Task Force on Eliminating Subminimum Wages meeting summary: May 10, 2022

· Location: Online meeting (Zoom)

· Participants listed below.

· Go to the task force webpage to find the formal meeting agenda, presentation slides and any other relevant documents from the meeting.

Agenda items

1. Task force updates

2. Identify challenges and themes; draft strategies to address challenges

3. Findings from state interviews of other states: Policies for state government operations that were identified

4. Subject matter expert presentations: Discuss statutes, laws and rules that need to change if subminimum wages are eliminated, plus options for state government policies

5. Task force discussion on options from subject matter experts from other states

6. Work groups: Talk about expectations for work group on laws, rules and policies for state government operations; launch work groups

7. Communications, education and engagement updates.

Activity: Task force members identify policy options that stand out

Individual task force members identified which policy options noted by one of the meeting’s presenters stood out for them. Policy options below were those selected by participants, except in the case of “Changing fee schedules and allowable reimbursements…,” which one member marked instead as having “Questions for clarification.” This information will be used to guide work group and task force attention as it relates to the laws, rules and policies for state government operations.

Notable options from the presentation on other states:

· Change fee schedules and allowable reimbursements under Medicaid waiver plans

· Increase cooperation, coordination and alignment among state agencies

· Encourage or require partners at the local level to align with a state's focus on competitive integrated employment.

Noteable options from presentations by Minnesota subject matter experts:

· Change administrative rules for the extended employment programs (Rules 3300.6000 - 3300.6070), including, for example, phase-out of grants for center-based employment by the 2026 fiscal year.

· Clarify the role and importance of current state strategy for making competitive employment the first and preferred outcome of supports and require informed choices by people with disabilities.

· Provide higher reimbursements or incentives for service providers to pay employees competitive wages

· Place time limits on how long subminimum wages can be used for employment service supports, which currently happens with pre-vocational services.

· Revise rules to require competitive wages for people supported by employment support services and pre-vocational services.

· Amend waiver plans.

Some task force members offered comments about the policy options they were asked to consider.

Presentations, questions, discussions and notes

Task force updates

Jake Granholm, Management Analysis and Development (MAD):

Jake reported that member Val Barnes stepped down from the task force. The Department of Human Services (DHS) is working to fill this position for a person with disabilities and is also working to fill an open seat for a representative of an employer authorized to pay subminimum wages.

Benefits, challenges, and draft task force strategies to address challenges/barriers

Karen Gaides, MAD:

Karen pulled from the April 12 meeting to discuss the benefits and challenges of eliminating subminimum wages that were identified by task force members. In the session law that set up the task force, the Minnesota Legislature instructed the task force to identify barriers and make recommendations to eliminate them. Karen shared the following draft task force strategies to address these challenges or barriers an asked for comments. Karen mentioned that the strategies were drafted to address the themes that emerged from more specific ideas shared by task force members in April. (For more, see slides 6-9 of the TFESW presentation, to be included with the May 10 meeting materials under the meetings tab on the task force website.)

These are the draft strategies that were shared:

· People with disabilities, and their families, have access to the necessary supports (like transportation, job coaching or day support services) to move into or maintain competitive, integrated employment and achieve their goals.

· Aspects of systems and policies shift to support and enable people with disabilities to access competitive integrated employment.

· Employers/providers have the necessary business/provider supports to change their current approach to competitive, integrated employment.

· People with disabilities are not stereotyped or marginalized in work settings; education and engagement is provided to change negative perceptions.

· People with disabilities, their families and employers have access to accurate information about competitive integrated employment.

Questions and clarifications:

A task force member noted the importance of education not only for employers of people with disabilities but also other people, including employers, who have not worked with a person with disabilities.

