Minnesota nursing home workers will have to wait for raises because state dropped ball on paperwork

Unprecedented minimum wages for thousands of workers in Minnesota nursing homes had been set to go into effect Jan. 1.

But adoption of this new law is indefinitely delayed. The reason is that the Minnesota Department of Human Services (DHS) has not yet filed paperwork with the federal government that is necessary to enact the law.

''I want to acknowledge that this is a little disappointing as we've heard from so many workers in the industry that the coming minimum wage increases had given them some hope,'' said Jamie Gulley, who is the chair of Minnesota's Nursing Home Workforce Standards Board and is also president of SEIU Healthcare Minnesota and Iowa.

Gulley spoke at a monthly meeting of the workforce board Thursday in St. Paul. During the meeting, representatives for both workers and nursing home executives stressed the need to tell their members that implementation of these historic wage rules would likely be delayed for months.

A 2023 state law created the workforce board. The workforce board teamed up with the Minnesota Legislature on a law to pay all nursing home workers at least $19 an hour.

However, the law is contingent on the federal Centers for Medicare and Medicaid Services providing $18 million to Minnesota's Medicaid program, money that would go to nursing home operators to help pay for the wage hikes. The state also chips in $18 million.

The minimum wages are statutorily required to kick in 30 days after the Centers for Medicare and Medicaid Services greenlights Minnesota's plan. But Kristy Graume, director of state government relations at DHS, said that DHS had not known about this part of the law.

In fact, Graume said that DHS had just started on Monday a 30-day public comment period regarding this rule change for nursing homes.

Shortly after that public comment period ends, DHS would then submit the funding request and Medicaid rule change for federal approval, Graume said.

At that point, the Centers for Medicare and Medicaid Services has 90 days to review Minnesota's request for funding and change in Medicaid policy.

Mehmet Oz, director of the Centers for Medicare and Medicaid Services, has threatened to withhold Medicaid payments to Minnesota unless DHS addressed what Oz called ''systemic fraud.''

But Graume said that DHS ''don't foresee any significant concerns'' coming from the Centers for Medicare and Medicaid Services. Graume added that federal approval of changes to Minnesota Medicaid are typically mere formalities.

Setting a wage floor for a specific industry is a relic of Franklin D. Roosevelt's New Deal that has been resurrected by labor unions in blue states over the last 10 years.

Minnesota is the first state to specifically focus on the nursing home industry. The state has a long history of social programs that provide generous end-of-life services.

But 36% of nursing home workers leave before a year on the job. And nursing home workers are one of the lowest paid occupations in the state with some level of unionization, according to Gulley.

The $19 floor is for employees without nursing home credentials such as housekeepers, chefs and dietary aids. The wage floor climbs to $20.50 in 2027.

Certified nurses have starting minimum wages between $22 and $27 depending on their occupation.

These operators say that they will ultimately comply with the new law, but that they need to draw from the $36 million pot of money to comply.

The money ''is the only realistic mechanism that allows providers to fund and sustain the higher minimum wages,'' said a spokesperson for LeadingAge Minnesota, a nursing home industry lobbyist.

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