St. Paul, MN — Thousands of Minnesota nursing home workers who were expecting long-awaited wage increases in January will now have to wait months longer, after state officials failed to complete required federal paperwork on time.
The new minimum wage standards, passed in 2023 and set to take effect Jan. 1, were intended to guarantee nursing home workers at least $19 an hour. Instead, the rollout has been indefinitely delayed because the Minnesota Department of Human Services (DHS) has not yet submitted required documents to the federal government.
“I want to acknowledge that this is a little disappointing,” said Jamie Gulley, chair of the Nursing Home Workforce Standards Board and president of SEIU Healthcare Minnesota and Iowa. “We’ve heard from so many workers that these wage increases gave them hope.”
Gulley made the comments during a monthly meeting of the workforce board in St. Paul, where both labor representatives and nursing home executives agreed it is important to prepare workers and employers for a delay that could stretch several months.
Federal approval still pending
The wage law depends on approval from the Centers for Medicare and Medicaid Services (CMS), which must authorize $18 million in federal Medicaid funding to support the higher wages. The state has committed an additional $18 million, creating a $36 million pool to help nursing homes cover the cost.
Under state statute, the wage standards are supposed to take effect 30 days after CMS signs off. However, Kristy Graume, DHS director of state government relations, told the board that the agency was unaware of a Dec. 1 deadline tied to the approval process.
“We weren’t fully aware of the state rule that required approval by Dec. 1,” Graume said. “We certainly share in your frustration, and we apologize.”
Graume said DHS only began a required 30-day public comment period earlier this week. Once that process concludes, the agency will submit its request to CMS. Federal officials then have up to 90 days to review the proposal.
Concerns about federal scrutiny
The timeline could be complicated by heightened federal scrutiny of Minnesota’s Medicaid program. CMS Administrator Mehmet Oz has previously warned the state that Medicaid payments could be withheld unless what he described as “systemic fraud” concerns are addressed.
Graume said DHS does not anticipate major issues, noting that federal approval of Medicaid amendments is typically routine. Requests for comment from CMS were not returned.
A historic wage floor
The nursing home wage law marks a rare return to industry-specific wage standards, a policy approach dating back to the New Deal era. In recent years, labor unions in several Democratic-led states have pushed for similar measures, but Minnesota is the first to apply it exclusively to nursing homes.
Supporters argue the move is necessary to stabilize a workforce plagued by high turnover. According to Gulley, roughly 36% of nursing home workers leave their jobs within a year, and the sector remains among the lowest-paid unionized occupations in the state.
The $19 minimum applies to non-credentialed staff such as housekeepers, dietary aides, and kitchen workers. That floor is scheduled to rise to $20.50 in 2027. Certified nursing staff would see starting minimums ranging from $22 to $27, depending on their role.
Industry opposition remains
Nursing home operators have opposed the wage mandate, including filing an unsuccessful lawsuit arguing the law forced them to choose between state requirements and federally governed labor agreements.
Industry representatives say they will comply once the law takes effect but emphasize that the promised funding is essential.
“The funding is the only realistic mechanism that allows providers to fund and sustain the higher minimum wages,” a spokesperson for LeadingAge Minnesota said.
For now, workers and employers alike remain in limbo, waiting on a federal approval process that has yet to officially begin.
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