HHS asks committee to allow higher program wage for senior community service employment to boost participation

The House Human Services Committee heard from the Department of Human Services about House Bill 1066, which would allow the department to set a state programmatic minimum wage for Senior Community Service Employment Program (CSEP) participants.

Jim Fleming, interim director of the Vocational Rehabilitation Section and director of the Child Support Section at the Department of Human Services, said North Dakota receives roughly $480,000 per year from the Older Americans Act to operate CSEP, a training program for people aged 55 and older who have been unemployed at least six months or have incomes at or below 125 percent of the federal poverty level. Fleming told the committee federal regulations require CSEP participants be paid no more than — and at least — minimum wage, which in practice is the federal minimum wage where states rely on the federal standard. He said the current federal minimum wage of $7.25 makes the program unattractive compared with prevailing entry‑level wages in North Dakota, which can be roughly $20 an hour depending on location.

Fleming said the department proposes a programmatic minimum wage of $12 per hour as an interim, administratively adjustable rate to increase participation and thereby use more of the federal grant for training rather than returning funds. "By allowing us to pay the minimum wage, a higher minimum wage, we will more fully utilize the federal grant," Fleming said. He said North Dakota is authorized for up to 49 participants at a time under federal rules but currently averages about 20 to 25 participants.

Committee members asked how the $12 figure was selected and whether the department could instead rely solely on rulemaking authority to set the rate. Fleming replied the $12 figure is an initial estimate the department chose so it can begin implementation quickly; administrative rulemaking would follow and could adjust the amount. Department staff explained the 13.5 percent cap on allowable administrative costs for the program means underuse of program funds results in higher state costs to cover administration.

Representatives raised questions about the employers eligible to host participants (the program requires nonprofit employers), program duration and participant turnover, and whether increasing pay would exhaust slots. Fleming said the department hopes higher pay will attract participants and increase total training hours without exceeding the federal cap of authorized participants; he said rulemaking would allow the department to tweak the wage as utilization changes.

No witnesses identified formal opposition in the hearing and the committee closed House Bill 1066 without a committee vote recorded in the provided transcript.