- Minimum wage
- Minimum Wage Calculator
- Tip minimum wage
- Tip pooling and sharing
- Subminimum wage
- Other State’s Minimum Wage Information
Minnesota minimum wage laws set different minimum wages for large employers and small employers, as discussed below.
Minnesota’s current minimum wage for large employers is $10.33. MN Department of Labor and Industry: Minimum Wage
According to the Minnesota Department of Labor and Industry, the minimum wage for large employers will increase on January 1, 2023, to $10.59.
A “large” employer is an enterprise with at least $500,000 in gross annual sales made or business made (exclusive of excise taxes at the retail level that are separately stated) and that is not otherwise exempt from Minnesota’s Fair Labor Standards Act. MN Statute 177.24(1)(a)
Minnesota’s current minimum wage for small employers is $8.42. MN Department of Labor and Industry: Minimum Wage
According to the Minnesota Department of Labor and Industry, the minimum wage for small employers will increase on January 1, 2023, to $8.63.
A “small” employer is an enterprise with no more than $500,000 in gross annual sales made or business made (exclusive of excise taxes at the retail level that are separately stated) and that is not otherwise exempt from Minnesota’s Fair Labor Standards Act. MN Statute 177.24(1)(a)
Cost of living increases beginning January 2018
Beginning in August 2017, Minnesota minimum wage law began requiring the Department of Labor and Industry to conduct an annual review each August of its minimum wage and increase the minimum wage by the lesser of:
- 2.5 percent, or
- the percentage increase in the rate of inflation, as measured by the implicit price deflator, national data for personal consumption expenditures as determined by the United States Department of Commerce, Bureau of Economic Analysis in the 12-month period immediately preceding the August in which the review is conducted or during the most recent period for which the information is available.
Any change to the minimum wage takes effect on January 1 of the following year, with the first cost of living adjustment taking effect on January 1, 2018. In certain circumstances and prior to September 30 in a given year, the Minnesota Department of Labor and Industry may choose not to increase the minimum wage the following year. It may refuse to increase the minimum wage in a given year only if it finds, after consultation with the Department of Management and Budget, that the leading economic indicators indicate the potential for a substantial downturn in the state’s economy.
The Department of Labor and Industry must also consider the ratio of the rate of the calculated change to the minimum wage to the rate of change in the state median income over the same period of time. Prior to implementing the decision not to increase the minimum wage, the Department of Labor and Industry must conduct a public hearing and allow for written comments prior to the hearing and for twenty (20) days after. The Department of Labor and Industry may make adjustments to the minimum wage in subsequent years to make up for the lack of an increase in prior years. MN Statute 177.24(1)(f)
Minnesota employers must also comply with federal minimum wage laws, which currently set the federal minimum wage at $7.25. See FLSA: Minimum Wage.
If an employer chooses to pay employees minimum wage, the employer must pay those employees in accordance with the minimum wage law, either federal or state, that results in the employees being paid the higher wage. In most instances in Minnesota, the state minimum wage will apply as it generally guarantees a higher wage rate for employees than state law.
Youth minimum wage
Minnesota minimum wage laws allow employers to pay youth 17 years of age and younger a minimum wage that is lower than the standard minimum wage. The current youth minimum wage rate is $8.42. The youth minimum wage increases each year consistent with the cost of living increase to the standard minimum wage. MN Statute 177.24(1)(e), Minnesota Minimum Wage
Minimum Wage Calculator
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Tip minimum wage
Minnesota does not have a lower minimum wage for employees who regularly receive tips. Instead, those employees must be paid the standard minimum wage. MN Statute 177.24(2)
Gratuities (tips) are defined as sums of money paid by customers to employees for services rendered. They are the exclusive property of the employee who receives them. Gratuities and tips that are the exclusive property of employees include obligatory service charges if customers reasonably believe the charges are being paid for the services rendered by employees.
If an employer would like to retain obligatory service charges, it must give clear and conspicuous notice to customers that the obligatory charge is not a gratuity. The notice must be clearly printed on the menu, a placard, the bill, or other printed item given to customers. The font size on the notice must be at least 18-point (one-fourth inch) if printed on a placard or at least 9-point (one-eighth inch) on the other types of notices. MN Statute 177.23(9); MN Admin. Rule 5200.0080.
Gratuities paid by credit card must be paid to employees must be credited to the pay period in which employees receive them. Employers may deduct the proportional amount paid as fees to credit card companies from gratuities paid by credit card. MN Admin. Rule 5200.0080(7).
Tip pooling and sharing
Employers may not require employees to participate in a tip pool or tip-sharing arrangement. Employees may voluntarily and without coercion share gratuities or tips with other employees. However, an employer may:
- safeguard tips to be shared among employees and disburse shared tips to employees participating in a tip share or pool at the employee’s request;
- report the tip amounts received as required for tax purposes;
- post a copy of this information in the workplace for the employee’s reference
An employer may divide gratuities among more than one direct service employee when more than one such employee provides service to the customer or customers in a single situations, such as a banquet. MN Admin. Rule 5200.0080(8).
Employees with disabilities
Minnesota minimum wage laws allow employers to pay employees with disabilities a subminimum wage that is less than the standard minimum wage if they receive a permit from the Minnesota Department of Labor and Industries to do so. The wage rate may not be less than 50% of the standard minimum wage unless the employer has a permit from the US Department of Labor to pay less. No more than 10% of a for-profit company’s workforce may consist of employees with disabilities being paid a subminimum wage rate unless it receives a special permit. MN Statute 5200.0030
Minnesota minimum wage laws allow employers to pay employees under 20 years of age a subminimum wage rate of $8.63 for the first 90 consecutive days of employment. Employers may not displace any employees eligible for the standard minimum wage for the reason of hiring an employee at the lower wage rate. This includes partial displacement, including reducing an employee’s hours, wages, or employment benefits.
Minnesota minimum wage laws do not allow employers to pay apprentices a subminimum wage rate that is less than the standard minimum wage.
Minnesota minimum wage laws do not allow employers to pay learners a subminimum wage rate lower than the standard minimum wage.
Minnesota minimum wage laws do not allow employers to pay student learners a subminimum wage rate that is less than the standard minimum wage.
Minnesota minimum wage laws do not allow employers to pay student workers a subminimum wage rate that is less than the standard minimum wage.