The minimum wage in Minnesota increased this January 2021, and there are plans for that trend to continue. The North Star State is also doing a few things differently with its hourly remuneration, including considerations for business size, regional area, worker’s age, and experience. It’s a midwestern minimum wage trendsetter with flexible legislation that benefits both business and worker.
US-Turkey Capital Sets Multiple Minimum Wages
According to the Minnesota Turkey Growers Association, the state is first-rate in thanksgiving bird production. It turns out that there are more turkeys raised in a year than there are people in California. While that title is hard to top, minimum wage legislators made their mark with a unique approach that attempted to balance employer and employee interests.
For a business classified as a small employer, the minimum wage currently sits at $8.21 an hour. To fit this category, an enterprise must have annual gross revenue of $500,000 or less. Any employer bigger than that must pay a minimum wage of $10.08. The Department of Labor and Industry estimates that it will affect an estimated 206,000 jobs – or 8.5 percent of total employment.
Minneapolis and St. Paul Strike Out on their Own
Two of Minnesota’s most populous cities have chosen to make their own minimum wage rules. In 2017, Minneapolis’s city council voted to increase the minimum wage every year until it reaches $15/hr in 2022. Like its state counterpart, the city also has a separate rate for small businesses with less than 100 workers. In this case, employers can expect incremental increases until reaching the mandated $14.50 an hour by 2024. Future upticks will be indexed to inflation.
Minneapolis’ minimum wage decision proved to be a controversial one. The city follows a handful of other U.S. cities, such as Seattle and San Francisco, who also raised their minimum wages. Not surprisingly, Minneapolis-based manufacturing supplies company Graco Ltd. took issue with its local government pushing the boundaries of its authority. The business launched a suit to prevent the pay hike but lost that battle when Minnesota Supreme Court unanimously voted to uphold the minimum wage law in 2020.
St. Paul has a different set of rules but is similar in spirit to the state’s capital. The city takes it further by breaking employers into three categories — micro-business, small business, or a large business. Despite the difference, all roads still lead to a minimum wage standard of $15.
Minnesota Minimum Wage for Youth, Trainees, and Tipped Employees
Like many other states, Minnesota has a different hourly wage for youth under 18 years of age — this is $8.21 an hour. Additionally, there is a 90-day training wage for employees under 20 years old that sits at $8.21 an hour. These are also set to increase in step with the standard minimum wage as long as economic conditions remain favorable. As far as tipped employees go, Minnesota breaks from other states and doesn’t allow employers to pay a lower wage to those who receive gratuities. A worker must receive minimum pay along with whatever tips they might earn.
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Photo by Kate Townsend on Unsplash
Lindsey is a freelance writer in the personal finance and lifestyle sphere. When she’s not at her laptop, she is likely teaching herself a new hobby with a high potential for injury – such as skiing or cooking. Connect with her on LinkedIn and Twitter.
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