WASHINGTON — Luke Grossman makes $6 an hour and he’s proud of it. At the YMCA in Norfolk, Virginia, where he washes towels, the boss is nice and the coffee’s free.

As for his salary, “that’s my business,” he said.

These days, a lot of people are making it their business. Grossman, 36, has Down syndrome and is one of thousands of disabled adults who work for less than the U.S. minimum wage of $7.25 an hour. Some earn only pennies doing menial tasks in settings that resemble day care more than work. The practice, which has roots in a 1938 law, has been called a godsend by some and exploitation by others.

System dismantled

Now the system slowly is being dismantled as Congress and President Barack Obama advance policies to raise wages for the disabled and move more people into mainstream employment. Swept up in the change are people like Grossman, his parents and his employer. All worry the new rules might leave physically and developmentally impaired adults with even fewer opportunities than they have now.

“Luke’s life looks a whole lot different if he loses his job,” said his father, Larry Grossman. “Anything which is going to have more people with disabilities sitting at home with nothing to do can’t be good.”

Sub-minimum wage work will be in shorter supply beginning Jan. 1, when federal contractors are required to begin paying employees at least $10.10 an hour. The rule applies to hundreds of nonprofit contractors that provide jobs to adults with disabilities. Many of those workers will get a raise, but others might be unemployed as companies make hard choices about who they can afford to keep on the payroll.

Push toward extinction

While Luke Grossman won’t be immediately affected, positions like his are being pushed toward extinction. The legal and political campaign to abolish them has gained momentum this year with new training rules for young disabled adults. Affirmative action guidelines ask federal contractors to fill 7 percent of their payrolls with disabled workers starting next year.

Almost 2,000 companies are certified to pay less than minimum wage, according to the Congressional Research Service. Among them are hundreds of nonprofit federal contractors that employ more than 50,000 workers with disabilities, according to ACCSES, a Washington-based trade group.

Companies aren’t required to disclose how many people they pay less than minimum wage, so the size of the total workforce is difficult to measure. A 2001 report from the Government Accountability Office put the number at about 424,000, almost all in highly supervised, nonprofit care centers called sheltered workshops. More than half earned less than $2.50 an hour doing menial work such as stuffing envelopes and shredding documents.

Laundry contractor

Luke Grossman’s employer, Eggleston Services, has been laundering sheets and towels for the U.S. military since 1992. The Norfolk nonprofit employs about 1,000 disabled workers, some earning less than the minimum wage, some earning more. When the $10.10 rule takes effect, costs will go up, but contract revenue won’t. That has Eggleston Chief Executive Officer Paul Atkinson weighing his options.

“We’ve already started looking at people who’ve maybe been working in our laundry for 20 years,” Atkinson said. “Will everybody still get the kind of hours and setting they have now? No. Will people be harmed by this? Yes.”

For opponents of the sub-minimum wage, the fight is as much about civil rights and independence as economics.

“Folks, frankly, have been exploited for a long time,” said Labor Secretary Thomas Perez.

Disabled workers integrated

In the decade leading to the mid-1990s, more disabled workers were integrated into mainstream jobs. Progress slowed, however, and a 2012 report funded by the Department of Health and Human Services found that attendance at sheltered workshops and non-work care centers had “grown steadily” during the recession, to more than 566,000 in 2010.

“There has not been a meaningful change in the number in integrated employment since 2001,” the report found.

Only about 20 percent of adults with disabilities are in the labor force. Last month, unemployment among those workers was 12.3 percent compared with 5.5 percent for those with no disability, according to the Labor Department.

Opponents push hard

Opponents of segregated, sub-minimum-wage work have redoubled their push for change. This summer, several dozen workers organized by the National Federation of the Blind picketed SourceAmerica, a Vienna, Virginia, nonprofit that helps disabled people, like Luke Grossman, find federal contracting jobs.

“A lot of people with disabilities, they’re not aware they have other choices,” said picketer Maurice Peret, a Baltimore resident who is blind. “They’re not aware they have value in the marketplace.”

Two decades ago Peret, 49, was paid about $1.50 an hour making bolts at a sheltered workshop. Now he earns about $50,000 a year training other blind people to enter the workforce.

The National Disability Rights Network, which lobbied the Obama administration for the wage rule, is filing lawsuits across the country as it seeks to eliminate the sub-minimum wage. “It is absolutely a civil rights issue,” Executive Director Curt Decker said, calling the Obama order “a very important policy statement that we’re going to start treating people with disabilities like everybody else.”

‘Dying with your rights on’

He acknowledged that the group’s success brings “a real possibility” of job losses for the very people they’re trying to help. “That may be one of the unintended consequences,” Decker said. “It’s dying with your rights on.”

Others in the disability community say work is about more than pay. Jobs, even at sub-minimum wage, provide structure, community and a sense of accomplishment. While those with disabilities such as blindness can be accommodated by employers, those with severe developmental challenges may have few skills and require close supervision.

Many will lose work

“People who have the most severe and multiple disabilities are the ones who will lose work opportunities,” said Jim Gibbons, president and chief executive officer at Goodwill Industries International in Rockville, Md. “That’s the tragedy of the conversation.”

Three years ago, Luke Grossman left Eggleston’s main laundry, where he was earning as much as $6.25 an hour under a military contract. The company’s post at the Y offered a richer social environment.

Five days a week he takes the train to the Y from his apartment in a supervised home. A self-described “big sports fan,” he has plans to visit Madison Square Garden. He has a bank account and a debit card. His job, for now, is safe.

“It’s not like I’m opposed to him getting a raise,” his father said. “You have to look at the intangible things that people get from the workplace. Luke really loves going to work. It gives him a sense of purpose.”