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Minneapolis minimum wage increase goes into effect July 1

Small businesses in the city must pay an hourly wage of $13.50 for the next year, while larger businesses are required to pay staffers $15 per hour.
Credit: SkyLine - stock.adobe.com

MINNEAPOLIS — Effective Friday, July 1, 2022, Minneapolis has increased the minimum wage required at small and large businesses, the third time since the city passed a wage ordinance in 2017. 

Small businesses with 100 or fewer employees must now pay an hourly wage of $13.50 for the next year, and large businesses, which saw an increase last year to $14.25, will have to pay staffers $15 per hour.

Small businesses saw their minimum wage rise to $12.50 per hour July 1, 2021, and will see them rise again when they hit $15 by July 1, 2024.

Tips will not count towards employee pay, meaning businesses must give employees the full minimum wage, regardless of how much gratuity servers receive. Workers are encouraged to report any wage theft violations online.

A statement from the city of Minneapolis said it believes tens of thousands of families and the economy will benefit from the minimum wage increases.

As Minneapolis gets closer to its overall goal, the city of St. Paul will also implement minimum wage increases businesses need to pay on July 1. 

Large businesses will have to pay their employees $13.50 per hour, a $1 increase from the previous year, while small businesses will pay an hourly wage of $12 for the next year.  

On July 1, 2023, large businesses in St. Paul will begin paying their employees a “city rate” of $15, small businesses will reach the $15 threshold by July 1, 2025, and so-called micro businesses will reach $15 in 2027. 

Although pay rates in Minneapolis and St. Paul continue to increase, the rest of Minnesota's minimum wage rate will remain lower than the state's two largest cities.

Large employers outside the Twin Cities now must pay at least $10.33 an hour, a change made in January to account for inflation, according to the Minnesota Department of Labor and Industry. Other state minimum wages, including small business employers, increased the same day to $8.42. 

Not everyone is thrilled with the continued wage increases. Business owners have cited the need to cut staff and increase menu prices to make up for increased payroll costs.  

RELATED: Minimum wage is rising in Minnesota starting 2022

RELATED: Applications for frontline worker pay open Wednesday

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