Minnesota Increases Minimum Wage for Employees

cernypost

On April 14, 2014, Minnesota enacted legislation increasing the state’s minimum wage for employees. The last time Minnesota increased the state’s minimum wage laws was in 2005. The new law, which begins to take effect starting on August 1, 2014, gradually increases the minimum wage employers must pay their employees each year. By 2016, the minimum wage for large employers will be $9.50 per hour, and $7.75 per hour for small employers. Starting in 2018, the law will automatically increase the minimum wage to account for inflation, unless the Commissioner of the Minnesota Department of Labor and Industry determines otherwise.

The minimum wage an employer must now pay an employee will depend on whether the employer is a “large” or “small” employer as defined under the law.

Large Employers

A “large employer” means a company whose annual gross volume of sales is $500,000 or more. Every large employer is now required to pay each employee at least:

1. $8.00 per hour starting August 1, 2014;

2. $9.00 per hour starting August 1, 2015;

3. $9.50 per hour starting August 1, 2016; and

4. The rate established by the automatic increase starting January 1, 2018.

Small Employers

A “small employer” means a company whose annual gross volume of sales is less than $500,000. Every small employer is now required to pay each employee at least:

1. $6.50 per hour starting August 1, 2014;

2. $7.25 per hour starting August 1, 2015;

3. $7.75 per hour starting August 1, 2016; and

4. The rate established by the automatic increase starting January 1, 2018.

Automatic Increases

Beginning on January 1, 2018, the minimum wage will automatically increase each year at a rate of 2.5% (rounded to the nearest cent), or a rate to be determined by the Commissioner of the Minnesota Department of Labor and Industry. The Commissioner, however, may not increase the rate by more than 2.5%. The Commissioner may also determine that the minimum wage should not be increased if certain economic hardships exist at that time. However, the law permits the Commissioner to subsequently order a catch-up raise in addition to the rate increase for a following year.

 

About the Author: Attorney Steven M. Cerny is a Partner at JUX Law Firm and focuses on business and employment law, and litigation. 

Leave a Public Comment