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Employer Alert: 2021 Minimum Wage Increases in Minnesota

On January 1, 2021, State wide minimum wage increases will take effect. The Cities of Minneapolis and Saint Paul also have their respective minimum wage increases effective July 1, 2021. Employers must comply with the State or City minimum wages and pay their employees accordingly. Failure to comply with these minimums can expose employers or business owners to wage and hour litigation – something that can be time consuming and costly.

Below is a summary of the minimum wages employers must pay to their employees depending on their size and in some circumstances, the city they operate in.

State of Minnesota Minimum Wage Rates Effective January 1, 2021:

  • Large Employers: employers with annual gross revenues of $500,000 or more.
 $10.08
  • Small Employers: employers with annual gross revenues less than $500,000.
 $8.21
  • Training Rage: 90-day training wage for employees under 20 years of age.
 $8.21
  • Youth Wage: employees under 18 years of age.
 $8.21

NOTE: In Minnesota, tip credits are not allowed against the minimum wage. Therefore, employers of tipped employees cannot use tips their employees receive to offset the above minimum wages.

Minnesota’s minimum wage applies to all hours worked and to both full-time and part-time employees.

Minnesota’s minimum wage is greater than the Federal minimum wage of $7.25 per hour; therefore, employers must pay employees covered by both state and federal minimum wage the higher of the two.

 

City of Minneapolis Minimum Wage Rates Effective July 1, 2021:

  • Large Employers: employers with more than 100 employees.
 $14.25
  • Small Employers: employers with 100 or fewer employees.
 $12.50

 City of Saint Paul Minimum Wage Rates Effective July 1, 2021:

  • Macro Employers: employers with more than 10,000 employees.
 $12.50
  • Large Employers: employers with 101 to 10,000 employees.
 $12.50
  • Small Employers: employers with 6 to 100 employees.
 $11.00
  • Micro Employers: employers with 5 or fewer employees.
 $10.00

Employers are encouraged to audit their employees’ wages to ensure compliance with the new minimum wage rates within the jurisdiction(s) they operate in.

For more information, contact Hellmuth & Johnson Employment and Labor Law Attorneys at (952) 941-4005 or (888) 343-3918.

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