DEED highlights workforce programs, fraud oversight and small‑business supports after enforcement impacts
February 19, 2026 | 2026 Legislature MN, Minnesota
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Department of Employment and Economic Development (DEED) Commissioner Matt Varelek and agency deputies briefed the Senate jobs committee on Feb. 18, outlining current economic development activity, workforce programs, fraud‑prevention work and DEED’s response to recent reports of economic harm tied to federal enforcement actions.
Varelek opened by describing DEED’s mission “to empower the growth of the Minnesota economy for everyone” and noted state strengths such as strong five‑year business survival rates and high median incomes. He cited recent large projects and credited programs including the Job Creation Fund, Minnesota Investment Fund and the Minnesota Forward Fund for supporting expansion and training in areas such as artificial intelligence, microelectronics and advanced manufacturing.
Deputy Kevin McKinnon told the committee that DEED tracked 122 announced projects in 2025 and that the economic development division includes broadband, labor market information and an international trade office. Deputies described small‑business financing delivered through nonprofit partners and DEED’s role in supporting community infrastructure and site preparedness.
On workforce services, Deputy Evan Rowe summarized state services for people who are blind or have low vision, vocational rehabilitation, and unemployment insurance performance. He noted the launch of the paid‑leave program (accepting applications from late 2025 and formally launched Jan. 1) and said more than 13,000 Minnesotans had been approved for paid leave as of early January.
Deputy Mark Majors reviewed training programs, including Pathways to Prosperity, youth employment programs, and Drive for 5 — a targeted initiative to prepare workers for high‑growth, family‑sustaining jobs in sectors such as manufacturing, health care and construction.
Several senators pressed DEED on oversight and reporting after a Legislative Auditor (OLA) review flagged missing mandated reports and past payments to grantees with overdue progress reports. Senator Pratt referenced earlier OLA findings that DEED released millions to grantees despite overdue reports and asked what steps the agency had taken. Majors said DEED reviewed OLA recommendations and committed to returning to the committee with details of the steps taken to improve compliance.
On localized economic harm tied to federal enforcement activities, Commissioner Varelek acknowledged business losses and described DEED’s tracking of third‑party estimates (for example, a recent Minneapolis estimate of total impacts). He said the agency has promoted shop‑local campaigns, coordinated with philanthropic emergency funds and is developing a legislative proposal for a $10 million response program comprising partially forgivable loans targeted at small businesses; Varelek said the administration would provide details and return to the committee.
Committee leadership scheduled follow‑up hearings: a dedicated session on Paid Family Medical Leave and a later informational hearing on the economic impact of recent federal enforcement activity.
DEED committed to providing requested documents and to describe the agency’s steps to improve grant reporting and fraud prevention.
Varelek opened by describing DEED’s mission “to empower the growth of the Minnesota economy for everyone” and noted state strengths such as strong five‑year business survival rates and high median incomes. He cited recent large projects and credited programs including the Job Creation Fund, Minnesota Investment Fund and the Minnesota Forward Fund for supporting expansion and training in areas such as artificial intelligence, microelectronics and advanced manufacturing.
Deputy Kevin McKinnon told the committee that DEED tracked 122 announced projects in 2025 and that the economic development division includes broadband, labor market information and an international trade office. Deputies described small‑business financing delivered through nonprofit partners and DEED’s role in supporting community infrastructure and site preparedness.
On workforce services, Deputy Evan Rowe summarized state services for people who are blind or have low vision, vocational rehabilitation, and unemployment insurance performance. He noted the launch of the paid‑leave program (accepting applications from late 2025 and formally launched Jan. 1) and said more than 13,000 Minnesotans had been approved for paid leave as of early January.
Deputy Mark Majors reviewed training programs, including Pathways to Prosperity, youth employment programs, and Drive for 5 — a targeted initiative to prepare workers for high‑growth, family‑sustaining jobs in sectors such as manufacturing, health care and construction.
Several senators pressed DEED on oversight and reporting after a Legislative Auditor (OLA) review flagged missing mandated reports and past payments to grantees with overdue progress reports. Senator Pratt referenced earlier OLA findings that DEED released millions to grantees despite overdue reports and asked what steps the agency had taken. Majors said DEED reviewed OLA recommendations and committed to returning to the committee with details of the steps taken to improve compliance.
On localized economic harm tied to federal enforcement activities, Commissioner Varelek acknowledged business losses and described DEED’s tracking of third‑party estimates (for example, a recent Minneapolis estimate of total impacts). He said the agency has promoted shop‑local campaigns, coordinated with philanthropic emergency funds and is developing a legislative proposal for a $10 million response program comprising partially forgivable loans targeted at small businesses; Varelek said the administration would provide details and return to the committee.
Committee leadership scheduled follow‑up hearings: a dedicated session on Paid Family Medical Leave and a later informational hearing on the economic impact of recent federal enforcement activity.
DEED committed to providing requested documents and to describe the agency’s steps to improve grant reporting and fraud prevention.
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