JOBS AND ECONOMIC GROWTH

Omnibus Jobs and Economic Growth Proposal

Governor Walz appropriated $91 million over the base budget for areas under the jurisdiction of Jobs and Economic Growth Committee. A large portion of his proposal includes $68 million for the infrastructure necessary to implement a statewide family and medical leave program. The Governor’s budget proposal also includes funding increases for important initiatives, including $8 million from the general fund for the Minnesota Innovation Collaborative and community prosperity grants and an additional $8 million for the Vocational Rehabilitation Program. Lastly, the proposal included $3.5 million for increased wage theft enforcement.

Senate Republicans were given a zero-budget target from their leadership, and in order to fund their priorities, they needed to cut (more than $8 million) important programs such as Pathways to Prosperity grants. Additionally, the Republican budget either defunded or underfunded several important economic development recommendations made by Governor Walz. This includes underfunding equity workforce development programing by more than $10 million. Workforce development funding is crucial in ensuring Minnesota has a workforce that meets the changing demands of employers.

The Republican omnibus bill also includes proposals that will hamper wages and benefit corporate growth by restricting a local unit of government’s ability to set a higher minimum wage than enacted under state law, or requiring additional benefits be granted to workers within its jurisdiction (also known as preemption). The preemption language is retroactive, meaning it would supersede local ordinances that have already taken effect.

This proposal passed the Jobs and Economic Growth Committee. This omnibus budget bill has not been scheduled in the Finance Committee at the time of this publication. (SF 2611)

Preemption

During the previous biennium, preemption became one of the Republican’s top priority proposals; unfortunately, it is making a return appearance this session. As was covered above, the proposal would strip local governments of their power to pass wage and benefit policies that go above the state’s minimums.

Minneapolis and St. Paul recently passed $15 minimum wage ordinances for individuals completing work within the two cities, and they additionally joined Duluth in enacting paid family and sick leave policies. These ordinances were adopted in recent years after residents pushed for changes with their city council members. Preempting these decisions would tell citizens that local democracy does not matter, that they are not allowed to improve their own communities.

In addition to prohibiting local governments from establishing a wage higher than the state minimum wage rate and paid or unpaid leave time, the language would also prevent local governments from regulating the hours or scheduling of work time that an employer provides to an employee. The proposal would effect ordinances enacted on or after January 1, 2017. (SF 2611)

This topic was originally heard in Local Government.

Paid Family and Sick Leave

Paid sick and safe time was a major component of Governor Walz’s budget and legislation is moving forward in the House. Unfortunately, Senate Republicans have spent very little time discussing this important policy idea.

The proposal would be an insurance program for workers and employers. Workers would be allowed to take paid leave for family care or to address an individual’s own health conditions. To cover the cost of partial wage replacement, employees and employers would contribute to the program (employer and employee both contribute .31%) based on an employee’s earnings. (SF 1060)

Equity Funding

In the face of extreme income inequity, the 2016 Legislature took historic steps in addressing workforce training and business development for unserved and underserved communities.

Since then, equity funding has received bipartisan support in both House and Senate Chambers. To continue this critical funding in the upcoming biennium, legislation (SF 2483) was introduced in the Senate. The omnibus proposal funds a portion of the proposal, but it falls short for several important development programs. (SF 2611)

Wage Theft

Wage theft is a serious issue for workers across the state. The Department of Labor and Industry estimates 39,000 Minnesotans are impacted by wage theft per year, resulting in $11.9 million in unpaid wages.

Provisions within the Senate omnibus jobs bill include enhanced penalties for wage theft; however, there are several issues with the proposal. As reported by the Department of Labor and Industry, “…[T]he wage theft policy language requires workers to make a written demand to their employers for wages they believe they are owed. This requirement could subject vulnerable workers who make a written demand to retaliation by their employers and make investigations by the Department more difficult…” (SF 2611)

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