On June 30, 2017, the Minneapolis City Council approved a municipal minimum wage ordinance, raising the minimum wage to $15 per hour for nearly all Minneapolis employees.
The requirement is scheduled to be phased in over a five-year period for large businesses and a seven-year period for small businesses. The ordinance defines large businesses as those who exceed 100 employees and small businesses as those who have 100 or fewer employees.
Under the ordinance, a person performing work for compensation on a full-time, part-time, joint, or temporary basis shall be considered an employee, regardless of if the person works within the geographic boundary of the city or not.
After the $15 phase-in is complete for large and small businesses respectively, the minimum wage requirement is scheduled to increase based on the inflation-indexing provisions of Minnesota’s state minimum wage law, with increases announced by September 1 of each year and effective on January 1 of the subsequent year. A complete phase-in schedule is pictured (right).
The minimum wage increase will apply to all employers residing in the city of Minneapolis. Currently, the ordinance would also apply to employees who are typically based outside the city but perform work in the city on “an occasional basis,” provided in a particular week the employee performs at least two hours of work for an employer within the geographic boundaries of the city.
The new ordinance is expected to impact over 70,000 workers.
Other notable takeaways:
- Employers will not be allowed to apply gratuities towards payment of the applicable minimum wage.
- During the first 90 days of employment, an employer may pay an employee, who is under the age of 20 and employed in a city-approved training or apprenticeship program, no less than 85% of the applicable minimum wage.
If you have questions regarding compliance with the new $15 minimum wage ordinance, please contact your North Risk Partners advisor. Don’t have an advisor? No problem. We’ll help you find one.
This regulatory update is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.