St. Paul, Minnesota — After more than eight months of delays and bureaucratic wrangling, the federal government has approved an unprecedented plan that will use Medicaid dollars to establish a minimum wage floor for nursing home workers across Minnesota.
The agreement, announced Tuesday by the Centers for Medicare & Medicaid Services, clears the way for $36 million in combined federal and state Medicaid funding to boost pay for the state’s approximately 330 nursing homes. Workers will see their minimum wage rise to $19 per hour for the remainder of 2026, with another increase to $20.50 scheduled for 2027.
The wage floors vary by role. Certified nursing assistants will earn at least $22.50 per hour starting this year, jumping to $24 in 2027. Trained medication aides will see $23.50 beginning in January and $25 the following year. Licensed practical nurses, who can administer medications and advise families on care options, are set to make at least $27 this year and $28.50 in 2027.
How It Happened
The wage rules were developed by Minnesota’s Nursing Home Workforce Standards Board, a nine-member panel created by the state legislature in 2023 when Democrats controlled the governor’s office and both chambers. The board includes three representatives from employers, three from labor, and three from Governor Tim Walz’s administration.
Implementation hit repeated snags. The state Department of Human Services was months late filing necessary paperwork with CMS, according to published reports. Then CMS extended its review period by 90 days after raising questions about Minnesota’s plan. The original target of January 1, 2026 came and went without action.
The rule will now take effect in September, according to Leah Solo, the board’s executive director.
The Industry Response
Labor unions celebrated the announcement. Rasha Ahmad Sharif, director of the nursing home sector for SEIU Health Care Minnesota and Iowa, called the workers “a lifeline to our elders and most vulnerable residents” who “deserve financial peace of mind.”
Nursing home operators, represented by the Long-Term Care Imperative, have taken a different approach. The industry group filed a lawsuit in March seeking to eliminate the Workforce Standards Board entirely, arguing that the structure effectively lets the governor and unions bargain against operators themselves. A federal judge heard oral arguments in May but has not yet ruled.
Despite the legal challenge, operators have indicated they will follow the wage rules while the case proceeds.
The Broader Context
The Minnesota experiment arrives as workforce pressures continue mounting across the long-term care sector. The state’s approach—using Medicaid matching funds to directly subsidize wages—represents a novel strategy that other states are watching closely.
The legislature attempted to soften the blow of the delayed implementation by approving $9.5 million for one-time $3,000 bonus checks to nursing home workers. It remains unclear whether the wage floor will be applied retroactively to cover the months of lost increases.
For now, Minnesota’s roughly 330 nursing homes are preparing for a significant shift in their labor costs—even as their trade association continues fighting the board that made it possible.
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