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House and Senate agree on legislation to increase the minimum wage

Monday, April 7, 2014

Vote expected in House and Senate this week

St. Paul, MN – Today, House and Senate DFL leaders and key legislators announced they have reached agreement on legislation to increase the state’s minimum wage. The agreement would increase the minimum wage to $9.50, phasing the increase in by 2016. The minimum wage would also be indexed to inflation beginning in 2018 under the oversight of the Minnesota Department of Labor and Industry, helping to ensure workers earning the minimum wage will not fall behind as the cost of living increases in the future.

“We are pleased to reach agreement on a strong minimum wage that will help Minnesota workers, and in doing so, strengthen Minnesota’s economy,” said Speaker Paul Thissen. “While Minnesota’s economy is improving, there are too many Minnesotans who work hard every day but cannot make enough to make ends meet. It’s time to raise the wage and make hard work pay in Minnesota – now and into the future.”

“Achieving a meaningful increase to Minnesota’s minimum wage has been our priority from the start of session, and today's agreement puts us very close to passing $9.50 on to Governor Dayton,” said Senate Majority Leader Tom Bakk. “We value work in Minnesota, and our minimum wage ought to reflect that. Lifting up our lowest paid workers is good for families, it’s good for our communities and it’s good for our economy.”

The agreement to raise the wage is the product of work by House and Senate bill authors, minimum wage coalition supporters, and House and Senate DFL leaders.

Details of the agreement include:

  • $9.50 minimum wage for businesses with gross sales over $500,000 in 2016. $8.00 in August 2014, $8.50 in August 2015.
  • $7.75 minimum wage for businesses under $500,000 in gross sales in 2016. $6.50 in August 2014, $7.25 in August 2015.
  • The $7.75 minimum wage rate would also apply for large businesses in the following circumstances: 90 day training wage for 18 and 19 year olds, all 16 and 17 year olds and employees working under a J1 visa.
  • Beginning in 2018, all wages would increase each year on January 1st by inflation measured by the implicit price deflator capped at 2.5%.
  • The indexed increase could be suspended for one year by the Commissioner of DOLI if leading economic indicators indicate the possibility of a substantial downturn in the economy. The suspension could only be implemented after a public hearing and public comment period. In better economic times, the suspended inflationary increase or a lesser amount could be added back into the minimum wage rate in a subsequent year.

House and Senate DFL leaders said they expect to pass the bill this week.