House, Senate negotiators nix phase-out of subminimum wage in human services bill

Workers with a disability may continue to work for less than minimum wage.

The human services policy conference committee reached agreement Friday on the committee report to HF4392/SF4399* and sent it back to the House and Senate for a final vote.

An amendment offered by Rep. Peter Fischer (DFL-Maplewood) would have prohibited employers from hiring individuals with a disability and paying them less than the highest applicable minimum wage, as of Aug. 1, 2027, and would have phased out such practices for existing employees between Aug. 1, 2026, to Aug. 1, 2029. It failed on a tie vote.

Under section 14c of the Fair Labor Standards Act, certified employers may pay individuals with disabilities wages less than the applicable minimum wage.

Opponents previously testified that the program limits individuals with disabilities from realizing a higher earning potential as W2 employees in their communities. Proponents have testified that 14c workers derive purpose and meaning through their work, as well as opportunities to socialize with coworkers, where otherwise they would be in isolation at home.

The amendment would also have aimed to incorporate individuals with disabilities into state government jobs through proactive recruitment. Further, it would have required the state to help each 14c employer to transition toward paying employees the applicable minimum wage by Aug. 1, 2029.

“We know that there is trauma when you are given value that is so low,” said Sen. Alice Mann (DFL-Edina). “You deserve better than that and so I am voting ‘yes’ today.”

Sen. Paul Utke (R-Park Rapids) disagreed. “I feel the system is working well.” 

Recovery peers

Conferees adopted an oral amendment offered by Rep. Dave Baker (R-Willmar) to prohibit recovery community organizations from hiring or treating recovery peers as independent contractors by July 1, 2025, and to transition their current recovery peers to a status other than independent contractor by Jan. 1, 2025.

Rep. Luke Frederick (DFL-Mankato) said he brought this matter forward “in response to one specific bad actor” that, after learning of the proposed change, forced recovery peer employees to become independent contractors. Frederick indicated he anticipated that recovery community organization to continue hiring independent contractors until the deadline.

Lawmakers and members of the public have stated that recovery peers — who are in recovery themselves — are often unaware of benefits working as an employee as opposed to an independent contractor, particularly if they are exiting treatment programs or incarceration.

Frederick said wants the independent contractor status to come to a close as soon as possible. Baker indicated he preferred a one-year period that “gives those people a year to talk with their employer.”

[MORE: View a comparison of the bills]

Other bill provisions (by area) would:

Disability services

• exempt certain licensed facilities from local government rental licensing requirements;
• modify income review and documentation requirements for individuals enrolled in the Medical Assistance for Employed Persons with Disabilities program;
• adjust the qualifications of positive support analysts and positive support specialists at assisted living facilities relative to education or certification, training, and peer validation;
• require personal care assistant providers to use the enhanced reimbursement rate of 107.5% only for wages and wage-related costs, which may include any corresponding increase in the employer’s share of taxes and workers’ compensation premiums; 
• require the Department of Human Services to:
  • consult with, seek input and assistance from, and collaborate with stakeholders concerning the implementation and revisions of the MnCHOICES 2.0 assessment tool;
  • provide quarterly public updates on policy development and how recent stakeholder input is being incorporated into the development and implementation of Waiver Reimagine in its second phase; and
  • ensure the assistant commissioner of aging and disability participates in Waiver Reimagine Advisory Committee meetings.  

Aging services

• require assisted living facility directors to apply for a license from the Board of Executives for Long Term Services and Supports within 30 days of hire;
• eliminate education and experience requirements for assisted living facility directors and require them to have 30 hours of continuing education every two years on relevant topics;
• make available to residents any recent plan of correction, and within 30 days make a copy of the correction plan available to any individual who requests it; and
• modify long-term care options counseling by requiring hospitals to refer older adults who are at risk of nursing home placement to the Senior LinkAge Line for counseling in long-term care options.

Substance use disorder

• increase payment rates by 20% over the rates in effect Dec. 31, 2020, for services with medications for opioid use disorder, until new rates are statutorily established; and

• permit sober home residents to use legally prescribed and other nonaddictive medications to treat co-occurring substance use disorders and mental health conditions.

Deaf, DeafBlind, and Hard-of-Hearing Services

• modernize deaf and hard-of-hearing statutes; and
• modify membership of the Commission of the Deaf, DeafBlind & Hard-of-Hearing.

Miscellaneous

• remove expired mandated legislative reports from statute on homeless youth, and grants awarded to improve birth outcomes and strengthen early parental resilience for pregnant women who are medical assistance enrollees, are at significantly elevated risk for adverse outcomes of pregnancy and are in targeted populations.