Judge dismisses lawsuit seeking to dissolve Minnesota nursing home labor standards board

Nursing home associations — LeadingAge Minnesota and Care Providers of Minnesota — argued in their lawsuit that the Minnesota Nursing Home Workforce Standards Board is unconstitutional and violates federal labor and antitrust laws, calling it an unprecedented “experiment in workplace regulation.”

Labor standards boards have experienced a revival in the United States — versions of them date back to the New Deal and are common in Europe — and now exist in California for fast food workers and Nevada for home care workers, among other venues.

Their arguments did not convince U.S. District Judge Nancy Brasel, whose Monday ruling granting the Walz administration’s motion for dismissal dealt the second legal blow to the nursing home industry since the board’s creation. Last year, another federal judge dismissed the two associations’ legal challenge to the board’s rule requiring nursing homes pay workers time-and-a-half on 11 holidays. The associations have appealed that decision.

The associations said in a statement they disagree with the ruling, signaling another appeal is likely.

“Our challenge has never been about whether caregivers deserve to be paid family-sustaining wages. It is about whether the Nursing Home Workforce Standards Board is a lawful and a sustainable way to achieve that shared goal,” the statement said.

Dr. Rasha Ahmad Sharif, executive vice president of SEIU Healthcare Minnesota & Iowa, celebrated the decision in a statement, saying the union looks forward to working with the standards board for “years to come.”

The state Department of Labor and Industry, which was a defendant in the lawsuit, declined to comment.

The Minnesota Nursing Home Workforce Standards Board was created under a Democratic trifecta after a campaign by SEIU Healthcare Minnesota and Iowa, which represents nearly 50,000 healthcare and long-term care workers. The union’s president, Jamie Gulley, serves on the labor standards board.

The board in Minnesota comprises three worker representatives, three industry leaders and three state government officials. (Nursing homes receive most of their money through state and federal Medicaid funding.)

The wage and holiday rules passed without support from industry leaders, who abstained from voting. In 2024, the board voted to set minimum wages and mandate 11 paid holidays without the support of the three industry representatives, who all abstained.

The hourly minimum wages set to take effect Sept. 10 are $22.50 for certified nursing assistants, $23.50 for trained medication aides, $27 for licensed practical nurses, and $19 for all other nursing home workers. The hourly wages will increase another $1.50 per hour across all job categories on Jan. 1.

The rules set by the board were approved by the Minnesota Legislature with bipartisan support last year. The Minnesota Legislature appropriated an additional $37 million to fund the raises in its 2024 health and human services budget bill, and the federal government will contribute a comparable amount.