On January 1, 2018, Minnesota’s minimum wage will increase. The increase is state-wide and affects all employees who are notexempted from the state’s minimum wage law. Some employers in Minneapolis will face a separate increase related to a recent city ordinance that also goes into effect January 1, 2018.
Minnesota Minimum Wage
Following January 1, 2018, large employers, those with annual gross revenues of $500,000 or more, must pay employees a minimum hourly rate of $9.65. This is an increase from the current rate of $9.50. Small employers, those with annual gross revenues of less than $500,000, must pay a minimum rate of $7.87, up from the current rate of $7.75. The minimum rate of $7.87 also applies to any employee 17 years old or younger and to new employees 18 or 19 years old during a 90-day training period, regardless of the size of the employer.
Minnesota still does not allow a tip credit. All tip-earning employees must be paid the appropriate minimum wage, regardless of the amount of tips earned.
Minneapolis Minimum Wage
The Minneapolis City Council recently approved a phased-in increase of the city’s minimum wage to $15.00 per hour. On January 1, 2018, large employers, defined as businesses employing more than 100 employees, must pay a minimum hourly wage of $10.00. On July 1, 2018, large employers will experience another increase and must pay a minimum hourly wage of $11.25. Small employers, those employing 100 employees or fewer, will see no additional increase in January, but their minimum hourly wage will increase to $10.25 on July 1, 2018.
Employees that work at least two hours within Minneapolis in a calendar week are entitled to the relevant city minimum wage for any time spent working in the city, regardless of where the employer is located. Under this rule, a calendar week runs from Monday to Sunday. The minimum wage, however, does not apply to workers who pass through Minneapolis as part of their job but do not make any work-related stops.
Lessons for Employers
In light of the new Minnesota and Minneapolis minimum wage increases, employers should increase their wage rates accordingly to avoid fines or litigation. Employers in Minneapolis should make sure to follow the higher wage requirements of the local ordinance. Employers that are not located in Minneapolis but send employees to the city for business purposes should factor the local wage ordinance into hours those employees spend working in Minneapolis.
If you have questions about Minnesota’s or Minneapolis’s minimum wage laws or if your company has been sued regarding wage and hour issues, contact one of the Minnesota wage and hour attorneys of Trepanier MacGillis Battina P.A. The firm can also assist you in drafting appropriate wage and hour policies for your business and auditing the exempt and non-exempt status of your employees.
About the Author:
Trepanier MacGillis Battina P.A. is a Minnesota wage and hour law firm located in Minneapolis, Minnesota. Their business and employment attorneys can be reached at 612.455.0500.