The Workplace Justice Lab@RU is experimenting with small businesses in Minneapolis

Supporting Small Business to Meet & Exceed Minneapolis’s Labor Standards

Main Street Alliance and the Workplace Justice Lab @ Rutgers University, with support from the W.K. Kellogg Foundation, have entered into an exciting partnership to better understand the strategies that best support small businesses to create healthy, just, and equitable jobs through meeting and/or exceeding minimum labor standards.

While some businesses adopt a low-road strategy and a strong regulatory framework will need to remain in place in order to protect worker’s rights, we know that many businesses would choose a strategy that invests in their employees with the right government support and interventions.

We are particularly interested in supporting very small, immigrant and BIPOC-owned small businesses, where multiple challenges with language, capital and service access can hinder compliance. By more deeply understanding the key sectors and networks in which these businesses operate, our goal is to identify key moments and interventions that can set up businesses towards a high-road model. This is a first-of-its kind study to work on a vexing puzzle that can lead to significant benefits for workers, businesses and the local economy.

Currently, in most American cities and states, labor enforcement has been largely separated from small business support. Even when these functions are nominally in the same agency or office, they typically do not work together. This means that an opportunity to collaborate to both support small businesses and help them come into compliance with labor standards is lost. France and Spain among other countries utilize an integrated business support and enforcement model. While the firm is expected to come into compliance with the law, and there are fines and penalties applied, payment does not discharge a firm from its responsibility to reform and it is the inspector’s role to advise and guide the firm toward a higher road model.

We identified Minneapolis as a unique city for this project due to the history of strong small business and worker center organizing and the existence of both the City of Minneapolis Department of Civil Rights, Office of Labor Standards enforcement and the Minneapolis Small Business Office.

This project combines community organizing, academic research and a community round-table to identify strategies we can test in Minneapolis.

  • Organizing including in-depth interviews with small business owners and worker’s rights groups to better understand what leads to long-term labor standards compliance.
  • Academic research into Minneapolis’s labor law violation trends by industry sector, business size and demographics, as well as innovative public and private proposals and practices for supporting small businesses to increase high road business practices.
  • Round-table: Community, business and city partnership round-table to identify a strategy or strategies to implement based on discussions, expertise, and findings from the field assessment.
  • Capacity building: Work with small business owners and networks to identify the supports and capacities small businesses need in order to meet standards, adopt high-road practices, and strengthen their businesses.
Year One Review Executive Summary

On average, immigrant, black, indigenous, and people of color (I/BIPOC) owned businesses operate on smaller  margins, with significantly less capital and support, than white-owned businesses. These challenges, many of which stem from past and ongoing discrimination, also mean that I/BIPOC small businesses face more challenges complying with labor laws and account for a significant percentage of total complaints coming into local offices that enforce  labor standards.  

Traditional government approaches to labor law enforcement typically rely primarily on sanctions and fines. This punitive model doesn’t account for the lack of capacity and resources faced by I/BIPOC small businesses when attempting to come into compliance. This means that the systemic problems that give rise to labor violations are not addressed, and violations persist.  I/BIPOC small business owners, their workers, and the communities in which they operate are largely failed by this approach. City labor enforcement agencies recognize this problem but don’t have an alternative model. Our project aims to address the systemic racial equity issues that lead to non-compliance among these businesses before complaints reach the offices of labor standards enforcement. 

The Minneapolis Small Business High-Road Labor Standards Intervention Pilot Project: Year One Assessment Review

The Minneapolis Small Business High-Road Labor Standards Intervention Pilot Project seeks to provide services that support immigrant, black, indigenous, and people of color (I/BIPOC) owned small businesses so that they can create healthy, just, and equitable jobs through meeting and or exceeding minimum city labor standards. The Project is a partnership between the workplace justice lab@Rutgers University and the Minneapolis Office of Labor Standards Enforcement Division (LSED), and is supported by the City of Minneapolis, the W.K. Kellogg Foundation, and WorkRise.  

Minneapolis Small Business Pilot Update from Phase 1

The Workplace Justice Lab@RU, working with the Minneapolis Office of Labor Standards Enforcement Division has under taken an exciting pilot program, with support from the W.K.Kellogg Foundation and WorkRise, to support immigrant, black, indigenous, people of color (I/BIPOC) owned small businesses in creating healthy, just, and equitable jobs through meeting and exceeding minimum labor standards.

