State officials recently announced that Minnesota workers who get minimum wage will receive a bit more money per hour. The minimum wage increase to occur across the state for those who qualify will begin on January 1, 2019.

Why is Minnesota Minimum Wage Increasing?

The change to minimum wage in Minnesota occurs in response to inflation. The amount that employees will gain depends on the size of the company, according to the established labor laws. For workers of companies with gross revenue of at least $500,000 annually, their hourly rate will increase from $9.65 to $9.86 per hour. In smaller organizations that make less than $500,000 gross per year, its workers can expect to jump from $7.87 per hour to $8.04, beginning on the first day of 2019.

Also set to increase is the youth wage rate. This is the amount that workers under 18 years of age make per hour. It will bump up to $8.04. This amount is also what employees under age 20 will make for the first 90 days of work at an organization.

Statistics on Minnesota Minimum Wage

How many workers currently are on minimum wage? The Minnesota Department of Labor and Industry estimates it to be about 250,000 people. This increase in hourly rate to account for inflation will hopefully help many people and their families rise above the poverty line.

Interestingly, increases in minimum wage in Minnesota has led to slower growth of jobs in the restaurant sector than Wisconsin, according to recent research, especially for young workers. For smaller businesses, they are hit by mandated raises to hourly rates for minimum wage workers; this increased rate doesn’t typically affect bigger organizations as much. Business owners can also bring in automation tools to take the place of minimum wage workers in efforts to save money.

Who is Exempt from Minnesota’s Minimum Wage?

Jobs exempt from Minnesota’s minimum wage are:

  • Volunteers at nonprofit organizations
  • Cab drivers
  • Babysitting individuals
  • Police officers
  • Firefighters
  • Certain workers at the U.S. Department of Transportation
    • Examples are mechanics and drivers
  • Government officials who were elected

As per state law, employers must put up posters in a workplace area where employees can see them easily. These free posters must be updated when the law changes in Minnesota.

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