Subject and Citation
Limitation on Use of Subminimum Wages §397.1, pg.180
High Level Summary
Summarize and describe the main points of the subject you are reviewing
Part 397 covers the limitations on use of subminimum wages.
The purpose of these regulations are to ensure that individuals with disabilities, especially youth with disabilities, have a meaningful opportunity to prepare for, obtain, maintain, advance in, or regain competitive integrated employment, included supported or customized employment.
Prior to a youth with disabilities considering subminimum wage employment, the DSU, must provide the youth with pre-employment transition services, and provide documentation that the youth was determined to be ineligible for VR services (with appropriate documentation of trial work experiences) or was eligible for VR services and was unable to achieve the employment outcome specified in the IPE
(despite working toward the employment outcome with reasonable accommodations and appropriate supports and services, including supported employment services and customized employment services for a reasonable period of time, and that the VR case record has been closed.
Regardless of whether the youth with a disability is eligible or ineligible for VR services, he/she must have received career counseling, information and referrals to Federal and State programs and other resources in his/her geographic area that offer employment-related services and supports designed to enable the individual to explore, discover, experience, and attain competitive integrated employment.
The information provided must be provided in a manner that facilitates informed choice and decisionmaking by the youth, or the youth’s representatives as appropriate and not be for subminimum wage employment and employment-related services provided are not to be compensated at a subminimum wage.
A local or State educational agency may not enter into a contract that operates a program under which a youth with a disability is engaged in subminimum wage employment.
Additionally, for individuals regardless of age, who are employed at a subminimum wage, the DSU must provide: career counseling and information and referral services to individuals with disabilities in a manner that is understandable to the individual or the individual’s representative as appropriate, facilitates independent decision-making and informed choice as the individual makes decisions regarding opportunities for competitive integrated employment and career advancement, particularly with respect to supported employment, including customized employment.
Further, upon a referral by an entity that has fewer than 15 employees, of an individual with a disability who is employed at a subminimum wage by that entity, the DSU must inform the individual of selfadvocacy, self-determination, and peer mentoring training opportunities available in their community.

Moreover, the services provided to the individual with a disability must be provided by an entity that does not have a financial interest in the individual’s employment outcome.
For persons who are employed at a subminimum wage the services provided by the DSU must be carried out once every six months for the first year of the individual’s subminimum wage employment and annually thereafter for the duration of such employment.
Changes to Current Practice
Describe any changes to current practices that the new rule would require
All of the highly detailed responsibilities to ensure that youth with a disability or persons with a disability regardless of age are fully informed about the opportunities for competitive integrated employment prior to working for subminimum wages or after working for subminimum wages are immense additional requirements for the DSU whether state agency staff or a contractor for the designated State unit performs these responsibilities.
Implications of Changes
Describe any implications – to policy, fiscal impact, staffing, etc. – that would result from the changes
These additional highly regulated responsibilities will create an enormous financial and staffing burden to State VR agencies. Without significant additional resources to perform these substantial added responsibilities, there will be a major drain on the financial resources of Minnesota’s VR agency, which will undoubtedly necessitate that we close Category 1 services.
Conclusion
Is the rule change good or bad? Should we support it? Oppose it? Suggest changes?
Since the new regulations quite closely follow the WIOA language, there is not much opportunity for change.