House passes bill to increase the minimum wage

St Paul, MN – Today, the House passed a bill to increase the state’s minimum wage to $9.50 by 2016. The minimum wage will also be increased to inflation starting in 2018 to ensure the value of the minimum wage does not fall over time.

To accommodate concerns raised by small businesses, there will also a lower rate of $7.75 for employees of small businesses and for workers under 18. The bill, which passed the Senate yesterday, now goes to the Governor to be signed into law.

“Before this bill, Minnesota’s minimum wage was $6.15,” said Rep. John Persell (DFL – Bemidji). “$6.15 was an embarrassment to Minnesota and all businesses I know of paid more than that. I’m happy to see us pass a bill that increases wages for Minnesota workers while setting a lower wage for small businesses and young workers. Those two provisions will help businesses phase in this new minimum wage.”

More than 357,000 workers will get a pay raise when the bill is fully implemented. Of those workers, 45 percent have some college education, 57 percent, or 200,000 are women, and 62,850 are parents. And 14,200 of those are parents are the sole wage earner in their household.

“More and more families are getting by on low wages,” said Rep. Roger Erickson. “But only because they rely on public assistance to make ends meet. This bill will help workers get a much needed raise, but it will also help those families rely less on public support programs that are funded by all taxpayers across Minnesota.”

Details of the bill include:

• $9.50 minimum wage for businesses with gross sales over $500,000 in 2016. $8.00 in August 2014, $9.00 in August 2015.

• $7.75 minimum wage for businesses under $500,000 in gross sales in 2016. $6.50 in August 2014, $7.25 in August 2015.

• The $7.75 minimum wage rate would also apply for large businesses in the following circumstances: 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%.

• The indexed increase could be suspended for one year by the Commissioner of DOLI if leading economic indicators indicate the possibility of a substantial downturn in the economy. The suspension could only be implemented after a public hearing and public comment period. 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 now goes to the governor to be signed into law.