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Minn.: State Increases Minimum Wage

By Joanne Deschenaux  4/21/2014

Minnesota Gov. Mark Dayton signed legislation April 14, 2014, that will increase the state's minimum wage on Aug. 1 to $8 per hour for large employers. The wage for these employers— those that make more than $500,000 in gross sales each year—will increase to $9 on Aug. 1, 2015, and to $9.50 on Aug. 1, 2016. Beginning in 2018, the wage will be indexed to inflation to a maximum increase of 2.5 percent per year.

The law allows small employers in the state—those making less than $500,000 in gross sales each year—to pay a lower minimum wage. Their minimum wage will increase from $5.25 to $6.50 per hour on Aug. 1, to $7.25 on Aug. 1, 2015, and to $7.75 on Aug. 1, 2016. From 2018 on, their minimum-wage rate will also be indexed to inflation.

A 90-day training wage for 18- and 19-year-olds and a youth wage for workers under 18 will correspond to the minimum wage for smaller employers.  

According to Dayton's office, the minimum-wage increase means that more than 325,000 Minnesotans will receive a pay raise this year. Once the $9.50 wage takes effect, the legislation is expected to generate more than $470 million in additional wages for state residents each year.

Dayton is a member of the Democratic-Farmer-Labor Party (DFL).

Joanne Deschenaux, J.D., is SHRM’s senior legal editor.

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