Rehabilitation Reform

Ten days before the U.S. Department of Labor began a month of “Celebrating Value and Talent,” a rule it had written took effect that removed the only quantitative measure of disability hiring that federal contractors were required to keep. That sequence is the subject of this essay.

Every October the United States observes National Disability Employment Awareness Month; 2026 is the 81st anniversary of the observance. The Department of Labor’s Office of Disability Employment Policy set this year’s theme in May, carrying last year’s forward in honor of America’s 250th birthday. The theme is gracious. It is also worth asking what, exactly, the celebrating has produced.

The empirical gap

The Bureau of Labor Statistics reported that in 2025, 22.8% of people with disabilities were employed, “little different from the prior year,” compared with 65.2% of people without disabilities. The unemployment rate for people with disabilities rose to 8.3%, exactly double the 4.1% rate for those without. About three in four people with disabilities were outside the labor force entirely (U.S. Bureau of Labor Statistics, 2026).

The usual rebuttal is that the population skews older, and it does: half of all people with a disability are 65 or over. So restrict the comparison to working age. Among people 16 to 64, 38.1% of those with a disability were employed in 2025, against 74.8% of those without. The gap narrows from 42 points to 37. It does not close.

Education does not close it either. Among adults 25 and older with a bachelor’s degree or higher, the unemployment rate was 5.3% for people with disabilities and 2.5% for everyone else. Race compounds it: 11.8% of Black workers with disabilities and 9.5% of Hispanic workers with disabilities were unemployed, against 7.3% of white workers with disabilities. And among those who are working, about 30% hold part-time jobs, nearly double the share for workers without disabilities.

A gap that survives age adjustment, survives a college degree, and widens along lines of race is not a gap in human capital.

These figures describe a durable structure, not a bad year. When a pattern persists across decades and business cycles, sociology teaches us to stop looking for its cause in individuals and start looking at institutions, an argument I made at length in Selective Rationing.

(The 2025 annual figures are 11-month averages that exclude October, which was not collected during the federal government shutdown. The comparisons remain directionally robust.)

The view from Illinois

The national pattern holds in Illinois, with a local edge. A University of Illinois Labor Education Program analysis of American Community Survey data from 2008 through 2024, released in April, finds that Illinois has had one of the highest unemployment rates for people with disabilities among its neighbors (Indiana, Iowa, Kentucky, Missouri, and Wisconsin), and in many years the highest. In 2024, 11.2% of working-age Illinoisans with disabilities who were in the labor force were unemployed, against 4.7% of those without; about seven in ten were not in the labor force at all. Measured against the whole working-age disabled population, Illinois’s employment rate averaged 22.6% over the period, behind Iowa at 27.3% and Wisconsin at 25.8%. A bachelor’s degree raises participation here too, and still leaves nearly 58% of degree-holders with disabilities outside the labor force (Bergman & Bruno, 2026).

One more figure from that report belongs in any discussion of why people stay out: roughly 80% of Illinoisans with disabilities get their health coverage through Medicare, Medicaid, or other public assistance. When coverage is tied to income and assets, every additional hour of work is also a calculation about whether the coverage survives it. That is not a motivation problem. It is a design problem, and design problems belong to institutions.

A medical-sociological lens: the gap is not a talent gap

Medical sociology has spent three-quarters of a century relocating disability from the body to the social world. Talcott Parsons (1951) described the “sick role” as a bargain: society excuses the sick person from ordinary obligations, including work, on the condition that they try to get well and return. Disability breaks the bargain. It is often permanent, so the return never comes, and institutions built on the Parsonian script have no category for a person who is both disabled and a worker. They keep offering the exemption when what is wanted is the job.

The social model of disability holds that people are disabled less by their impairments than by a social organization that was not built with them in mind (Oliver, 2013). Verbrugge and Jette’s (1994) disablement process traces a pathway from pathology to impairment to functional limitation to disability, but the speed of that pathway is governed by extra-individual factors: the physical and social environment, including labor markets. The World Health Organization’s International Classification of Functioning, Disability and Health formalized this as a biopsychosocial model: disability is the interaction between a health condition and its context (World Health Organization, 2001; Üstün et al., 2003). Goffman (1963) supplies the micro-level mechanism. Stigma is managed in the interaction, and the job interview is where an impairment becomes a discrediting attribute or does not, depending on how the encounter is structured.

