Minnesota Nursing Home Wage Increase Delayed Pending Federal Approval

Minnesota’s planned minimum wage increase for nursing home workers has been indefinitely delayed due to a procedural oversight at the Minnesota Department of Human Services (DHS). The new law, set to raise wages to at least $19 an hour by 2024 with increases to $20.50 by 2027, requires federal approval linked to Medicaid funding. This wage floor targets non-certified nursing home staff, reflecting efforts to address high turnover and low pay in this sector. The DHS had not filed the necessary paperwork for federal approval, initiating a 30-day public comment period only recently. Following this, the state will submit a funding request to the Centers for Medicare and Medicaid Services (CMS), which has up to 90 days to review. The delayed submission has postponed implementation beyond the originally scheduled January 1 date. The funding model depends on $18 million from CMS matched by $18 million from the state, providing nursing home operators with resources to cover higher wages. Industry representatives contend that this financial mechanism is essential to sustain the wage increases without compromising operational viability. Minnesota’s initiative marks a notable policy approach, as it is the first state targeting minimum wages specifically within the nursing home industry. The legislation arises amid persistent staffing challenges, including a 36% turnover rate within one year for nursing home workers, highlighting systemic workforce retention issues. Legal challenges from nursing home operators, including claims about conflicts with federal collective bargaining agreements, have been unsuccessful. However, the industry continues to emphasize the need for adequate funding to comply with wage mandates. While CMS leadership previously expressed concerns about systemic issues in Minnesota Medicaid, DHS officials anticipate a routine federal review process without significant obstacles. The wage policy aligns with broader labor union campaigns in several states to establish industry-specific wage floors, though it retains a unique focus on long-term care facilities here. The delay underscores critical compliance and administrative coordination aspects in implementing state wage laws interconnected with federal health programs. Nursing home stakeholders remain attentive to the forthcoming federal approval timeline, which will dictate the enforceability of these wage standards moving forward.