Minimum wage stays put (vetoed)

Gov. Tim Pawlenty vetoed a bill that would have raised the hourly minimum wage paid by large employers (companies with annual sales of $625,000 or more) to $6.75 as of July 24, 2008, and another dollar one year later.

For companies with annual sales of less than $625,000, the hourly minimum wage would have gone up to $5.75 and $6.75, respectively.

The “training wage,” which allows employers to pay a lower minimum wage to employees under age 18, would have increased to $5.35 an hour effective July 24, 2008, and up to $5.75 a year later. The training wage currently applies to employees under age 20.

In his veto letter, Pawlenty said that although he has supported minimum wage increases in the past, he could not sign the current proposal because it does not include a tip credit.

Minnesota is one of only a handful of states that does not recognize a tip credit at the state level, he said. “A tip credit is applied in 43 states for calculating the base wage for tipped employees. The tip credit is essential for the continued viability of many employers.”

Minnesota would have the seventh-highest minimum wage in the country, if the wage was enacted, Pawlenty said.

“I am willing to consider a bipartisan minimum wage bill next session if it allows for a reasonable increase, creates a tip credit, and does not unduly burden Minnesota’s employers and Minnesota’s economy.”

The federal minimum wage for nonexempt employees is $5.85. It is scheduled to go up to $6.55 per hour July 24, 2008; and $7.25 per hour on July 24, 2009.

Rep. Tom Rukavina (DFL-Virginia) and Sen. Ellen Anderson (DFL-St. Paul) sponsored the bill.

HF456/SF875*/CH320