City applauds the success of revolutionary small business labor compliance pilot

A unique, small business pilot partnership between the City of Minneapolis and the Workplace Justice Lab is proving to be revolutionary for small business owners who are immigrant, Black, indigenous, person of color (I-BIPOC). The Small Business High-Road Labor Standards Intervention Pilot began as an idea 18 months ago to strengthen and support I-BIPOC businesses and help them to comply with the City's labor laws. Today, Rutgers University officials joined City leadership, small business owners and supporters at Lutunji's Place Bakery, a pilot participant, to celebrate the first-year success of the project.

"We've got the most unique and innovative small businesses anywhere," said Mayor Jacob Frey. "When Minneapolis became the first in the nation to create this pilot program, we had one goal in mind: help our small businesses succeed. Thanks to MCCD, Main Street Alliance, Rutgers University, and our City staff, we've supported more than 50 local businesses - and most importantly, we're doing this work together."

After the civil unrest and enduring the pandemic, many I-BIPOC businesses continued to struggle with running their business while also trying to understand labor laws and comply with them. The City wanted to find a way to support the businesses and educate them on ways to use technology for their bookkeeping and payroll matters.

Ward 11 Council Member Emily Koski secured some $125,000 in ARPA funding. Her objective was to find ways to improve the livelihood and lives of these business owners and their employees and help them to comply the labor standards.

"The City's Labor Standards Division, Rutgers, and I decided to try a new approach, one characterized by curiosity, creativity, and collaboration. This pilot project is the first of its kind in the nation to connect business technical assistance services to labor standards enforcement," said Council Member Koski, a former small business owner herself. "And now, as the pilot project grows and adapts - we are better poised, and closer than ever, to tackle the problem."

The Civil Rights Departments' Labor Standards Enforcement Division (LSED) welcomed the opportunity to collaborate with the Workplace Justice Lab and local partners, including the Metropolitan Consortium of Community Developers, Main Street Alliance, and University of Minnesota's Humphrey School of Public Affairs.

LSED Director Kaela McConnon Diarra said, "This pilot project fills a vital need in the labor compliance field not only by providing the knowledge and tools for small businesses to comply with the City's labor laws, but also by thoughtfully assessing what those tools should look like and how providing support can be most successful. The Civil Rights Department's Labor Standards Enforcement Division prioritizes compliance with these laws while also seeing small businesses-especially Immigrant and BIPOC-owned small businesses-thrive in our City."

More than 100 small business applied to be part of the pilot in 2023. Partners selected 55 predominantly I-BIPOC small businesses in Minneapolis, many of whom were not in compliance with the labor law.

"Minneapolis is leading the way -- bringing together small business support with labor standards compliance.  Many cities across the country are facing similar challenges and are looking to learn as much they can from this Minneapolis pilot," said Janice Fine, Professor and Director of Workplace Justice Lab at Rutgers.

"I enjoyed being part of this pilot project and gained valuable insights into the vital role that small business play in their communities," added Zuhur Ahmed- Field Researcher at the Workplace Justice Lab at Rutgers. "They not only provide local employment but also significantly stimulate the economy. I was particularly impressed by how much these business owners value their employees and are dedicated to their success. Therefore, it is crucial to ensure they receive ongoing support.

The project offers support functions, including 10 hours of bookkeeping training and support, 12 months free electronic payroll, bookkeeping and timekeeping software. For Lutunji Abrahams, this pilot and the partnerships have proven to be transformational for her business and her life mission.

"The pilot provided invaluable assistance with my bookkeeping needs. Before participating, I struggled with understanding my financial statements. The training I received on QuickBooks Online, and bookkeeping was a game-changer," Abrahams shared. "I learned how to read profit and loss statements and understand key financial terminologies. This knowledge is crucial, even if you have a bookkeeper, because it allows you to better understand your business's financial health."

Mia Oi, owner of Ichigo Tokyo-Crepes, another pilot participants agrees.

"I've been doing payroll myself, and this program helped set it up as autopilot, which has really helped save me time. I also learned about bookkeeping which gave me a better understanding of the financial side of my business," Oi stated.

During the Phase One of the project, the partners learned the vital role bookkeepers from the community would play. They became trusted advisors for the business owners.

"It's been exciting being part of this pilot and helping many new small, immigrant and black owned businesses learn how to do their business books online," said Luis Rodriquez, Business Development Manager, Tax Action LLC. "Many small businesses don't like change and it takes a couple of times sharing information with them and walking through it to make it click. Implementing payroll system that calculates the compliance for them automatically is a win-win for the business and their employees."

Phase Two is now underway. It focuses on community bookkeepers as the most likely entrance point to help ensure small I/BIPOC businesses are labor compliant.

For more information, the Workplace Justice lab set up a Minneapolis project website.

You can view the full news conference on the City's YouTube channel.

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