standards Act (FLSA) Section 14(c) Certificate Application Policies and Procedures

This fact sheet provides general information for employers applying for certificates under section 14(c) of the FLSA. Section 14(c) certificates allow employers to pay a subminimum wage to certain workers who have disabilities for the work being performed under the strict requirements provided by the certificate. Employers must ensure information provided in applying for certificates under section 14(c) is timely and accurate. This fact sheet outlines the requirements for section 14(c) certificates, including information on when applications may be denied or certificates revoked.

Please read Fact Sheet #39 for general information about section 14(c). Section 14(c) regulations can be found at 29 CFR Part 525.

Types of Establishments where Certificates may be Used

Community rehabilitation program (CRP) or work center – A facility that primarily provides vocational rehabilitation services and employment for people with disabilities. A CRP applicant must include information in its application about all locations where it employs or is seeking to employ workers with disabilities and pay them a subminimum wage, for example, physically separate branch locations. Certificates may be issued for a two-year effective period.

Hospital or residential care facility (patient workers) – A facility that primarily provides residential care for individuals with disabilities, including nursing homes, intermediate care facilities, assisted living facilities, halfway houses, and residential substance abuse treatment facilities. Such an employer may hire a worker with a disability who receives inpatient or outpatient treatment or care, often referred to as a “patient worker.” Certificates may be issued for a two-year effective period.

School-work experience program (SWEP) – A school-operated program where students with disabilities may perform work activities as part of an educational employment program. School employers are responsible for compliance with all applicable child labor provisions, wage standards, and certificate and recordkeeping requirements of the FLSA. The school may submit a group application that covers all students with disabilities and all the school locations where students will be working. Certificates may be issued for a one-year effective period.

Business – A for-profit employer other than a CRP, a hospital/residential care facility, or SWEP that employs workers with disabilities at a subminimum wage based on the individual’s productivity for the work performed. Certificates may be issued for a one-year effective period.

Certificate Application

Employers may apply for section 14(c) certificates by completing the online section 14(c) certificate application at https://section14c.dol.gov/. The Wage and Hour Division’s (WHD) online application system interactively guides applicants through the information needed to complete the application, submits the application directly to WHD, and provides a PDF copy of the submitted application to the employer. The online application system includes detailed instructions that employers should read carefully as the instructions explain the specific information that employers are required to provide. The system also notifies the applicant of missing or incomplete information that must be added or corrected before the application is accepted for submission. Applicants who are renewing an existing certificate must provide information regarding the subminimum wage work and workers paid a subminimum wage during the employer’s most recently completed fiscal quarter.

Certificate Application Review Process

WHD Certification Team Specialists review each application for completeness, accuracy, and compliance with the provisions of the FLSA, including section 14(c), and section 511 of the Rehabilitation Act. The application process and requirements are designed to ensure the applicant is willing and able to adhere to section 14(c) certificate requirements. Applications that are insufficient upon submission will require additional information to complete processing, will slow the processing time, and may result in a denial of certificate authority.

In addition, WHD will take into account applicable state laws that limit or prohibit the payment of a subminimum wage. Only where all criteria have been met will WHD issue a certificate to the applicant. WHD’s general goal is to process timely submitted and complete applications within 120 days. Application processing may be delayed if the Certification Team Specialists must contact the employer for missing information, for example, or if the employer is under review for compliance by WHD.

The reviewing Certification Team Specialist may contact an applicant for clarification of information on the application. Alternatively, if WHD determines that an application is not complete, does not provide sufficient information as instructed, or is from an employer operating in a state that limits or prohibits the payment of a subminimum wage, the Specialists will send the employer a letter identifying the application deficiencies and requesting the applicant to respond and, where applicable, correct the identified issues within 30 days. If the applicant does not respond within the requested timeframe, WHD will deny the application. Additionally, where Specialists identify such issues, they will ensure that the employer has come into compliance with section 14(c) including the payment of any resulting back wages due to workers with disabilities before finalizing application review. If the applicant is unable to comply with the requirements of section 14(c), WHD will deny the application. Specialists also may refer the entity for investigation by a WHD District Office, where appropriate.

Applications must be Complete – “Complete” means the applicant has provided information for all required application entries.

WHD will send an applicant a letter identifying deficiencies and request correction within 30 days if any of the following items are missing:

1. Prevailing wage survey / wage determination
2. Time study and supporting documentation
3. Applicant signature
4. Information about the workers employed at each location.

Additionally, WHD Certification Team Specialists may contact the applicant if other items are missing from an application. Such additional contacts may delay application processing. Note: The online application system generates an error message and does not allow an employer to submit an application if all required entries are not completed. The online application system will identify the specific item that was missed and provide references for the applicant to use in completing that item.

Applications must be Accurate – “Accurate” means that the content of the information provided in the application is correct. Inaccuracies indicate that the applicant has not properly followed section 14(c) requirements. Errors often lead to workers’ wages being lower than the wages they are entitled to under the law and must be corrected before WHD will consider issuing a certificate. A letter requesting correction will be sent to an applicant if any of the following problems are present:

