MTI's Response to Subminimum Wage Legislation

March 27, 2025

On behalf of the Minnesota Transformation Initiative (MTI), we are responding to the recent testimony opposing SF2149 and the mischaracterization of MTI’s work.

As correctly stated, from 2022-2024 MTI received $3.4 million from the state to support employment services providers transitioning from subminimum-wage employment and expanding their capacity to support people to find regular jobs in the community. These providers used their funding to strengthen provider workforces, expand geographic reach in rural communities, and develop services that better serve people with complex support needs. MTI also trained hundreds of staff from providers and lead agencies (counties) across the state, created a peer mentorship program for people with disabilities, and developed a framework to guide lead agencies to improve employment outcomes.

MTI supported eight providers to end subminimum wages. By the end of the grant period, seven had ended their use of subminimum wages, with only 2% (14 of 689) of individuals still earning subminimum wages. Those no longer receiving subminimum wages engage in various activities, including competitive employment, supported group jobs in their community, or non-work activities of their choice. No one lost services because their provider ended subminimum wages.

Having a coordinated state data system with person-level data will allow for better tracking of services and outcomes of people with disabilities receiving employment and day services in Minnesota. At the start of MTI’s project, no such data system existed in Minnesota, making it challenging to cite exact numbers.

MTI provides tailored support to providers to develop and implement plans to transform their business models, leading to diverse transformation approaches:

• One rural provider maintained its work options but ensured all jobs paid at or above minimum wage and also provided non-work recreation activities.
• Another provider, originally planning minimal changes, built a new service model from scratch to support competitive integrated employment. This involved process development, agency culture changes, and staff training.
• A provider fully committed to transforming their service model focused on culture change and training staff to expand job opportunities. They are actively working toward a goal to support 100 people to find regular jobs by the summer of 2026.
• A large Twin Cities provider worked intensively with hundreds of people previously earning subminimum wages to determine their next steps. Some pursued regular jobs, while many took a “stepping stone” approach, transitioning to group employment in community businesses with job coaches. Others chose to retire and engage in non-work recreation and leisure activities at a provider-owned building.
• A provider offering strong employment services leveraged the grant to expand placements in regular community jobs with competitive pay and strong non-work activities.

Individual stories illustrate the effects these changes have had in people’s lives:

• After working for decades in a provider-owned warehouse-like building doing simple, contracted tasks for subminimum wage, one individual transitioned to new options when the provider closed and sold the facility. A specialized employment staff guided them through their options: a group job alongside other people with disabilities and a job coach at a community business for minimum wage, finding a regular job in the community, or attending a center offering recreation and leisure activities. The person and their family chose a group job at one of the group jobs two days a week, spending the other three days participating in recreation and leisure activities at a center owned by the provider.
• After his provider ended subminimum wages, one individual continued working two days a week in a group clean job at minimum wage while receiving support at his apartment. Through MTI’s assistance, his provider added new services to support people to find regular jobs in the community. Expressing interest in a community job, he is now working with a trained staff person to identify his skills and interests to find a good job match in his community.

These stories from providers and from people illustrate that organizational transformation requires investment in time and resources. The provider grants, funded through ARPA, were time-limited, and while they successfully ended sub-minimum wage employment, several providers also set goals related to increase customized integrated employment opportunities, but the grant’s duration – less than two years – was not sufficient to fully achieve these goals. However, providers established the necessary infrastructure to advance their work, with several launching new employment services as the grant period ended. Data from the Rehabilitation Services Administration shows that the average time for job development – from eligibility to case closure – for people with intellectual disability in Vocational Rehabilitation Services is 734 days, or two years. It will take some time to see the full impact of the provider grants. MTI’s current grant funding allows for continued support to these (and other) providers in their business model transformations.

Sincerely,

The Minnesota Transformation Initiative