City Council passes municipal minimum wage ordinance

Large employers have until 2022 to reach $15 an hour; small businesses until 2024

The City Council approved a municipal minimum wage ordinance today that requires large employers to pay Minneapolis workers $15 an hour in five years and gives small employers seven years to reach the target wage.

There will be a tiered phase-in period for small and large businesses. Large businesses are defined as having more than 100 employees and small businesses as 100 or fewer workers.

Date Large business: five years Small business: seven years
Jan. 1, 2018 $10 No increase
July 1, 2018 $11.25 $10.25
July 1, 2019 $12.25 $11
July 1, 2020 $13.25 $11.75
July 1, 2021 $14.25 $12.50
July 1, 2022 $15 $13.50
2023 Jan. 1: $15 indexed to inflation July 1: $14.50
July 1, 2024 $15 indexed to inflation $15 indexed to inflation

To be consistent with State law, the minimum wage policy will apply to anyone who works in Minneapolis for any amount of time. The minimum wage will be indexed to inflation after the target $15 an hour wage is reached. The ordinance does not include an exception for tipped workers in the hospitality industry—all workers will be subject to the minimum wage, regardless of tips, consistent with the state policy.

The City’s Department of Civil Rights will oversee enforcement of the municipal minimum wage. The ordinance also includes a private cause of action allowing an employee or employees to bring a civil action in district court for violations of the ordinance.

The City Council also passed a measure directing staff to analyze how youth job training programs should be accounted for in the ordinance and report back to the Committee of the Whole by September 2017.

Additionally, the Council directed staff to prepare a request for proposals for an external Minneapolis minimum wage study and present initial funding plans to the Committee of the Whole on July 19, 2017. Another measure calls on staff to prepare recommendations for creating a matching grant program to help qualifying restaurants and small businesses pay the cost of sewer access charges and Americans with Disability Act facility improvements. A report is due to the Council’s Community Development & Regulatory Services Committee by July 31, 2017.

Staff have also been called on to study the challenges and application of municipal minimum wage to non-hospitalized, residential health care enterprise workers and report back to the Committee of the Whole on Aug. 2, 2017.

The passage of the municipal minimum wage ordinance comes as many Minneapolis workers struggle to pay for basic needs. Inaction by federal and state governments has prompted more cities throughout the country to establish minimum wage policies.

There are more than 84,000 people in Minneapolis with incomes below the federal poverty level. An increase in the minimum wage to $15 an hour would benefit 23 percent of workers in Minneapolis (about 71,000) people. Low-wage workers of color will disproportionately benefit from the wage increase.

Increasing the minimum wage is one of the primary tools the City has to reduce economic and racial disparities—one of the most pressing issues facing Minneapolis. “The public welfare, health and prosperity of Minneapolis requires wages sufficient to ensure a decent and healthy life for all Minneapolis workers and their families,” the ordinance states.

“Today is not an end, it is a beginning: the beginning of better lives for the 71,000 people, importantly including tipped workers, whose wages will be raised by this historic action, lifting many of them out of poverty,” said Mayor Betsy Hodges. “It marks a new day and a new opportunity, and I celebrate it. I especially acknowledge and thank the workers, and the advocates and labor unions who stand with them, who worked hard for years to make this historic day possible.

“While we celebrate today, we must also acknowledge that 30,000 Minneapolis residents who work at low-wage jobs outside our city are not covered by the action we have taken today. They are our neighbors, our community, our friends. We do not have the tools at the City to raise their wages, too; in our celebration, we cannot forget them. That is why today is another beginning of a push to raise the minimum wage regionally, for their benefit and the benefit of all businesses and low-wage workers in our region,” Mayor Hodges concluded.

“The City Council has gone through a very thorough and thoughtful process in crafting this municipal minimum wage ordinance,” said City Council President Barbara Johnson. “It will lift wages for thousands of workers in Minneapolis. It also acknowledges the challenges facing small businesses by giving them more time to prepare for the wage increases.”

“Today the City Council took a big step forward in making life better for working people in the city of Minneapolis,” said City Council Vice President Elizabeth Glidden. “The City has taken the lead on tackling an important issue that has faced inaction at the state and federal levels. We have far too many people in Minneapolis who struggle to pay for basic needs. Moving forward with a municipal wage is a concrete way we can address the significant economic and racial disparities in our city.”

For more information on the City’s minimum wage ordinance, visit the City’s website: minneapolismn.gov/minimumwage.