Labor Standards Board vetoed by Mayor Frey, St. Paul leaders watching

MINNEAPOLIS (FOX 9) - A Labor Standards Board (LSB), that would be tasked with making recommendations on regulations for several business industries within Minneapolis, has been vetoed by Mayor Jacob Frey.

What we know

The Minneapolis City Council voted in favor of creating a Labor Standards Board on Nov. 14, with council members Linea Palmisano, Michael Rainville and LaTrisha Vetaw voting against its creation.

The proposal would task a 15-member panel with making recommendations to the city council regarding business wages, benefits, working conditions and more. The council would then vote on the regulations, which would then head to Frey for approval.

The appointed panel would consist of representatives for employees, businesses and workplace experts. It would cost taxpayers $150,000 per year, which would pay for the salary of a coordinator.

While supporters said the effort would give workers a voice on workplace conditions, business owners feared it could create costly hurdles from people who have never run a business before.

Throughout months of discussion – though no public comment was held on the proposal – council members backing the creation drew the ire of business owners who said their perspectives were either not being heard, or outright ignored.

"We really don’t know what to expect," David Benowitz, president of Craft and Crew Hospitality, which owns two restaurants in Minneapolis told FOX 9. "I fear that the little profits we do make in Minneapolis aren’t going to be there anymore, and we may have to reconsider how we’re operating."

Frey opposition

In a statement released prior to the council vote, Frey expressed opposition to the current proposal, saying, "The mayor has long supported a Labor Standards Board that is balanced, but the council’s proposal is not… The mayor’s position is simple: get participation from both business and labor and pass a balanced board that can benefit good governance."

As part of any LSB creation, Frey sought a 50/50 split between employers and employees, a 50/50 distribution between mayoral and Council appointments and a super majority requirement from board members for recommendations to advance to the Council.

"If we want this Labor Standards Board to work, business participation isn’t just important, it’s essential. Under the Council’s proposal, business participation is negligible – and everyone knows that’s not going to work," said Frey in a statement accompanying his veto decision. "Council must pass a board that is balanced and inspires collaboration from both labor and business… These businesses are part of what makes our city vibrant and unique. Workers and businesses alike deserve a government that hears their concerns, shares their ambition to make our city’s culture brighter, and is willing to do the work to find policy that unites us."

Businesses respond

In response to the veto, several business coalitions released the following statement: "We thank Mayor Frey for his decision to veto the Minneapolis Labor Standards Board resolution and for standing with the business community during this critical time for our city. The Labor Standards Board is an unbalanced and rushed policy that creates unnecessary hurdles for businesses, especially small, BIPOC-owned, and immigrant-owned businesses. At a time when Minneapolis is beginning to rebuild and revitalize, the city cannot afford to adopt policies that create uncertainty, deter investment and growth, and harm the businesses essential to its recovery.

Veto-proof?

The LSB proposal will now head back to the Minneapolis City Council, which could override Frey’s veto with a super majority vote of approval among nine members.

When the ordinance passed the council previously, it did so by a vote of 9-3.

St. Paul concerns

The regulatory board caught the attention of the St. Paul Area Chamber, which fears a similar board may eventually be proposed there.

In a statement on Thursday, the chamber said, in part: "Now is not the time to add further government regulation of our businesses. A similar proposal to the LSB in St. Paul would exacerbate the challenges businesses are already facing."

The chamber on Wednesday joined nearly 400 other businesses and organizations in signing a letter that said Minneapolis’ board would put "the revitalization of our city in jeopardy." It was addressed to Mayor Jacob Frey and the Minneapolis City Council.

Some business owners echoed the concerns expressed by the chamber.

"It seems to be the trend that St. Paul would follow suit with Minneapolis…." said Craig Ritacco, who owns The Lexington in St. Paul. "There would be concern about that, whether it’s a restaurant or a flower shop or really and truly any business within the cities. If they’re given regulations, and it affects their profitability…."