1. Problems with prevailing wage survey sources. Prevailing wage survey and/or source problems include:
   • Fewer than three prevailing wage sources,
   • A source indicating a prevailing wage below the Federal minimum wage (or state/local minimum wage, if higher),
   • A source indicating the prevailing wage is equal to the Federal minimum wage (or state/local minimum wage, if higher) with no explanation of why the indicated prevailing wage reflects the wages that would be paid to an experienced worker performing the work,
   • An incorrect Service Contract Act wage determination rate,
   • Incorrect wage data from an alternative wage data source,
   • Prevailing wage survey information that is more than twelve months old at the application submission date, or
   • A prevailing wage survey that was not updated after a minimum wage increase (Federal, State, or local).
2. Sample time study appears incorrect. A time study will be considered incorrect when there appears to be an error in methodology in either an hourly or piece rate time study or an hourly time study is not current—more than six months old at the application submission date.
3. Employee wage data appears to be incorrect. Errors in wage calculations may include:
   • All wages and/or productivity ratings are the same for each employee, without an explanation. Note that whether an employer may pay a worker a subminimum wage for the work being performed must be determined based on the specific individual’s abilities and the nature of the work being performed.
   • The applicant is not in compliance with the section 511 requirements and, therefore, would be barred from paying those workers less than the Federal minimum wage.
4. Obvious falsification or misrepresentation is present in the application. Applicants must attest to the accuracy of information provided in the certificate application process. Where an applicant falsifies or misrepresents application information, the application will be denied using the process described here.

In addition, a WHD Certification Team Specialist may contact the applicant if they identify other errors in an application. This process may delay application processing.

Ways Applicants Can Assist in the Application Review Process

• Designate an individual who understands both the certification and compliance principles of section 14(c) to oversee the creation and submission of the application and list this individual as the “application contact person” on the application.
• Ensure that the analysis of whether a worker can be paid a subminimum wage is conducted on an individual, work-specific basis.
• Submit a complete, accurate, and timely application that includes all the required supporting documentation.
• Ask the WHD Certification Team about any application requirement or processing questions before applying.
• Respond promptly and fully to WHD Certification Team Specialists if contacted during the application review process.

Application Denial

WHD will deny an application if the application is incomplete or inaccurate. WHD will contact employers whose application is found to be incomplete and/or inaccurate and permit an opportunity to correct the identified problems before denial. If the employer does not timely remedy all the errors or deficiencies of their application, WHD will deny the application and notify the applicant their application for certificate has been denied. The notice will include information on the applicant’s right to appeal the decision.

A Certificate is not a Statement of Compliance by WHD

When WHD approves an application and issues a certificate, it is not a statement by WHD that the employer is in compliance with all section 14(c) requirements or other applicable laws and regulations, nor is it a statement that all information contained on the employer’s application is accurate. WHD retains the authority to conduct investigations to determine compliance with section 14(c). Possession of a certificate is not a good faith defense should violations of the law occur. Where violations are found, WHD will request corrections to any non-compliant practices, assess any back wages due as a result of the violations found, and may revoke the certificate and assess penalties and fees, as appropriate.

Certificate Expiration

WHD issues certificates with an effective date and an expiration date. The employer is permitted to pay a subminimum wage only during the dates of a valid certificate. However, if the employer properly files an application for renewal with WHD before the expiration date of their certificate, an existing 14(c) certificate will remain in effect until the renewal application has been granted or denied. Without certificate authority, an employer must pay all workers covered by the FLSA at least the full appropriate Federal minimum wage.

Certificate Renewal Process

Employers can submit a renewal application using the same online application system as used for an initial application. Renewing applicants must complete all applicable items on the application. Applications to renew section 14(c) certificate authority should not be submitted earlier than 90 days prior to a current certificate’s expiration date. This helps to ensure that employers are submitting the most recent and accurate information about workers who are being paid a subminimum wage. If the renewal application is properly filed with WHD before the existing certificate expires, the employer's existing authority to pay a subminimum wage continues in effect until the renewal application is either granted or denied.

Certificate Withdrawal

Employers holding a 14(c) certificate who no longer pay a subminimum wage should contact the WHD Certification Team to withdraw their certificate. Employers should mail a letter on company letterhead providing the date the employer stopped, or will stop, paying a subminimum wage, the reason for withdrawal, and the locations affected by the withdrawal, if applicable, to the WHD Certification Team at 230 South Dearborn Street, Room 530, Chicago, Illinois 60604. After the withdrawal request is processed, WHD will send the employer a confirmation notice.

Certificate Revocation

WHD may revoke a section 14(c) certificate for many reasons, including, based on violations found in an investigation or misrepresentations or false statements made in obtaining the certificate or in permitting a worker with a disability to be employed under the 14(c) certificate. If WHD believes the revocation of a section 14(c) certificate is warranted, WHD will provide the employer with a letter notifying it of the reasons for revocation. The letter will provide the facts supporting certificate revocation and provide the employer 30 days to present evidence and/or arguments to WHD that revocation should not occur. WHD will issue the employer a final letter notifying it of the revocation decision. If WHD revokes a certificate, the revocation can be retroactive for the entire period the certificate was effective. Where certificate authority is revoked, the employer is no longer authorized to pay a subminimum wage to any covered employees performing work subject to the FLSA who were previously paid under the section 14(c) certificate and may be liable for back pay up to the full FLSA minimum wage.

Appeal Rights

If a certificate is revoked or an application is denied, any person affected by such action may appeal. In such a case, a petition for review must be filed with the WHD Administrator within 60 days of the action.

Where to Obtain Additional Information

• Employers with questions about completing a section 14(c) application or the application process may contact the WHD Certification Team at (312) 596-7195.
• Employers experiencing technical difficulties with the online application system may contact the WHD IT support team at WHD.14cOnlineApplication.Help@dol.gov.
• Employers who have feedback on the online application system, including suggestions for improvement, may submit it to WHD at 14conlineapplicationfeedback@dol.gov. This e-mail address is only for online application system feedback; do not provide any information requiring a response.
• Employers may contact the local WHD district office to address any questions on how to properly comply with section 14(c) program requirements. Call 1-866-4US-WAGE (1-866-487-9243).