New minimum wages for Minnesota nursing home workers to take effect in September

The minimum wages are the culmination of a yearslong campaign by the Service Employees International Union — representing nearly 50,000 Minnesota healthcare and long-term care workers — to increase pay across the entire nursing home sector despite fierce resistance from industry leaders, who warn tight margins keep them teetering on the brink of closure.

“These workers are a lifeline to our elders and most vulnerable residents, and they deserve financial peace of mind so they can provide the best care possible,” said Dr. Rasha Ahmad Sharif, executive vice president of SEIU Healthcare Minnesota & Iowa, in a statement celebrating federal approval of the new minimum wages.

Democrats created the Minnesota Nursing Home Workforce Standards Board in 2023 as part of a slew of pro-labor laws, giving it broad authority to regulate working conditions in nursing homes.

The nine-member board — made up of equal numbers of worker representatives, nursing home leaders and state officials — approved the wage floors in April 2024 and also mandated time-and-a-half pay for 11 holidays. The rules, which set wages far above the state’s $11.41-per-hour minimum wage for all workers, were approved without the support of the industry representatives, who abstained from voting.

The nursing home industry, represented by LeadingAge Minnesota and Care Providers of Minnesota, has filed a lawsuit in federal court seeking to dissolve the labor standards board after unsuccessfully suing to block the holiday pay rules. Industry leaders argue the unelected board has too much authority over labor standards and could force nursing homes to shutter even as demand grows from the state’s aging population.

Many workers — particularly licensed practical nurses — are already earning more than the minimum wages, according to a 2024 fiscal analysis by the Department of Labor and Industry. Those who are earning less than the new wage floors will receive about a $2-per-hour raise.

The rules set by the board were approved by the Minnesota Legislature with bipartisan support last year. The Minnesota Legislature already 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.

The minimum wages were supposed to take effect on Jan. 1 but were delayed because the Minnesota Department of Human Services failed to complete the necessary steps to receive approval and funding from the federal government. The federal Centers for Medicare and Medicaid Services gave the necessary approval on Aug. 11.

The Department of Human Services plans to pay nursing homes the higher reimbursement rate retroactive to Jan. 1. SEIU expects nursing homes will then pay workers at the higher rate retroactively, though it would be voluntary.

The Long Term Care Imperative, an initiative from the two nursing home industry associations, said in a statement that the industry continues to face “chaos” and “uncertainty” from the state’s delay in securing federal approval and that private pay residents could see retroactive charges.

“We remain hopeful that meaningful reform at DHS will be a priority for Minnesota’s next governor,” the Long Term Care Imperative said in a statement.