On the Legislative Horizon: Changes in Minnesota Minimum Wage Law
As the 2014 Minnesota Legislature comes into session, Minnesota Employer will keep you informed of bills that may affect the employer-employee relationship.
One such initiative will likely be a push to increase the Minnesota minimum wage. The initiative stalled in 2013, but many analysts and business chambers believe it will be renewed and passed into law in 2014. In 2013, the House bill would have increased the minimum wage to $9.50 an hour and tie automatic future increases to inflation. The Senate bill would have increased the minimum wage to $7.75 an hour. The federal minimum wage is $7.25, so if there are same or similar state law increases in 2014, they will trump the lower federal minimum wage.
Many employers object to the economic consequences of an increase in state minimum wage, of course. Some ameliorating proposals supported by some trade organizations are:
- A “Youth Wage” for employees under 18. This would set a lower minimum wage for a class of workers who, on the norm, are earning “first job” income.
- No city or county preemption: State law (the Minnesota Fair Labor Standard Act or “MFLSA”) would be state-wide and metropolitan area local governments could not create a separate, higher minimum wage.
- No automatic inflation adjustment.
- Tipped employee tier law: Unlike a “Tip Credit” by which employee tips are added to the employee compensation to determine actual, MFLSA wages, a tiered system works somewhat differently. Under this proposal, a tipped employee would still be paid the current minimum wage, and a “tier” would be set that would be higher than the new minimum wage. If the employee’s current minimum wage and accumulated tips meet the tiered number, the current minimum wage remains in place.
Takeaway: Minimum wage law will likely be the subject of important legislation in 2014. Minnesota Employer will keep you informed.