The minimum wage in Minneapolis will be raised to $10.25 an hour for small businesses and $11.25 for large businesses starting July 1. It’s the second stage of a plan to move the bar up to $15 across the city by 2024.
 
At the start of the year, large companies made the first step toward the $15 minimum by implementing a $10 minimum wage.
 
The city ordinance defines “small” businesses as those with 100 or fewer employees, while those with a workforce of more than 100 are considered “large”. Prior to the introduction of the new city policy, minimum wage for small businesses was set by state law in 2014 at $7.75 and $9.65 for large businesses (with subsequent increases to match inflation).
 
Minneapolis’ new ordinance also notes tips and gratuities do not count toward the wage minimum, a clarification that is especially pertinent to the hospitality sector. There was pushback on this aspect from restaurant owners, who for the sake of their bottom line, felt they shouldn’t’ have to pay each server $15, since they make up for lower wages with tips.
 
There was debate about what servers actually make, which elevated the discourse in City Hall discussions prior to the ordinance being passed. Ultimately, the council moved forward with the no-exemption $15 plan and officially approved last year.
 
The wage hike aims to benefit tens of thousands of families, as inequality climbs nationally and more than 84,000 people in Minneapolis earn incomes below the federal poverty level, according to the city.
 
Minorities in particular have faced low minimum wages: 41 percent of black employees in the city and 54 percent of Latino workers, compared to just 17 percent of white workers, earn less than $15 per hour to date.
 
The wage hike ordinance is part of an overarching effort to promote economic inclusion and reduce economic and racial disparities in Minneapolis. It also makes the city one of several across the country to enact a $15 minimum wage plan to address poverty issues as a response to perceived inactivity at the federal and state levels.
 
The next stage of Minneapolis’ “Pathway to $15” will come July 2019, with each yearly increase from now on being 75 cents for small businesses and $1 for large businesses. Large companies will therefore reach the target by 2022, while small companies are due to hit it by 2024.
 
The City’s Department of Civil Rights is overseeing enforcement of the increase, including fielding reports of any companies violating the ordinance.