HHS proposes $12 program minimum wage for senior training program to use federal grant funds more fully

The Department of Health and Human Services asked the House Human Services Committee to approve House Bill 1066, a bill to allow the department to establish a state programmatic minimum wage for participants in the federally funded Senior Community Service Employment Program, saying a higher wage should increase participation and let North Dakota use more of an existing federal grant.

"North Dakota receives $7,800,000 per year under the Older Americans Act," said Jim Fleming, interim director of the vocational rehabilitation section and director of the child support section, while presenting the department request. He told the committee the specific CSEP grant is "$480,000 per year in federal funds." Under current federal rules, Fleming said, CSEP participants must be paid minimum wage and no more, so states that permit a higher program wage are better able to recruit older, low‑income participants when local entry wages are well above the federal minimum.

Why it matters: Fleming told lawmakers that average CSEP participation in North Dakota is about 20 to 25 people of an authorized 49 slots; low participation limits the department's ability to use the federal grant and pushes administrative costs onto state funds because federal rules cap administrative expenses at 13.5 percent of program expenditures.

The department proposed an initial program rate of $12 an hour, to be adjustable by administrative rule. Fleming said the department will monitor utilization and suggested rulemaking could later fine‑tune the rate to match local labor markets; he characterized $12 as a starting point that may not fully match private‑sector entry wages but would be more attractive than the federal minimum of $7.25.

Committee members asked about how that $12 figure was chosen and whether rulemaking could set a different rate. MR. Henry, who answered committee questions on procedural timing, said the $12 gives the department an interim rate that can take effect immediately while a rule‑making process—expected to take several months—proceeds: "The $12 provision gives us that interim number where we can see how that might work in the first 6 months of the new biennium and then see if we need to do a rule making to tweak the rate." (committee exchange.)

The department said CSEP placements must be with nonprofit employers that agree to provide training; the bill would not change the program's federal funding level and department witnesses said they are not requesting new appropriations. The department reported three temporary part‑time coordinators currently administer the program and that payroll for administration runs about $8,000 a month (~$72,000 per year).

No committee vote was taken during the HB 1066 hearing; the committee closed the record after testimony and questions. The department told the committee it expects to monitor utilization closely and may return with proposed rule changes if the interim rate requires adjustment.