To the frustration of many employers and the excitement of many employees, it appears that Minnesota’s minimum wage will soon be on the way up. How much? That will be determined during the upcoming legislative session, but it looks like it will be significant.
The vast majority of Minnesota employers must comply with the federal minimum wage, which currently is $7.25 per hour. For the rare Minnesota employer that is not subject to the federal law, it must comply with the Minnesota Fair Labor Standards Act, which provides for a minimum wage of either $5.25 per hour for “small employers” (meaning gross revenues are less than $625,000 per year) or $6.15 per hour for “large employers” (meaning gross revenues are at least $625,000 per year).*
Last year, a bill was introduced in Minnesota that would have raised Minnesota’s minimum wage to $9.50 per hour. Ultimately, of course, nothing happened and the minimum wage was not changed. That likely will not be the case this year, as many legislators, particularly DFLers, support increasing the minimum wage. Governor Mark Dayton has also made it clear that he wants to see Minnesota’s minimum wage increased to at least $9.50 per hour.
While a change in the Minnesota minimum wage is likely, there is also a push to raise the federal minimum wage. U.S. Rep. Rick Nolan (Minnesota’s Eighth Congressional District) and Keith Ellison (Minnesota’s Fifth Congressional District) both support raising the federal minimum wage to $10.50 per hour. President Obama, in his 2013 State of the Union address, pushed to raise the federal minimum wage to $9.00 per hour by 2015.
Practice Pointer: Employees who are covered by both Minnesota and federal law get the benefit of whichever law is most favorable to the employee. So, if Minnesota’s minimum wage is raised to a higher level than the federal minimum wage, Minnesota employees will need to be paid the higher Minnesota rate.
* Because the federal minimum wage applies to employers whose revenues are at least $500,000, the Minnesota large employer rate currently is obsolete except where there is a specific exemption from the federal minimum wage.