Policies for state government operations in states that shift away from subminimum wage jobs

Matt Kane, MAD:

Matt presented on policies from other states that dictate how state government operates to reduce or eliminate subminimum wages. He talked about information from interviews with officials in Iowa, Maryland, Ohio, and Oregon—states that the State Employment and Leadership Network suggested the state talk with because of their success in transitioning thousands of people with disabilities away from subminimum wage jobs. In the interviews, state officials highlighted important ways their state government has changed its approach employment for people with disabilities. This showed how their state government operates when it comes to subminimum wages and competitive integrated employment. (For more, see slides 10-18 of the TFESW presentation, to be included with the May 10 meeting materials under the Meetings tab on the task force website.)

Matt focused on the following six policies for state government operations:

· Change fee schedules and allowable reimbursements under Medicaid waiver plans.

· Define day services as supports for exploring and moving toward employment.

· Redefine subminimum wage jobs as preparation for a jobs with a competitive wage.

· Increase cooperation, coordination and alignment among state agencies.

· Encourage or require partners at the local level to shift focus from subminimum wage jobs to competitive integrated employment

· Limit the time allowed for pre-vocational exploration.

Questions and clarifications:

Because several of the policy ideas came from the state of Iowa, a task force member asked if Iowa’s shift away from jobs that pay subminimum wages was initiated by the legislature, outside groups or state agencies. Matt said that Iowa efforts at change depended upon a coalition of stakeholders and interested parties outside of state government and the state agencies. For example, Iowa’s leading Employment First organization, the Iowa Coalition for Integration and Employment, has 300 participants, including employment service providers.

Several task force members asked about topics that the task force will explore in upcoming months, including supports for workers transitioning away from jobs that pay subminimum wages and state efforts to identify more employers to hire people with disabilities. Matt said he will compile relevant information about each of these topics from the state interviews prior to the task force meetings where the particular topic will be discussed.

A task force member asked what the outcomes were in the four states from which representatives were interviewed and if people who moved out of jobs paying subminimum wages were left sitting at home without meaningful activities. Matt said many people who left jobs paying subminimum wages found jobs in the community paying minimum wage or higher, but not everyone. States worked with people to find alternative meaningful activities outside the home. State representatives reported that many of those who transitioned from facility-based and sheltered work paying subminimum wages were of retirement age and decided to retire, shifting from jobs to other activities.

Task force member Kristina Petronko mentioned that the state of Maryland produces an annual report on minimum wage and community integration for individuals with disabilities, which also notes outcomes. The 2020 report is found here.

State of Minnesota laws, rules, and policies for state government operations

Three state officials presented to the task force on statutes, laws and rules that would have to change if Minnesota eliminated subminimum wages and on policies for state government operations relevant to a shift away from subminimum wages. In the session law that set up the task force, the Minnesota legislature instructed the task force to report on “changes to statutes, laws, or rules required to implement the recommendations of the task force” regarding planning for the elimination of subminimum wages by August 1, 2025.

Sara Ellstra, Department of Labor and Industry (DLI):

Task force member Sara Ellstra from DLI said her agency focuses on enforcement of laws regarding subminimum wages and what Minnesota laws would need to change if the decision is made to eliminate subminimum wages. She clarified that her department is neutral on the issue. She said that eliminating subminimum wages in Minnesota would require the repeal of Minn. Stat. §177.28, Subd. 5 regarding DLI rules that allow subminimum wages and repeal of the state’s administrative rule for subminimum wage (Minn. R. 5200.0030).

Sara said the federal government requires that employers paying subminimum wages to workers with disabilities under section 14(c) certificates must follow federal and state laws. So, they would be required to pay minimum wages if Minnesota eliminated subminimum wages. Currently, the state’s minimum wage for large employers grossing more than $500,000, annually, is $10.33 an hour and the minimum wage for small employers grossing less than $500,000, annually, is $8.42 an hour. (For more, see slides 21-31 of the TFESW presentation, to be included with the May 10 meeting materials under the Meetings tab on the task force website.)

