Minneapolis Minimum Wage Increases

June 26, 2019
Publication
Inside HR
Compensation Planning

The Minneapolis City Council approved a $15 minimum wage ordinance that will affect hundreds of businesses and thousands of workers. Minneapolis becomes the first city in Minnesota to adopt a minimum wage higher than the statewide level, joining Seattle, San Francisco, Washington, D.C., and other large cities that have approved similar measures in recent years.

Key Provisions of the Ordinance

The $15 minimum wage will be phased in over five years for large businesses and seven years for small businesses. Large businesses are defined as having more than 100 employees, and small businesses as 100 or fewer workers.

  • The minimum wage ordinance will apply to employers with locations in the geographic boundaries of the city of Minneapolis. It does not apply to federal, state, county, or local government employers, except for employees of the city of Minneapolis.
  • Employees who are typically based outside the city, yet perform work in the city on an occasional basis (two hours a week), are required to comply.
  • The ordinance does not include an exception for tipped workers in the hospitality industry. This means all workers in the hospitality industry will be subject to the minimum wage, regardless of tips.
  • Employees under the age of 20 in a “city-approved training program” will receive a lower “training wage” for the first 90 days of a job. Details will follow in the coming months.
  • The ordinance does not apply to employees who are classified as exempt under the Minnesota Fair Labor Standards Act. However, most exempt employees earn more than $15 per hour, so the potential impact is likely minimal.
  • The law also imposes new notice, posting, recordkeeping, and anti-retaliation obligations with which employers must comply.
Key Takeaway for Employers

Employers based in Minneapolis, or employers who regularly send employees to Minneapolis to work, should comply with the stepped phases of minimum wage increases planned through 2024. The most recent increase to $11.00 for small employers (100 or fewer employees) and $12.25 for large employers (more than 100 employees) is effective July 1, 2019. Resources and FAQs can be found here

Source: Michael Hyatt, HR Government Affairs Director, MRA - The Management Association