Minnesota’s $6.15 hourly minimum wage is one of the lowest in the country and among only four states that allow employers to pay below the federal level of $7.25, according to the U.S. Department of Labor. But that could change after the House voted to increase the minimum wage for some to $7 this summer and as high as $9.50 for others by 2015.
Despite opposition from businesses, Winkler said higher wages would help the economy because low-wage workers spend an increase more quickly than anybody else.
“Low wage workers are more likely to spend a small increase in their income more quickly than other workers in the economy because every extra dime that they make goes to paying for the basic necessities of life,” Winkler said.
The bill would incrementally increase the minimum wage beginning this summer. Large employers would be required to pay a minimum wage of:
• $8 per hour beginning Aug. 1, 2013;
• $9 per hour beginning Aug. 1, 2014; and
• $9.50 per hour beginning Aug. 1, 2015.
Employers whose annual gross sales volume is less than $500,000 would be required to pay a minimum of:
• $7 per hour beginning Aug. 1, 2013;
• $8 per hour beginning Aug. 1, 2014; and
• $8.50 per hour beginning Aug. 1, 2015.
The bill would carve out lower rates for employees under age 20 during their first 90 days on the job. Wages could begin at $6.96 per hour, and increase yearly to $7.48 and $7.93 per hour, respectively.
Beginning in 2015, the minimum wage would be increased based on the rate of inflation. An amendment successfully offered by Rep. Paul Rosenthal (DFL-Edina) would stipulate that the rate of increase be 2.5 percent or the percentage calculated by the Department of Labor and Industry, whichever is less.
Of the 1.5 million hourly paid workers in the state in 2011, about 93,000 earned less than $7.25 per hour, according to the department.
Restaurant servers are considered among that class. Two amendments sought to account for tips.
Cash tips all go to the server, but when added to the bottom line of a credit card purchase, the employer can take out the credit card transaction fee. Rep. Jim Davnie (DFL-Mpls) successfully amended the bill so that employers could no longer take credit card transaction fees out of tips paid on credit.
“The tip belongs to the tipped employee,” Davnie said.
An amendment offered by Rep. Andrea Kieffer (R-Woodbury) would have required that servers’ wages and tips total at least $12 per hour. That measure failed on a tie vote.
Those opposed to increasing the minimum wage said it would give border states a competitive edge and lead to higher unemployment.
“It’s not a surprise that businesses are going to try to avoid these costs by raising prices,” said Rep. Pat Garofalo (R-Farmington). “Businesses will adapt and there will be technology. We are seeing this take effect already in Minnesota.”
For example, diners at some eateries can now enter their food and beverage orders on iPads rather than telling servers. “Worst of all, you are incentivizing the replacement of workers,” he added.
Shorter workweek for some
Previously, two provisions of HF763, sponsored by Rep. Jason Metsa (DFL-Virginia), were incorporated into the minimum wage bill. One would reduce the regular workweek from 48 to 40 hours before collecting overtime pay.
More than 30 states impose a 40-hour workweek for hourly workers; Minnesota sets the limit at 48 hours. But when the state’s largest economic driver is agriculture, seasonal weather fluctuations can wreak havoc on farmer’s work schedules.
On a 99-30 vote, members adopted an amendment offered by Rep. Jeanne Poppe (DFL-Austin) to keep farmers under current law, which is a 48-hour workweek.
Poppe was given a show of support from rural legislators on both sides of the aisle.
“In the agriculture world it is important that we use the 48 hours. It helps us to extend those days when we need to, when the weather is changing,” said Rep. Debra Kiel (R-Crookston).
In addition, any salesperson, parts person, or mechanic who primarily sells or services automobiles, trailers, trucks or farm implements would also be exempted from the 40-hour workweek provision, under a successful amendment sponsored by Rep. Joe Atkins (DFL-Inver Grove Heights).
Doubling family leave time
New moms and dads who currently have at least six weeks of family leave from their jobs under state law, would be allowed up to 12 weeks, which would match current federal law. The additional leave time would only affect employees at companies that employ between 21 and 49 workers, because the federal 12-week family leave law already applies to employees of larger companies, according to Winkler. The policy would apply to adoptive parents, as well.