Apply that framework to the employment numbers and the conclusion is direct: 22.8% is not a measure of talent. It is a measure of what happens when hiring systems, built around a nondisabled norm, meet human variation. Inaccessible application portals. Unstructured interviews that reward a narrow performance of competence. A benefits structure in which earnings can threaten the health coverage a person needs in order to work. And employer assumptions about accommodation cost that the evidence does not support: in the Job Accommodation Network’s most recent employer survey, 61% of accommodations cost nothing to implement, and those with a one-time cost had a median price of $300 (Job Accommodation Network, 2025). These are the extra-individual factors doing the disabling. The theme says the value and talent are already here. The sociology agrees, and adds that the barriers are already here too, doing exactly what barriers do.

A counseling lens: fit is a relationship, not a placement

Rehabilitation counseling is built on a person-centered ethic. The CRCC Code of Professional Ethics names autonomy, beneficence, nonmaleficence, justice, fidelity, and veracity as its foundations (Commission on Rehabilitation Counselor Certification, 2023), and the Rehabilitation Act, as amended by WIOA, requires state agencies to ensure informed choice throughout the vocational rehabilitation process. In practice, the counselor’s deepest work is person-environment fit: not changing the person to tolerate a hostile environment, but negotiating the environment to meet the person.

Customized employment is what happens when that counseling ethic walks out of the office and into the employer’s shop. WIOA defines it as competitive integrated employment that is individualized to the strengths, needs, and interests of a person with a significant disability and designed to meet the business needs of the employer, carried out through flexible strategies that can include customizing a job description around unmet employer needs. Instead of fitting the job seeker to an existing job description, the process begins with discovery, a careful mapping of the person’s contributions, conditions, and interests, and then negotiates a customized job description with the employer around what the person actually offers.

This is an institutional inversion worth naming plainly. Nearly every employment system in American life sorts people into pre-existing slots. Customized employment redesigns the slot. It treats the job description the way a good counselor treats a treatment plan: as something drafted with the person, not for them.

A rehabilitation lens: what the evidence says, honestly

The vocational rehabilitation system, operating under the Workforce Innovation and Opportunity Act of 2014, holds competitive integrated employment as its policy north star. The evidence for customized employment as a route there is promising but still developing, and an honest account says both parts. A randomized controlled trial by Inge et al. (2024) found that a three-phase customized employment intervention (discovery, development, support) was associated with competitive integrated employment for 62% of participants with intellectual and developmental disabilities, versus approximately 17% in the control group. Related work found gains in independence across home, employment, and self-advocacy domains (Inge et al., 2023). But a recent scoping review concludes that evidence on interventions promoting job quality and career advancement for people with disabilities remains thin, with most studies measuring only whether someone got a job rather than whether the job was any good (Jetha et al., 2025). That is a precise statement of where the science stands: the model works in trials; the research base on job quality has not caught up.

The floor moved this year

The legal floor under disability employment is thinner than the theme suggests, and it got thinner between the theme’s announcement in May and its observance in October.

On August 21, 2026, the Office of Federal Contract Compliance Programs published a final rule revising its Section 503 regulations, effective September 21. The rule eliminates the 7% utilization goal that federal contractors had measured themselves against since 2013, eliminates the requirement to invite applicants and employees to self-identify as having a disability, retires the self-identification form, and removes the associated data collection and utilization analysis (Office of Federal Contract Compliance Programs, 2026). The department’s stated reasons were that the pre-offer self-identification invitation sat uneasily with the ADA’s limits on disability inquiries, and that contractors might treat the goal as a quota despite regulatory language forbidding that reading. The nondiscrimination duty, the reasonable accommodation duty, and the written affirmative action plan for larger contractors all remain.

Read sociologically, the rule did something more specific than deregulate. Institutions see through measurement. The utilization goal was never a quota; it was a warning light that told a contractor, job group by job group, whether its outreach was producing hires. Remove the self-identification invitation and there is no numerator. Remove the goal and there is nothing to compare it to. A contractor can now take affirmative action and have no instrument for knowing whether anything happened. That is not an accident of drafting. It is a decision about what the institution will be able to know about itself.

