State leaders celebrate frontline worker bonuses, unemployment insurance deal

Hundreds of thousands of Minnesota's frontline pandemic workers will get payments of about $750 and businesses will be spared a sizable tax increase as part of an agreement celebrated Monday at a State Capitol ceremony marking the biggest accomplishment so far this legislative session.

It was a moment workers and business owners had waited months to see, as lawmakers struggled to broker a deal until the final weeks of a session tinged with election-year politics.

"That $750 to the median income of Minnesota, that equals a month's rent. That equals groceries. ... That's money that can be put back into their savings accounts. So it is important," Mary Turner, president of the Minnesota Nurses Association, said as she tried to hold back tears. "But we still have work to do."

Nurses, long-term care workers, educators, first responders, child care providers, grocery store staff and others who could not work from home when COVID-19 hit will be eligible for the bonuses, DFL House Speaker Melissa Hortman said. Legislators estimated 667,000 people will qualify for the payments, totaling $500 million.

Monday's bill signing was ceremonial. DFL Gov. Tim Walz had already signed the deal into law Friday, the culmination of a long-fought dispute among legislative leaders.

"This is a positive. I'm really grateful to the legislators who worked on this and all the folks who kept the faith. It does bode well," Walz said.

Lt. Gov. Peggy Flanagan called the measure an "incredibly important first step." But she said leaders also must reach agreements on earned sick time, paid family and medical leave, and bolstering child care.

It will likely take 10 to 12 weeks before checks to frontline workers start going out, said Roslyn Robertson, the Department of Labor and Industry commissioner. A vendor will create a system over the next couple of weeks where workers can apply for the money, then there will be a 45-day application period, she said.

Walz said many people don't know they are eligible, and the state will be working to get the word out about the money and how to apply.

Legislators had agreed in June 2021 to spend $250 million on "worker bonuses" for employees who had to do critical in-person work throughout the pandemic. But negotiations over who should get the money and how much they should receive broke down in the fall. Heading into the current legislative session, Democrats pushed for a much bigger sum: They wanted the state to spend $1 billion and give out $1,500 checks. The new law is a compromise approach, state leaders said.

"This agreement took much longer than any of us had hoped for. But at the same time, I think the outcome was probably better than most expected," GOP Senate Majority Leader Jeremy Miller said.

The deal lawmakers reached last week includes $2.7 million to replenish the state's Unemployment Insurance Trust Fund that was drained by the flood of applications for unemployment benefits as workers were laid off during the pandemic, and to repay the federal government for money the state borrowed to cover unemployment payments.

Many businesses saw their potential unemployment insurance tax rates rise sharply this year to refill the depleted trust fund. Walz and Senate Republicans had pushed throughout the legislative session for a quick deal to channel some of the state's projected budget surplus of nearly $9.3 billion into the fund to prevent the tax rate hikes.

Businesses had to submit their payroll tax payments for the first quarter of the year by April 30, state officials said. Employers who paid at the higher rates can get an automatic credit in their unemployment insurance account, which will go toward next quarter's payment, said Steve Grove, the Department of Employment and Economic Development commissioner. That will land in accounts in about seven to 10 days, he said.

However, business owners who want the state to write them a check will have to wait longer, he said.

"If you need the cash now, it's going to take us — we don't know, a month, two months," Grove said.

Business owners Raji Eid and Tez Hailu stood beside Walz as he signed the legislation at Monday's event. Their company, EIDS Cleaning and Consulting in St. Paul, has been running on a shoestring budget, Hailu said, and the two said a major tax increase would have landed a significant blow.

"We would have been done. Honestly," Eid said. "Literally, it would have been impossible."