The city of Minneapolis launched a test program Thursday to subsidize some of the accounting costs small businesses face to comply with labor rules.
With about $125,000 in pandemic-related federal stimulus money, the city will pay for software and professional accounting help in the coming months for businesses selected through the application process.
Mayor Jacob Frey said the funds will boost small businesses still struggling to recover from the 2020 downturn and comply with complex labor rules.
“We’re not going back to the old normal,” Frey said at an announcement event for Los Andes Latin Bistro, a recently expanded restaurant on the city’s south side. “If we recover as a city, we want to help small businesses value their employees and value their customers.”
The nonprofit Metropolitan Community Developers Alliance will manage the application process on its website. Deadline is January. On the 20th, first-round winners will be selected on January 1st. 27.
If the pilot goes well, the assistance could become a regular city program, Frey and other city officials said. For businesses, funding will be a one-time thing.
Alyshia Jackson, owner of 1st Class Cleaning Services, said she may apply for a grant to create a better payroll system for her company.
“Even if it’s not going to be long-term, it’s going to be an education,” Jackson said. “We have the skills to deliver the service, but not all of us have the skills required to run a business to meet standards at the city, state or federal level.”
About five years ago, Minneapolis and St. Paul passed rules to ensure workers at all businesses get paid time off if they are sick or need to be safe after a crime or domestic violence.
But many business owners are unaware of these rules, or find it costly to maintain the records needed to show compliance. This has led to weak law enforcement and conflicts between officials and businesses.
“We want to build a relationship where we don’t just put people down,” Frey said. “We want to work with them.”
Emily Koski, a former small business owner and Target Corp. employee elected to the committee this year, said she has encountered small business owners who simply don’t know about the time off requirement, known as sick and safe time. Personnel management software can cost thousands of dollars, an expense some small businesses may not be able to afford, she said.
“When you see spending like this, you have to feel the return on investment,” Koski said. “But it can pay off for the business through employee morale and retention.”
At Los Andes Latin Bistro, tracking employee benefits has become more complicated after moving to the 120-seat location uptown two years ago, said Guillermo Quito, one of three brothers at the restaurant. He now spends most of his time doing administrative tasks for his 32-person staff, not dealing with customers.
“At first I did it all, but gradually I added accounting and payroll procedures,” Guido said. “I know how difficult it is to deal with more people and employees from the ground up.”
City officials said the pilot program may provide funding for about 50 businesses. They said the city will measure its success in part by the amount of demand in the application process next month.