Five weeks later, on September 29, the Government Accountability Office reported that DOL had suspended the contractor audits that were its principal tool for monitoring Section 503 compliance. From fiscal years 2017 through 2025, 532 audits had found Section 503 violations. GAO made eight recommendations, including that DOL resume audits, conduct strategic workforce planning for OFCCP, and give contractors additional guidance; the department agreed with six (U.S. Government Accountability Office, 2026). Celebration does not enforce itself.

The oldest floor of all is still in place. Section 14(c) of the Fair Labor Standards Act lets certified employers pay workers with disabilities less than the minimum wage. In December 2024, DOL proposed to phase the certificates out over three years, noting that the number of workers paid under them had fallen from roughly 424,000 in 2001 to about 40,600 in 2024 (U.S. Department of Labor, Wage and Hour Division, 2024). On July 7, 2025, the department withdrew the proposal, concluding that the statute imposes a mandatory duty to issue certificates and that only Congress can end the program (U.S. Department of Labor, Wage and Hour Division, 2025). More than a dozen states have moved to end it on their own. Illinois is one of them: the Dignity in Pay Act requires elimination of subminimum wages in the state by December 31, 2029, a transition I have written about elsewhere on this site. “Celebrating value” sits awkwardly beside a federal certificate that licenses paying less for it.

And there is the floor this site returns to most often. The ADA’s integration mandate, as the Supreme Court read it in Olmstead, reaches employment services. Lane v. Brown, filed in Oregon in 2012 and settled in 2015, was the first case in the country to establish that a state’s reliance on sheltered workshops can violate Title II; the settlement moved more than a thousand workshop workers into community jobs at competitive wages, and the court dismissed the case in 2022 after finding Oregon had done what it agreed to do (U.S. Department of Justice, 2022). The Department of Justice issued guidance in 2016 explaining how the integration mandate applies to state employment systems. It withdrew that guidance in December 2017. The law did not change; the signal did. A state still running 14(c) certificates through 2029 is exactly the kind of system that guidance was written for, and the broader Olmstead enforcement picture has not improved since.

The pipeline, joint by joint

Here is the sociological bottom line: service availability and legal duties are not the same as effective employment outcomes. The real pipeline has joints, and each joint is a place where talent leaks out: accessible application → interview → hire → disclosure and accommodation → retention → advancement. NDEAM posters touch none of these joints. The Section 503 self-identification invitation touched the first one; it is gone. Customized employment touches the first three directly. It redesigns the application, restructures the interview into discovery, and negotiates the hire. Supported VR practice carries the rest. If we are serious about celebrating value and talent, the celebration has to show up at the joints.

What would count as a strategy

A theme is not a strategy. A strategy names who does what at which joint. A short version:

Employers can replace unstructured interviews with structured, task-based ones that let a candidate demonstrate the work rather than perform confidence about it; fund accommodations from a central budget so that no manager weighs a $300 request against a departmental line; publish the accommodation process so that a request is routine rather than a negotiation; and keep tracking disability representation voluntarily, since the OFCCP rule removed the mandate, not the legality.

VR agencies and counselors can treat discovery as a service with a quality standard, not a preamble; measure job quality (wages, hours, stability, and advancement at six and twelve months) alongside closure; give every person a plain-language benefits calculation before the first interview, so that the coverage question is answered rather than feared; and refuse to close a case at the handoff when the extended supports that keep the job are not yet in place.

Policymakers can resume Section 503 audits, as GAO recommended; fund the job-quality research that Jetha and colleagues found missing; update benefit income and asset limits so that work does not cost coverage; finish the 14(c) phase-out in the states that have not started, since the federal route is closed for now; and index VR performance to retention and earnings rather than placement counts.

Coda

Eighty-one years of NDEAM, in the 250th year of the republic. A country that celebrates talent owes its citizens more than the celebration. It owes them the practices that let talent do what talent does, which is work: the redesigned slots, the negotiated descriptions, the enforced duties, and the instruments that let an institution see whether it is doing what it says. The value was never in question. The question was always whether our institutions were built to receive it. They still, mostly, are not. This year they were rebuilt to know a little less about it. That is not a tragedy. It is an agenda.

Sources

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