On Friday, January 1st, 2021, the state of Minnesota raises the minimum hourly wage to account for inflation. More than 200,000 of Minnesota’s lowest-paid workers are getting a raise shy of 1%.
Large employers, those with more than $500,000 in gross revenue, will be required to pay at least $10.08 per hour, an increase of 8 cents an hour. For a full-time employee making minimum wage, the increase amounts to about $166 a year, to $20,966 annually.
For smaller employers, those with annual gross revenue below $500,000, minimum employee pay must rise starting by 6 cents to $8.21 an hour, according to the Minnesota Department of Labor and Industry.
The new pay rate for workers under 18 and the training wage for employees under 20 who have been on the job for fewer than 90 days also will be $8.21 per hour.
These new pay minimums do not apply to those located in Minneapolis and St. Paul. Those cities approved ordinances to raise their minimum wages to $15.00 under different timelines depending on employer size. All Minneapolis employers must pay $15 an hour by 2024, and all St. Paul employers must hit that mark by 2028.
In Minneapolis, employers with 100 or fewer employees are required to pay workers $11.75, with a raise coming July 1 to $12.50. For employers with more than 100 workers, the current rate of $13.25 climbs to $14.25 on that date.
In St. Paul, employers with five or fewer employees must pay workers at least $9.25 per hour, with a jump to $10 on July 1. For six to 99 employees, the minimum goes from $10 to $11 on July 1, and those with 100 to 9,999 workers will see the $11.50 rate move to $12.50.
By July 1, 2024, all workers in Minneapolis will have reached $15 an hour. All St. Paul workers will match that in 2027.
The federal minimum wage requirement is $7.25 and has not risen since 2009. In general, whenever there is a conflict between state and federal employment laws, the law which is more protective of the employee is the one which controls. There are some exceptions to this, so talk to a qualified attorney before making any decisions.
What does this mean to you? If you have employees who are currently at or near the minimum wage, be sure to review your compensation rates and adjust as needed. Also make sure that any employees paid using the Fluctuating Work Week method will never have their hourly rate drop to below these new amounts.
More information on this can be found on the website for Minnesota Department of Labor and Industry – Home | Minnesota Department of Labor and Industry (mn.gov).