The government wants firms which employ disabled workers to start paying them the minimum wage.
But that's concerned one employer who said he couldn't afford it and might have to consider laying off staff.
At present employers are allowed to pay staff less than the minimum wage if their disability limits them in carrying out the requirements of their work.
The employee is granted a minimum wage exemption permit by the Labour Inspectorate. There have been 817 such permits granted as at October 2015.
But Sacha O'Dea of the Ministry of Social Development said the permit scheme treated people with disabilities differently from other New Zealand citizens.
"It's not in line with the United Nations Convention on the Rights of Persons with Disabilities."
The convention recogniseD the right of people with disabilities to have the opportunity to gain a living by work freely chosen or accepted in a labour market and work environment that was open, inclusive and accessible to persons with disabilities.
Ms O'Dea said the exemption permit was also out of step with modern thinking about disability which focussed on what people could do, with support, rather than a deficit model of what they couldn't do.
But Southland Disability Enterprises general manager Ian Beker said the proposal could make his business unviable and he might have to lay off staff.
He employed about 80 staff with disabilities, including 30 who sorted the region's recycling by hand.
If he was required to pay minimum wage he would have to automate his sort line and have just three staff working on it, he said.
"We could survive but we wouldn't have 80 disabled employees on our payroll."
And the business was much more than a workplace, he said.
"It's a way of life, it's a lifestyle, it's giving people purposes and meanings... and it rewards them for their abilities."
Sam Nielson said the workplace was "like a massive, big family" and he loved his job breaking down power meters in the electronic recycling department. "It beats sitting at home doing nothing."
He appreciated the opportunity to work as he said his epilepsy made other businesses loath to give him the chance.
"It's just nice of someone to allow me that time and chance to show what I can do."
Ian Thompson had been with the business for 15 years and was currently working on the recycling sort line.
He enjoyed the opportunity to make new friends and often played darts or went ten pin bowling with his workmates in the evenings.
Ms O'Dea said the ministry understood the concerns of business enterprises and was keen to work with them to find alternatives that suited everyone.
"What can enable people to continue to be employed doing what they're doing now but be paid at a minimum wage?"
It was likely the solution would be a package of measures and some ideas already proposed included wage subsidies, greater use of employment supports and possible apprenticeship and training schemes.
However, there was no firm plan yet and Ms O'Dea hoped the disability sector would offer their own ideas.
Recommendations on an alternative to the minimum age exemption permit will be made to government ministers in June.