“It is the intent of the Legislature to afford all Californians, regardless of whether they have disabilities, with protections to ensure equal pay and equal treatment in the workplace.” These are the closing words of the preface to Senate Bill 639; a noble goal. However, the good intentions paving the way for this new law – equalizing the monetary playing field for employees with disabilities – may result in more harm than good for some of those very workers.

Before SB 639 was passed, employers could apply to the Industrial Welfare Commission for a special license, renewable yearly, to hire an employee with disabilities to work for less than the minimum wage. This framework was designed to incentivize employers to integrate people with mental or physical disabilities into the workplace; employers would be permitted to pay a lower wage in exchange for hiring individuals who they might not otherwise consider. Under SB 639, new special licenses would be prohibited from being issued beginning on January 1, 2022. Existing licenses may be renewed for existing license holders who meet the requisite benchmarks in a development plan to be established or until January 1, 2025, whichever is later, by which time any employee with a disability must be paid the state legal minimum wage or the applicable local minimum wage ordinance, whichever is higher.

Specifically, in a bizarre “shoot-first-ask-questions-later” approach, SB 639 requires the State Council on Developmental Disabilities to release and publicly post a report on its website that outlines a “multiyear phaseout plan” to collect data on the effect of the bill. This plan would also create “a list of the resources necessary to ensure that employees with disabilities can receive services and support according to their needs and preferences of the individuals and in an integrated setting, regardless of the nature or severity of each individual’s disabilities.” The report would be first posted on January 1, 2023 and updated each year through 2025.

Unfortunately, it is likely that phasing out the current incentive program will have a chilling effect on hiring and retaining employees with certain types of more severe disabilities. Instead of giving disabled employees a chance to perform discrete tasks, an employer might instead hire a non-disabled person to perform these and other tasks rather than meet the burden of paying the applicable minimum wage, which is projected to rise above $20 per hour in the near future in some urban areas.