MINNEAPOLIS - Minneapolis is fine-tuning its plan to enact a $15 per hour minimum wage.
A draft ordinance presented to the Minneapolis City Council on Tuesday would require all employers to raise the minimum wage to $15 per hour gradually over the next five years.
Large businesses with more than 100 employees have a different incremental raise schedule from smaller businesses, though.
Large businesses would have to raise their hourly wage to $10 by Jan. 1, 2018. Then on July 1, 2018, it would go up to $11.25. On July 1 of each subsequent year it would go up one dollar: $12.25 in 2019; $13.25 in 2020; and $14.25 in 2021.
Small businesses with 100 or fewer employees would be allowed to raise their wages a bit more gradually every July, going to $10.25 by July 1, 2018; $11.25 in 2019; $12.25 in 2020; and $13.25 in 2021.
By July 1, 2022, though, both categories of businesses would need to be paying their workers $15 per hour.
Some city council members think small businesses should get more time to come into compliance.
"I think that small and local businesses add a beautiful culture to our city. These are local entrepreneurs that we want to be supporting. And I do think that they should have a more extended phase in than McDonald's," said Councilman Jacob Frey.
Michael Sherwood, owner of Pizza Nea in northeast Minneapolis, agreed. "The minimum wage proposal... I don't think it's a bad idea. I think bringing it in too fast would be a problem for many of the small restaurant owners and business owners, like myself," he said. Sherwood said he would like to see large businesses get five years for phasing in, while small businesses would get six to seven years.
Employees who receive tips are still covered under the draft ordinance. The coalition, Pathway to $15, says that ignores the intricacies of the service industry.
"We want everyone to have $15 but we just want differences in the accounting so that the tip credit is applied," said Sarah Webster Norton, a server and manager who runs the Facebook group "Service Industry Staff for Change."
According to Norton, that would mean on a slow day when a tipped employee might not reach the $15 an hour mark (including tips), the employer would need to make up the difference.
The Minnesota Restaurant Association conducted a survey that found that tipped restaurant employees in Minneapolis average $28.56 an hour based on their hourly wages and tips. The survey also showed that cooks average $13.89 an hour.
Norton said the group is concerned that by not counting tips into wages, restaurants will be forced to raise prices and move to different business models.
"It's unattended consequences. So what happens is that restaurants are forced to go to a non-tipping model and we've seen that happen in other cities," Norton said.
Mayor Betsy Hodges spoke out against this model, calling it a tip penalty, in a February 2017 post on her website.
Ginger Jentzen, executive director of "15 Now Minnesota," told KARE 11 in a statement, "City hall accepting $15 without a tip penalty is a victory for grassroots organizing by Minneapolis workers. But giving some of the biggest, most profitable corporations 5 years to pay $15 shows the fingerprints of the Chamber of Commerce on this proposal."
Moving forward, the city did talk about ways to focus on helping small businesses.
A public hearing on the draft ordinance will happen June 22.
The Minnesota Department of Employment and Economic Development says the living wage for a single person in Hennepin County is $15.25 per hour. At present, 48 percent of workers in Minneapolis, or about 150,000 people, earn less than that.
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