Minimum Wage

What is the minimum wage rate?

Federal Law: The current federal rate is set at $7.25 per hour for businesses with gross receipts above $500,000 or those engaging in interstate commerce. Because the federal minimum wage is higher than Minnesotas minimum wage, it supersedes our state laws. Most employees fall under the jurisdiction of both state and federal law. Therefore, the federal rate applies to most Minnesota employers. Minnesota Law: Few businesses in Minnesota qualify for the states minimum wage. Under Minnesota law, businesses with more than $625,000 in gross receipts must pay a minimum wage of $6.15 per hour. However, most businesses in Minnesota fall under federal law because they have receipts over the federal $500,000 threshold or they participate in interstate commerce.
FEDERALLY COVERED EMPLOYERS $7.25 Any enterprise with an annual gross dollar volume of $500,000 or more or has employees engaged in interstate commerce SMALL EMPLOYERS (MN) $5.25 Any enterprise whose annual gross volume of sales made or business done is less than $625,000 and not federally covered LARGE EMPLOYERS (MN) $6.15 Any enterprise whose annual gross volume of sales made or business done is more than $625,000 and not federally covered TRAINING WAGE (MN) $4.90 New employees under age 20 during their first consecutive 90 days of employment

MN Senate DFL Caucus

Why raise the minimum wage?

Minnesotas minimum wage of $6.15 an hour ($12,792 a year), is not enough to support a family -- and is far below the federal poverty level of $23,550 for a family of four. A higher minimum wage will help families become less dependent on government programs. It is also important to note higher wages go back into the community, as workers buy groceries, clothing and other essentials. Even the current federal rate is low compared to when it peaked in 1968 ($1.60). If minimum wage had kept up with inflation since 1968, it would be well over $10 an hour today. When accounting for inflation, minimum wage was higher when President Reagan entered office ($8.61) than it is now ($7.25). During the 2013 Session the Senate passed a bill incrementally raising minimum wage to $7.75 for large employers and maintaining the wage rate of $5.25 for small employers. Alternatively, the House passed a bill increasing the minimum wage incrementally to $9.50 for large employers and $8.50 for small employers. As a result, more work needs to be done to reconcile the bills before a final vote in the legislature.

Who is covered?
The minimum wage law covers full and part-time employees, whether paid hourly rates, commissions, salaries or piece rates. Tipped employees are also covered; Minnesota does not allow a tip credit. Under current law, employers must pay their employees the minimum wage for all hours worked. Hours worked includes training time, waiting time, rest periods of fewer than 20 minutes and any other time the employees must be at work. Recent Changes for Home Care Workers: Under the new federal regulations effective in 2015, home care workers will also be covered by the Federal Labor Standards Act. As a result, they will receive at least a minimum wage of $7.25 an hour and overtime after 40 hours.

Who is not covered?

Babysitters Taxicab drivers Volunteers of nonprofit organizations People providing police or fire protection Employees subject to certain provisions of the U.S. Department of Transportation Other workers listed under Minnesota Statutes 177.23, subd. 7

Minimum Wage
Who makes minimum wage?
From August 2010 through July 2011, there were an estimated 93,000 hourly workers in Minnesota getting paid at or below minimum wage. Forty-five percent (42,000) of those workers are employed in the hospitality industry (minimum wage does not take tips or commissions into consideration). Additionally, 40% of all workers being paid minimum wage or less are older than 24 often need to provide for a family. Female hourly workers are more likely to get paid minimum wage or less in comparison to male hourly workers (7.2% female vs. 4.9% male).

How does Minnesotas minimum wage rate compare to other states?

Minnesota last passed a minimum wage increase in 2005. Minnesota has not kept up with the federal rate, and as a result, we are one of four states (along with Arkansas, Georgia and Wyoming) with minimum wage rates lower than the federal rate.
Consolidated State Minimum Wage Update Table (Effective Date: 01/01/2013)
Greater than Federal MW Equals Federal MW of $7.25 Less than Federal MW No MW Required

AK - 7.75 DE AR - 6.25 AL AZ - 7.80 HI GA - 5.15 LA CA - 8.00* IA MN - 6.15 MS CO - 7.78 ID WY - 5.15 SC CT - 8.25 DC - 8.25 FL - 7.79 IL - 8.25 MA - 8.00 ME - 7.50 MI - 7.40 MO - 7.35 MT - 7.80 NV - 8.25 NM - 7.50 OH - 7.85 OR - 8.95 RI - 7.75 VT - 8.60 WA - 9.19 19 States + DC

Does Minnesota law allow for a tip credit?

Minnesota does not allow tips to be counted against wages. A tip credit allows an employer of tipped employees to pay a rate less than the minimum wage by considering all or a portion of tips to be counted toward an employees total hourly wage. Most Minnesotans find the tip credit to be unfair. Those who are earning or have earned tips know the important role they play in paying their bills. Lowering an employees pay after they have provided quality service and earned more in tips is counterintuitive. Some Minnesota restaurants are taking a share of their employees tips by charging them a portion of the credit card fee to process a patrons bill. A tip credit is just another attempt to dip into the pockets of employees who can least afford it.

IN KS KY 4 States MD NE

TN 5 States

NH NJ NY NC ND OK PA SD * Californias Legislature recently approved a bill to increase the states minimum wage to $10 by 2016. TX Note: There are 10 states (AZ, CO, FL, MO, MT, NV, OH, OR, UT VT, and WA) that have minimum wages that are linked to a VA consumer price index. As a result of this linkage, minimum WV wages in these states are normally increased each year, WI generally around January 1st (except Nevada). 22 States Source: DOLI

Who do I contact with questions?

Department of Labor and Industry Labor Standards 443 Lafayette Road N. | St. Paul, MN 55155-4306 Phone: (651) 284-5005 | Toll-free: 1-800-342-5354 | Fax: (651) 284-5740 dli.laborstandards@state.mn.us | www.dli.mn.gov/LaborLaw.asp