If you have employees who work in Minneapolis or St. Paul, be sure to comply with the minimum wage rates in each of those cities. Each city’s minimum wage rates apply to all time worked within the respective city. An employee who typically is based outside of Minneapolis or St. Paul, as the case may be, is covered by the city’s minimum wage during any week in which the individual works at least 2 hours within the city.
The Minneapolis and St. Paul minimum wage rates are higher than the federal and Minnesota minimum wage rates, and they increased on July 1, 2022, as part of the gradual increase to eventually reach $15.00 per hour. The minimum wage rates below are the ones applicable to the majority of employers and employees. Both cities provide for slightly reduced rates during the first 90 days of employment for certain employees who are under the age of 20 and subject to additional requirements.
Minneapolis Minimum Wage Starting July 1, 2022
Effective July 1, 2022, the minimum wage in Minneapolis increased to $15.00 per hour for large businesses and to $13.50 for small businesses. Note that the rate for large businesses will increase again on January 1, 2023, to account for inflation to $15.19 per hour. For purposes of the Minneapolis minimum wage, large businesses are defined as employers with more than 100 employees, and small businesses are defined as employers with 100 or less employees.
St. Paul Minimum Wage Starting July 1, 2022
Effective July 1, 2022, the minimum wage in St. Paul increased to 13.50 per hour for large businesses (more than 100 employees), $12.00 per hour for small businesses (100 or fewer employees), and $10.75 per hour for micro businesses (5 or fewer employees). For macro businesses (more than 10,000 employees) and the city of St. Paul, the St. Paul minimum wage rose to $15.00 per hour, and will increase to $15.19 per hour on January 1, 2023.
Business Size is Based on All Employees, Regardless of Where They Work
When determining business size, all individuals who perform work for compensation, whether full-time, part-time, joint, or temporary employees, must be counted, without regard to whether or not they work in Minneapolis or St. Paul. Business size for each calendar year is based upon the average number of employees who worked per week during the previous calendar year. For a new business, business size for the current calendar year is based upon the average number of employees per week during the first 90 days after the first employee began work. Special and more complex rules apply for franchises and full-service restaurants with multiple locations.
Employer Action Item: Employers should review their pay practices to ensure they are paying employees in accordance with applicable law. Employers also should not forget about the Minnesota and Minneapolis wage theft ordinances, both of which require that affected employees receive written notice of any wage changes.