What Is the Minimum Wage in Minnesota?
Minnesota has been raising the minimum wage over the years, and, alongside 18 other states, it did so again in 2019. Like many states, Minnesota’s minimum rate of pay differs based on a number of factors, including the size of the employer.
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2019 Minimum Wage in Minnesota: $9.86 per hour
By state law, the minimum wage for large employers is $9.86 per hour; for small employers, it’s $8.04 an hour. The state classifies a large employer as any business with over $500,000 in annual gross revenue, while a small employer generates less than $500,000. Regardless of the size of the employer, the state stipulates that they can pay $8.04 per hour to minors, as well as to individuals under the age of 20 during the first 90 calendar days of their employment.
Minnesota began raising the minimum wage in 2014, and the state tied its annual wage rate increases to the rate of inflation in 2017. In 2018, the state minimum was $9.65 for large employers and $7.87 for small employers. The 2019 increase took effect on January 1st.
MN includes cities when it draws the distinction between large and small employers. If you work for a city with a budget greater than $500,000 per year, there’s a good chance you’ll earn at least $9.86 per hour. However, there’s a chance you won’t — there are some exceptions, and some employees are exempt from the minimum wage requirement.
As a Minnesota resident, your employer doesn’t have to pay you the minimum wage if:
- You’re an agricultural worker who earns salary or is under 18;
- You’re a seasonal worker at a youth camp, carnival, circus, fair, or ski facility;
- You’re an executive, administrator, or professional who earns a salary, or an outside salesperson;
- You’re an employee at a nonprofit organization, an elected official, a police officer or firefighter, a taxi driver, a babysitter, a state conservation officer, a maritime employee on a private or US vessel, a worker with a disability that limits your productivity, or a member of a religious order employed at an institution operated by the church;
- You’re employed by a city recreational program, are under 18, and work for less than 20 hours a week;
- You’re a driver, driver’s helper, mechanic, or loader subject to the provisions of the US Department of Transportation;
- You’re employed at a single-family residence owned by a county home school.
Keep reading to find out how Minnesota figures the minimum wage for tipped employees.
Tipped: $9.86 per hour
MN doesn’t allow tip credits, meaning employers whose employees earn tips must pay them the minimum wage that applies to their organization. In other words, large employers must pay their tipped employees $9.86 per hour and small employers must pay $8.04 per hour. Employees take home their tips in addition to the hourly wage.
An employee who earns the Minnesota minimum wage and works a full-time, 40-hour workweek will earn a total of $394.40 before taxes.
An employee who earns the Minnesota minimum wage and works full-time, 40-hour workweeks for an entire year will earn $15,080 before taxes. However, if the employer isn’t open for business on any of the federally mandated holidays and the employee doesn’t earn holiday pay, the employee’s yearly income will be less than $20,508.80.
Overtime: $14.79 per hour
An employee who earns the Minnesota minimum wage will earn the federal overtime wage rate of 1.5 times the wage for any hours worked over 48 in a week, meaning they will earn $14.79 per hour for overtime. Unlike the federal overtime regulation, which specifies overtime as any hours worked in excess of 40 in a seven-day workweek, Minnesota specifies 48 hours as the boundary line between regular time and overtime.
That said, MN does adhere to the federal overtime mandate for certain employers. These types of employers must pay overtime for any hours worked over 40 in a seven-day workweek:
- Those who produce and handle goods for interstate commerce;
- Large employers with over $500,000 in gross annual sales;
- Hospitals, nursing homes, private and public schools, as well as government agencies.
Employees in Minnesota who are exempt from the standard minimum wage are also exempt from the overtime law. The Minnesota minimum wage is $2.61 higher than the federal minimum of $7.25 per hour. Furthermore, there’s one Minnesota city with a minimum wage higher than the rest of the state, there’s another planning on raising it, and the state’s minimum is scheduled to rise after 2019.
Minnesota Minimum Wage Increase News
In 2017, the City of Minneapolis passed an ordinance to raise the minimum wage year over year until it hits $15 per hour.
Minneapolis’ current minimum wage is $11.25 per hour for large businesses (those with more than 100 employees) and $10.25 for small businesses (those with fewer than 100 employees). On July 1st, 2019, it will increase to $12.25 for large businesses and $11 for small businesses.
It will continue to increase by about $1 on July 1st of every year until both small and large businesses must pay employees at least $15 per hour in 2024. Thereafter, on January 1st of subsequent years, Minneapolis will see minimum wage increases based on the rate of inflation.
On November 14th, 2018, the City of St. Paul passed an ordinance to increase the minimum wage to $15 per hour.
Beginning January 1st, 2020, St. Paul “macro businesses” with more than 10,000 employees must pay a minimum wage of $12.50 per hour. This also applies to the City of St. Paul and its municipal employees. On July 1st of 2022, macro businesses and the City must raise the minimum wage to $15 per hour.
The scheduled minimum wage increases for other St. Paul businesses are below.
Image Source: City of St. Paul
The “city rate” is the percentage increase tied to the rate of inflation, which will be announced on September 1st of each year.
As for Minnesota at large, the Department of Labor and Industry is required to announce the amount the minimum wage will increase by August 1st of every year. Each year’s increase is tied to the rate of inflation. There’s one caveat: the increase can’t be more than 2.5 percent of the previous year’s minimum wage.
Image Source: https://depositphotos.com/
This post was updated July 3, 2019. It was originally published July 3, 2019.