Legislature votes to eliminate carve-outs to state minimum wage — and other labor news

Take a seat in the Break Room, our weekly round-up of labor news in Minnesota and beyond. This week: Legislature standardizes minimum wage; Uber and Lyft standoff at Capitol hangs over Minneapolis delay; Nurses’ union key priority on the ropes; Smith Foundry cited for endangering workers; new workforce development hub planned for Uptown; and NLRB fires back at corporate attacks. 

Legislature standardizes minimum wage

The Democratic-majority Minnesota House followed their Senate colleagues in passing a bill requiring businesses to pay virtually all employees the statewide minimum wage of $10.85 an hour. They eliminated the lower minimum wage of $8.85 an hour for small businesses, employees under 18 years old and foreign workers on J visas in the hospitality industry.

The bill, which passed 70-61 over Republican objections, also raises the threshold on annual inflation adjustments from 2.5% to 5%, allowing the minimum wage to rise more in years with high inflation. Progressive lawmakers in the Senate also introduced a bill to raise the minimum wage to $20 an hour by 2028, but it didn’t gain traction.

The minimum wage changes were part of a larger labor policy package, which is significantly smaller in scope than the sweeping labor policies Democrats passed last year after taking control of state government for the first time in nearly a decade.

“Last year we laid a solid foundation for worker protections in Minnesota, and this year, we’re building on that,” said House Labor Committee Chair Michael Nelson, DFL-Brooklyn Park, in a statement. “These policies will put Minnesota workers in a stronger position financially and will close loopholes and gaps that until now, have left workers vulnerable to mistreatment.”

The bill also mandates businesses include salary ranges in job postings, which Democrats hope will help reduce racial and gender pay disparities by giving job applicants more information going into wage negotiations. Four other states — Colorado, Washington, California, and New York — have enacted similar legislation, which can also be beneficial to employers in narrowing the applications they receive to workers who would accept the salary range, the Minneapolis Federal Reserve Bank recently reported. The Minneapolis Fed also noted challenges in enforcement, noting that in New York, some employers posted wide ranges like $50,000 to $180,000.

And the bill builds on the Legislature’s ban on noncompete agreements between employers and workers with a ban on “shadow non-competes,” or agreements between businesses and customers that restrict workers’ employment choices. For example, workers at a Minneapolis condo building faced losing their jobs after the homeowners association chose to hire a new property management company because the HOA was contractually banned from employing, either directly or indirectly, the service and maintenance staff that had worked there for years. Child care businesses also use the provisions to prevent parents from hiring their staff as nannies.

The bill also bans businesses from deducting credit card fees from tips and requires employers to maintain health care coverage for employees during a required period of leave for pregnancy.

Because there are differences between the House and Senate versions, the two chambers will have to agree to a final version before sending it to the governor’s desk for his expected signature.

The Legislature is also pursuing a host of other labor policies that are still being debated, including requiring a higher, prevailing wage for workers on affordable housing projects; allowing undergraduates and adjunct faculty at public universities to unionize; increasing penalties for misclassification; and a public infrastructure bonding package.

The politics of Minneapolis’ delayed Uber and Lyft rates

At a news conference last August before the Minneapolis City Council narrowly voted to pass minimum pay rates for Uber and Lyft drivers, Council Member Robin Wonsley said the ordinance was ready to go.

“There’s no reason to defer to the state … on policy or timeline,” Wonsley said. “If we move [the] implementation date back, we’re depriving drivers of the thousands of dollars in wages that they could be earning.”

Members of the council made a similar argument when passing the same minimum pay rates again last month, a day before a massive state analysis of more than 18 million trips was released.

Council Vice President Aisha Chughtai said during the council meeting in March that the state Department of Labor and Industry Commissioner Nicole Blissenbach told her they could anticipate the study the next day, but Chughtai said she wasn’t sure it would actually come out.

“It’s slowing down our work without a compelling argument to me,” Chughtai said.

That’s why it was remarkable that on Thursday the City Council voted unanimously to delay enacting the minimum pay rates that Uber and Lyft say they’ll leave the city over (and the entire Twin Cities metro in Uber’s case).

Council members said the delay would help state lawmakers finish their work at the Capitol, would give them the chance to dig into the state study and give alternative ridehail companies more runway to enter the market.

What does the legislative session have to do with the Minneapolis ordinance? The Senate has just a one-seat majority, and — according to Capitol sources — the author of the Senate version, Omar Fateh, DFL-Minneapolis, is dug in on his rates, which are higher than those supported by the state analysis.

The rates in the city ordinance — $1.40 per mile and 51 cents per minute — are significantly higher than the rates recommended in the state study, which was authored by a pair of economists supportive of drivers. That report said minimum rates — ranging from 89 cents to $1.20 per mile and 49 cents per minute — would ensure the typical driver earns the city’s minimum wage of $15.57 after paying for vehicle expenses and, in the case of the higher rates, benefits like health insurance, retirement savings and paid sick leave.