Introductory Training on Labor Law in Minneapolis for Bookkeepers & Accountants
Presentation slides
2024 Overview of Minneapolis Small Business Labor Law

While big businesses turn to their HR departments to understand new employment law, small business owners often turn to their community bookkeepers and accountants. To help expand the network of services providers able to support immigrant and BIPOC owned small businesses to both come into compliance with labor law and strengthen their back-office systems, we are focusing phase 2 of our pilot on a partnership with community bookkeepers. In this webinar, we provided an introductory overview of Minneapolis labor requirements to over a dozen bookkeepers servicing small businesses in the city. 

Bridging Small Businesses Support and Labor Law Compliance: A Minneapolis Case Study
Presentation slides
Webinar recording

Because of the unique challenges small businesses face, enforcement alone is not always enough to get and keep these businesses in compliance. Labor standards agencies need additional strategies to address underlying barriers to compliance and support small businesses to comply with the laws they enforce. 

In this webinar, we will explore the puzzle of how we can strengthen small businesses while also helping them comply with local and state labor standards. Currently, in most American cities and states, labor enforcement has been largely separated from small business support. Even when these functions are nominally in the same agency or office, they typically do not work together and the opportunity to collaborate and integrate these functions is lost.   

We will highlight a promising Minneapolis pilot that is braiding together small business economic development opportunities with labor compliance. We will hear from  Minneapolis’ Labor Standards Enforcement Division, workplace justice lab at Rutgers University researchers, Main Street Alliance, and the Metropolitan Consortium of Community Developers (MCCD) who are working together to provide critical back-office systems that small business owners often lack the time and resources to set up. The pilot will subsidize payroll services and bookkeeping services for 30-50 small business owners, focusing on those immigrant and BIPOC owners who have been systematically marginalized. The goal of the project is to set up small businesses for success and growth while also creating tracking systems that enable labor law compliance.

Webinar Presenters

Brian Walsh, JD,  has worked for the City of Minneapolis for over ten years. He built its Labor Standards Enforcement Division following passage of a Sick and Safe Time ordinance in 2016.

Mel Koe is the Minnesota Organizer for Main Street Alliance and builds power with small businesses to impact change. Mel enters this work with a public health lens and worked in different public health spaces prior to Main Street Alliance.

Andrew Wolf,  PhD, is a labor sociologist who received his PhD at the University of Wisconsin-Madison, and is a Workplace Justice Lab@RU Affiliated Scholar.

Tyler Hilsabeck is the Director of Small Business Development at the Metropolitan Consortium of Community Developers.  Prior to MCCD, Tyler worked for Bank of America and attended the University of Wisconsin-Madison.

Star Tribune Reports on Pilot Project's Launch

On December 15, 2022, the Star Tribune reported on the launch of the pilot project to provide subsidized payroll and bookkeeping services to small businesses with the goal of improving job quality and labor compliance. The City of Minneapolis provided seed funding for the pilot, and the program is a collaboration among the City, Workplace Justice Lab@RU, Main Street Alliance, and the Metropolitan Consortium of Community Developers.

wjl@RU receives major grant from WorkRise

The Workplace Justice Lab at Rutgers University is proud to receive a major grant from WorkRise, a research-to-action network on jobs, workers, and mobility based at the Urban Institute. The grant will support a pilot study in partnership with the City of Minneapolis Labor Standards Enforcement Division on Small Business High-Road Labor Standards Intervention to build the state of knowledge on promising programs and interventions aimed at strengthening upward economic mobility and career advancement for low-wage workers. The nine projects that received funding will test a variety of workforce strategies: digital upskilling for vulnerable workers, leveraging data science to improve equity and access to employment opportunities, or working with small businesses on improving job quality.

Minneapolis Small Business and Labor Enforcement Roundtable

In August 2022, we launched the Minneapolis Small Business and Labor Enforcement Roundtable, which brings together small business owners, community organizations, and government agencies and legislators to identify challenges to small businesses in raising job quality and pilot potential solutions.Janice Fine presents at 1st Minnesota Small Business Roundtable.