Nursing homes and other non-hospital residential care enterprises face “unique challenges” in meeting Minneapolis’ new municipal minimum wage ordinance, a report delivered by city staff in October noted.
But it’s not the only local industry that could face some difficult adjustments when the wage floor begins to rise next year, the report added. The report’s authors, who recommended no change to city policy, also noted the non-hospital residential care sector “is closer to meeting some of these challenges” because the average local nursing home or home healthcare worker salary already exceeds the state minimum of $7.75 an hour. It’s more than double that rate at large nursing facilities.
The City Council, which requested the report in June when it passed the municipal minimum wage ordinance, took no action in October to make special accommodations for the industry.
Whether nursing homes and similar businesses should be granted some flexibility was one of several key issues still under debate as the Council neared a vote on the ordinance four months earlier. The businesses rely heavily on Medicare and Medicaid reimbursements, and there is a time delay in receiving those reimbursements that can stretch to 18–27 months.
City staff met with industry representatives to prepare the report, and their dive into reimbursement rates revealed just how “varied and complex” the system is, Deputy City Coordinator Nuria Rivera-Vandermyde told the Council’s Committee of the Whole on Oct. 18.
“All of them were really supportive of our municipal minimum wage policy,” Rivera-Vandermyde said. “Their concern was mostly how it affected them in a place where they did not always have control over their … reimbursement rates, because they’re lagged.”
Before the June vote on the ordinance, Council President Barb Johnson proposed categorizing all non-hospital residential care enterprises as small businesses, regardless of size. Under the ordinance, small businesses with fewer than 100 employees get seven years to reach a minimum wage of $15 an hour, while larger businesses only get five years.
Johnson’s proposal wasn’t included in the final ordinance. Instead, the Council voted in October to add improvements to the reimbursement system to its legislative policy agenda.
“The question on (this report) was … whether that would prompt a change to the ordinance, and I think any time you have such intense scrutiny around the time you actually take your vote, having an additional change is probably unlikely, in my opinion, with the same set of people,” said Ward 8 City Council Member Elizabeth Glidden.
Glidden noted that the city plans to closely monitor the effects of the ordinance on all Minneapolis businesses, and in mid-December is expected to award a contract for what “essentially will be the first really city-funded major study of impacts.” Proposals to conduct the study are due Nov. 22.
Outside groups are expected to monitor the impacts of a rising minimum wage in Minneapolis, as well.
“My belief is there may be several outside organizations that also may wish to do this kind of work,” Glidden said.
The report on non-hospital residential care enterprises was one of two assigned to staff by the Council when they approved the municipal minimum wage. The second, also delivered in mid-October, detailed the criteria internship or apprenticeship programs must meet to pay teen workers a reduced rate — set in the ordinance at 85 percent of the minimum wage during the first 90 days of employment.
The programs will have to go through a city approval process run by the City Planning and Economic Development Department. Only programs on a CPED-approved list will be allowed to pay the reduced wage, and they must have supervisors complete a training course and also demonstrate how the internship or apprenticeship will impart job skills. Programs that receive local, state or federal grants are automatically added to the approved training program list.