Minimum wage rates are being debated nationwide and in our own state. Laws often change to reflect new societal attitudes and conditions, and Minnesotan laws are no exception. Business owners may be concerned about the new minimum wage standard’s effect on their company’s bottom line, but also its impact on their hiring and retention of good employees.
Federal and state governments establish base levels of pay for certain employees “designed to create a minimum standard of living to protect the health and well-being of employees.” Where the federal and state minimum wage laws disagree, an employee receives the higher wage.
In 2014, Minnesota legislature adopted legislation raising the state minimum wages above the federal minimum wage. The new rates were implemented in three steps, while also adding two additional wage tiers:
| Tier | Effective 8/1/2014 |
Effective 8/1/2015 |
Effective 8/1/2016 |
Effective 2018 |
| Large employers (gross sales over $500,000*) | $8.00 | $9.00 | $9.50 | $9.65 |
| Small employers (gross sales under $500,000) | $6.50 | $7.25 | $7.75 | $7.87 |
| Training wage (employees age 18 and 19, first 90 days of employment) | $6.50 | $7.25 | $7.75 | $7.87 |
| Youth workers (under age 18)** | $6.50 | $7.25 | $7.75 | $7.87 |
| Certain hotel or resort workers who receive a lodging or food benefit** | $7.25 | $7.50 | $7.75 | Indexed to inflation |
* The previous cutoff was $625,000.
** Wage tier added by new laws.
Beginning in January 2018, Minnesota law requires minimum wage rates to be “ indexed, or adjusted for inflation.” When the economy struggles, the state has the option to suspend the annual minimum wage increase.
Minimum wage laws, however, don’t apply to all workers. The list of exempt employees is lengthy, but includes babysitters, taxicab drivers, employees providing police or fire protection, and certain transportation workers. And Minnesota employees who receive tips will also be paid the prevailing minimum wage.
If you are not sure whether your workers are covered by minimum wage laws, check with your attorney or with federal and state agencies like the United States Department of Labor or the Minnesota Department of Labor and Industry.
Make sure your business complies with Minnesota employment laws. Call Virtus Law at 612.888.1000 to make an appointment with one of our attorneys. Serving clients in Minnesota and nationwide.