How Minnesota’s Minimum-Wage Increase Affects Business Owners
A state law dictating new minimum-wage requirements—and increases—for Minnesotans was passed in May of this year and will become effective August 1. So what does this mean for Minnesota business owners?
Requirements in effect as of August 1, 2014:
- Large employers (annual gross sales of $500,000 or more) must pay employees at least $8 an hour.
- Small employers (annual gross sales of less than $500,000) must pay employees at least $6.50 an hour.
- Training wage rate (90-day training rate paid to employees who are younger than 20 years of age) is $6.50 an hour.
- Youth wage rate (paid to employees younger than 18 years of age) is at least $6.50 an hour.
- These rates will increase over the next two years. Click here for a schedule of rate increases.
Other state minimum-wage laws:
- Minimum-wage rates apply to all hours worked, whether part-time or full-time.
- Employees must be paid at least the minimum-wage rate, no matter how they are paid.
- No employer may take a tip credit against wages in Minnesota.
- Workers exempt from minimum-wage requirements include bona fide executive, administrative or professional workers; babysitters; and volunteers of nonprofit organizations.
Don’t forget about federal minimum-wage laws:
The federal minimum wage to be paid by covered employers is $7.25 an hour. Covered employers include the following:
- Businesses that produce or handle goods for interstate commerce
- Businesses with an annual dollar volume of business of $500,000 or more
- Certain other businesses such as hospitals and nursing homes, private and public schools, and federal, state and local government agencies
With the complexities of the wage laws more employers have decided to outsource their payroll processing. Abdo, Eick & Meyers, LLP, has a full-service payroll department to assist our clients with payroll processing. We provide a complete, customized solution for your payroll needs. Give us a call today to find out how we can help you.
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