Divided Minnesota Appeals Court Upholds MPLS $15 Minimum Wage

A divided Minnesota Court of Appeals just ruled that Minneapolis’ $15 minimum wage is not preempted by state law.  Graco, the employer challenging the ordinance, argued that Minnesota’s state minimum wage ($9.86 per hour for “large employers” and $8.04 per hour for “small employers”) occupied the field and preempted Minneapolis’ attempt to require employers to pay more (currently, no less than $11.25 per hour).

The majority of the Minnesota Court of Appeals disagreed, concluding that “the Ordinance is a valid exercise of the City of Minneapolis’s legislative power, and the district court did not err in declaring the Ordinance valid and enforceable.”

In his dissent, Judge Matthew E. Johnson argued that the Minneapolis ordinance should be preempted because it “forbids what the state statute expressly permits.”  That is, the Minneapolis ordinance prohibits employers from paying “hourly wages of between $9.86 and $11.24 for employees of large businesses and large employers.”

Bottom Line

Today’s decision means that employers with employees in Minneapolis must continue to comply with the ordinance’s minimum wage requirement: namely $11.25 for business with 100+ employees and $10.25 for employers with fewer than 100 employees.  Unless today’s decision is reversed by the Minnesota Supreme Court, on July 1, 2019, these rates will increase to $12.25 and $11.00 respectively.