Questions and clarifications:

A task force member asked Sara from DLI why the number of Minnesotans with disabilities earning subminimum wages is said to be about 4,000 sometimes and as high as 6,000 other times. Sara said she is aware of federal Department of Labor data from 14(c) certificate holders on the number of workers paid subminimum wages. (This is the number that is closer to 4,000.) Ryan Merz from the Disability Services Division (DSD) at DHS said there are problems with the data sets that count who is paid subminimum wages. He cited a different source as more accurate – counts for conversations with persons earning subminimum wages as required under Section 511 of the federal Workforce Innovation and Opportunity Act (WIOA). Task Force member Lori Schluttenhofer said the US DOL data misses employers paying subminimum wages if their 14(c) certificate renewals are pending. Jake Granholm said task force members should review the initial task force background brief from MAD and DSD for more about the data challenges. (The brief estimates between 4,500 and 6,000 Minnesota workers with disabilities earn subminimum wages in 2021. See bullets on pages 2-3.)

Someone asked about the overall costs to employment services providers when securing approval for 14(c) certificates that allow them to pay subminimum wages. Lori said it is hard to give an exact number for overall costs, but it is “really cumbersome and costly in terms of resources and energy.” She said federal labor department rules are complex and interpretations change over time.

Amanda Jensen-Stahl, Department of Employment and Economic Development (DEED):

Task force member Amanda Jensen-Stahl from Vocational Rehabilitation Services (VRS) at DEED said her division would need to change some of the Minnesota Rules, parts 3300.6000-3300.6070 for Minnesota’s extended employment programs if the state eliminates subminimum wages. VRS defines three types of employment for people with disabilities: competitive integrated employment, community-based employment, and center-based employment. The state of Minnesota is in the process of a five-year phase-out of center-based employment, generally at subminimum wages, by fiscal year 2026. This policy option for shifting away from subminimum wages requires employment service providers to reduce the number people with disabilities earning subminimum wages under the Extended Employment program. It also allows those providers time to adjust their business model to emphasize competitive integrated employment. Amanda said 27 employment service providers receive grants under Extended Employment. (For more, see slides 32-35 of the TFESW presentation, to be included with the May 10 meeting materials under the Meetings tab on the task force website.)

Question and clarifications:

In response to a question from a task force member, Amanda said that because extended employment grants for center-based employment are being phased out, future grants will only be for competitive integrated employment. In response to another question, Amanda said VRS does not have data on outcomes for people who have left center-based employment. A task force member asked if the change for extended employment grants has led to the closure of any employment services providers. Amanda said it did not because VRS sill allows providers to use their grant funds, just not for center-based employment.

Ryan Merz, Department of Human Services (DHS):

Ryan Merz of the Disability Services Division (DSD) at DHS talked about home- and community-based service (HCBS) waivers for the federal and state Medicaid program “to meet the needs of people who choose to receive services and supports in their home or community, rather than in an institutional setting.” Minnesota’s plan for waivers is based on an agreement between DHS and the federal Centers for Medicare and Medicaid Services (CMS). Under the state’s approach to waivers, competitive wages for people with disabilities engaged in employment exploration services and employment development services are required. Subminimum wages are allowed for pre-vocational services and employment support services because waivers for these services do not address wages. Day support services offer wrap-around support.

Pre-vocational services take place in facilities or businesses controlled by employment service providers and are meant to advance people toward employment with competitive pay. Ryan said waiver funding for pre-vocational services is limited to 36 months for people who began receiving those services after January 1, 2021. Employment support services occur in integrated community settings and involve opportunities and experiences for people to have meaningful interactions with co-workers and other people in the community without disabilities.

Ryan said that if state law changes to eliminate subminimum wages and require competitive wages, no change would be needed in the state’s waiver plan. The plan currently requires that wages and benefits comply with federal laws and regulations and state statutes and rules.

Ryan suggested the following strategies for addressing subminimum wages in the context of HCBS waivers:

· Clarify the role and importance of current state strategy for making competitive employment the first and preferred outcome of supports and requiring informed choices by people with disabilities

· Provide higher reimbursements or incentives for service providers for employment at competitive wages

· Place time limits on how long subminimum wages can be used for employment service supports, as is currently done for pre-vocational services

· Revise definitions for employment support services and pre-vocational services to require competitive wages for people supported by those services

· Amend waiver plans.