Lawmakers were in a similar situation last year: A standoff between Fateh, his DFL colleagues and the governor’s office. This seems to come down to Fateh agreeing to rates the companies can live with, or else Democrats making a deal with Republicans that will surely be worse for drivers and include steamrolling the Minneapolis City Council with preemption.

With two months of breathing room, Democrats have more time to try to make a deal and avoid having divisions — over approximately 20 cents per mile and 2 cents per minute — upend their entire agenda.

Senate Majority Leader Erin Murphy, DFL-St. Paul, said in an interview on Friday that she is proud of the work Fateh has done and has not heard him say he won’t vote for lower rates than what he’s proposed.

“There is a lot of chitter-chatter about the work that is happening in the Legislature,” Murphy said. “But what I have seen and experienced with Sen. Fateh has been steadfast, dedicated, and very committed work in pursuit of a statewide framework that can become law.”

Fateh was appointed to the governor’s task force on Uber and Lyft driver pay but pulled out. He declined a recent meeting with the governor’s office, legislative leaders and company representatives. One driver group, MULDA Members, says he no longer talks to them.

Murphy declined to say if she would support rates higher than those proposed in the state study or if she would allow Uber and Lyft to leave Minneapolis over rates higher than those proposed in the state study.

Nurses union’s key policy goal on the ropes

The Senate Labor Committee stripped a proposal (SF4444/HF4200) from its larger budget bill that would allow nurses and many other direct care staff to refuse to accept more patients once they raised concerns about staffing levels. The Minnesota Nurses Association launched a Facebook ad campaign last week targeting eight Democrats over the measure.

Senate Labor Chair Jen McEwen, DFL-St. Paul, said she was disappointed that she had to remove the provision, but there wasn’t enough support for it.

“I’m very unhappy about it,” McEwen said. “We’re having discussion right now amongst the advocates and different members to see if there’s something we’ll have enough votes for.”

The anti-retaliation bill is the nurses union’s second pass in two years at trying to win greater control over staffing levels, which they say are at crisis levels and driving workers away from the bedside. Hospital leaders say the measure would compromise patient care by allowing workers to refuse assignments.

Last year,  the House and Senate both passed a bill giving nurses greater say over staffing levels, but it was gutted after Mayo Clinic threatened to move billions in future investments out of state.

Smith Foundry fined for failing to protect workers

The south Minneapolis iron foundry that is accused of emitting more than twice the legal limit of air pollutants now faces citations from Minnesota labor regulators for failing to protect workers and train them in handling hazardous chemicals, the Sahan Journal reported.

Smith Foundry faces $15,300 in penalties from the Minnesota Occupational Safety and Health Administration for failing to provide adequate protection for employees exposed to carbon monoxide and crystalline silica, among other charges. Minnesota OSHA is also requiring Smith Foundry to address the violations and provide progress reports.

Smith Foundry is contesting the citations, which were filed in March and announced this week. Blois Olson, a spokesman for Smith Foundry, said in a statement that the company “has made improvements” on the issues identified by OSHA, Sahan reported.

Workforce development hub coming to Uptown

A coalition of labor unions and advocacy groups is buying the former YWCA Minneapolis in Uptown through a nonprofit called Tending the Soil, which plans to convert the space into a workforce development and job training hub, the Star Tribune reported.

The future Rise Up Center will have classrooms, a public gathering space, and offices for Unidos MN, SEIU Local 26, the New Justice Project and others. Unite Here Local 17, Centro de Trabajadores Unidos en la Lucha and Inquilinxs Unidxs por Justiciaare are also involved in the effort.

Sen. Scott Dibble, DFL-Minneapolis, presented a proposal to the Labor Committee this week that would give $9 million to Tending the Soil to support the renovation of the space, but that’s far above the budget target for the Senate Labor Committee. The proposal was included in the package but without a dollar figure.

NLRB responds to corporate attacks

Attorneys for Amazon, SpaceX, Starbucks and Trader Joe’s, in defending the companies against claims of violating labor laws, have all argued that the National Labor Relations Board is unconstitutional.

The National Labor Relations Board is a nearly 90-year-old institution created as part of the New Deal to protect workers’ right to unionize and act collectively to improve their working conditions.

NLRB General Counsel Jennifer Abruzzo, a Biden appointee, addressed the corporate attacks this week, saying the agency even with its limited resources will “not succumb to the pressures” in addressing the challenges, the Guardian reported.

“These esoteric arguments came about why? Because we dared to issue a complaint against SpaceX after it unlawfully fired eight workers for speaking about their workplace concerns. And then Amazon jumps on the bandwagon, Starbucks jumps on the bandwagon, Trader Joe’s, others get in on the action just because we’re trying to hold them accountable for repeatedly violating workers’ rights to organize and collectively bargain through representatives of their free choosing,” she said.