ST. PAUL – Thursday, the Minnesota House of Representatives passed legislation to incrementally increase the state’s minimum wage to $9.50 by 2016. It will be the first increase in the state’s minimum wage since 2005.
The minimum wage would also be indexed to inflation beginning in 2018 under the oversight of the Minnesota Department of Labor and Industry (DOLI), helping to ensure workers earning the minimum wage will not fall behind as the cost of living increases in the future.
Currently, Minnesota’s minimum wage is $6.15 for large employers and $5.25 for small employers.
Rep. Michael Nelson (DFL-Brooklyn Park) said passage of the legislation represents a victory for Minnesota’s workers.
“This is great news for those hard working Minnesotans who, after putting in a 40-hour shift, still have trouble getting by,” Rep. Nelson said. “People working for minimum wage are mothers and fathers and college graduates. It’s not just teenagers at fast food restaurants. We need to reward hard work and this measure is one way we can help these families.”
Rep. Nelson was the original author of the bill raising the minimum wage.
Details of the legislation include:
· The minimum wage for businesses with gross sales over $500,000 a year would rise to $8 in August 2014, $9 in August 2015 and $9.50 in August 2016.
· The minimum wage for businesses under $500,000 a year in gross sales would rise to $6.50 in August 2014, $7.25 in August 2015 and $7.75 in August 2016.
· The $7.75 minimum wage rate would apply for large businesses in the following circumstances: as a 90-day training wage for 18- and 19-year-olds, all 16- and 17-year-olds and employees working under a J1 visa.
· Beginning in 2018, all wages would increase each year on January 1st by inflation measured by the implicit price deflator capped at 2.5 percent.
· The indexed increase could be suspended for one year by the DOLI commissioner – a public hearing and public comment period – if leading economic indicators indicate the possibility of a substantial downturn in the economy. In better economic times, the suspended inflationary increase or a lesser amount could be added back into the minimum wage rate in a subsequent year.
The bill will now move to Gov. Dayton’s desk for his signature.