Ryan said that Minnesota would need to amend its waiver plans for home- and community-based services with the federal CMS to allow significant changes to its employment service definitions, including, for example, requirements for competitive wages. Ryan said changes to waiver plans require specific steps and take about a year to carry out. Changes to the waiver plans would not fully disallow subminimum wages or 14(c) certificates for employers paying subminimum wages. (For more, see slides 36-45 of the TFESW presentation, to be included with the May 10 meeting materials under the Meetings tab on the task force website.)

Question and clarifications:

In response to a question from a task force member, Ryan said the task force could consider the strategies he noted as it develops recommendations. He reiterated that eliminating subminimum wages wouldn’t require a change in the state’s waiver plan for HCBS but added that some of the strategies would require changes to the plan. That would be true, for example, with new reimbursement rates for service providers to create incentives for employment at competitive wages.

Work groups: Expectations and launch for the work group on laws, rules and state government operations policies

Jake updated task force members on plans to use different work groups to focus on topics the legislature asked the task force to address. Work groups will include task force members and other subject matter experts. These work groups will develop recommendations and present their ideas to the full task force for consideration. Task force members are not required to participate in the work groups. The first work group will focus on state statutes, laws, rules, and state government policies, in line with the topics covered during this May 10 meeting. (For more, see slides 49-50 of the TFESW presentation, to be included with the May 10 meeting materials under the Meetings tab on the task force website.)

Communications, education, and engagement updates

Melissa Jimison and Misty Elliot, Public Sectors Consultants (PSC):

Melissa and Misty provided an update on the community engagement plan and the communications plan for the task force. Both were developed with guidance and input from the task force’s Engagement and Communications Work Group and shared with task force members in advance of this May 10 meeting.

PSC and the work group drew on information and examples shared by representative from the states of Iowa, Maryland, Ohio and, especially, Oregon. Melissa cited the following key lessons from these states:

· Success stories in many formats-(social media, videos, posters, etc.) were critical in all states

· People with disabilities and their families or caregivers need to identify with the people sharing their experiences

· Peer-to-peer voices helped neutralize worries about change and helped create space for learning

· No other state had coordinated listening efforts during plan development.

PSC is developing messaging about task force membership, background, purpose, engagement strategies and timeline. Messaging efforts will include use of an online engagement contact form from PSC that people can fill out to identify how they fit into the issue of subminimum wages. Anyone who fills out the form will receive a survey and some will be invited to participate in listening sessions, focus groups and interviews for feedback on engagement efforts. PSC is developing a social media package for messaging on Facebook, LinkedIn and Twitter. Task force members will receive this soon. For engagement efforts, Melissa said PSC is mapping out how to interact with different types of stakeholders and is developing success indicators.

Misty talked about the communications plan for educating specific audiences about the benefits of competitive integrated employment. PSC has outlined tactics and intended audiences for key messages. PSC will use success indicators and outreach measures to gauge impacts and shift approaches as needed. (For more, including timelines for engagement, communications, and education efforts, see slides 51-68 of the TFESW presentation, to be included with the May 10 meeting materials under the Meetings tab on the task force website.)

Question and clarifications:

A task force member asked what the difference is between a listening session and a focus group. Melissa said virtual listening sessions would solicit feedback from larger groups, while focus groups would engage perhaps eight to 12 people in deeper discussions about elimination of subminimum wages. She said focus groups might include people recommended by task force members or other key contacts on this issue.

Next meeting: Online from 10 a.m to 1 p.m., June 14

Participants

Task force members present:

· Larissa Beck

· Sara Ellstra

· Brittanie Hernandez-Wilson

· Amanda Jensen-Stahl

· Alex Junge

· Michelle Kamenov

· Debbie Luther

· Chris McVey

· Jillian Nelson

· Kristina Petronko

· Lori Schluttenhofer

· Raquel Sidie-Wagner

Others:

· Karen Gaides, MAD

· Jake Granholm, MAD

· Matt Kane, MAD

· Scott Dzurka, PSC

· Misty Elliot, PSC

· Melissa Jimison, PSC

· Erin Lammers, PSC