Some workers can expect a pay increase this summer.
Minnesota’s minimum wage rate is increasing Aug. 1. Rates will increase again Aug. 1, 2016, as well.
The changes in place as of Aug. 1 will include:
- Large employers must pay at least $9 an hour. A large employer constitutes annual gross volume of sales made or business done of $500,000 or more. That wage is up $1 from the wage increase set on Aug. 1, 2014, and on Aug. 1, 2016, the wage will increase to $9.50 per hour.
- Small employers must pay at least $7.25 an hour. A small employer constitutes annual gross volume of sales made or business done of less than $500,000. Small employers increased from $6.50 an hour on Aug. 1, 2014, and on Aug. 1, 2016, it will increase to $7.75 an hour.
- Training wage rate is $7.25 an hour - a 90-day training rate paid to employees who are younger than 20 years of age. This wage has increased from $6.50 an hour on Aug. 1, 2014, to this year’s rate and will increase to $7.75 per hour on Aug. 1, 2016.
- Youth wage rate is at least $7.25 an hour, paid to employees younger than 18 years of age. These minimum-wage rates apply to all hours worked, whether part time or full time. Employees must be paid at least the minimum-wage rate, no matter how they are paid.
- And, no employer may take a tip credit against wages in Minnesota. An employee must be paid at least that minimum wage per hour plus any tips the employee might earn.
There are both state minimum-wage laws and federal minimum-wage laws, and the employee is entitled to the higher of the two minimum wages when an employee is covered by both the state and federal minimum wage laws.
There are some minimum-wage workers that will be exempt from the wage increase though.
Examples of those workers include bona fide executive, administrative or professional workers; babysitters; and volunteers of nonprofit organizations.
These increases are good. It’s understandable that companies want to make a profit, but they also need the employees to help make that profit.
Other than young people starting out or high schoolers, who can afford to live on these wages?
Other states are also upping their minimum wages over the next couple of years.
According to the National Conference of State Legislatures, Minnesota is about in the middle of the road for minimum wage rates compared with other states.
A handful of states have no minimum wage set. The lowest minimum wage is in Wyoming, set at $5.15 an hour. The highest is Washington at $9.47.
To help employers understand the requirements, the Minnesota Department of Labor and Industry has updated its minimum-wage fact sheets, available at www.dli.mn.gov/MinWage.