After surviving its first legal challenge, Minneapolis’ $15 Minimum Wage Ordinance is set to begin its first increase on January 1, 2018.
In addition, unlike Minneapolis’ Sick Leave Ordinance, employers who are not physically located in the City must take notice because they will have to make sure that most of their employees working in Minneapolis receive the benefit of the new ordinance.
Minneapolis’ $15 Minimum Wage Ordinance
As we reported in Minneapolis Passes Phased-In $15.00 Minimum Wage, the City of Minneapolis is prepared to implement a $15 minimum wage requirement on January 1, 2018, according to the following schedule:
| Date | Large Businesses (100+) | Small Businesses (<100) |
| 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 |
| July 1, 2023 | $15 indexed to inflation | $14.50 |
| July 1, 2024 | $15 indexed to inflation | $15 |
Ordinance Applies if Employee Works in MPLS for 2 Hours in a Week
The Minimum Wage Ordinance applies to all time worked by an employee, of at least two hours per week, within the geographic boundaries of Minneapolis. Thus, for example, if an employee works 5 hours in the City, then the employer must pay the required minimum wage for all of those hours. If the same employee works only 1 hour in the City during the next week, then the employer is not required to pay the City-mandated minimum wage for that time.
Similar to its challenge of Minneapolis’ Sick Leave Ordinance, the Minnesota Chamber of Commerce brought a lawsuit challenging the City’s authority to issue the Ordinance and the City’s ability to enforce its ordinance on employers who do not have a physical presence in the city. Last week, Hennepin County Judge Susan N. Burke rejected both challenges.
Judge Burke’s Rationale
First, Judge Burke ruled that the Minimum Wage Ordinance does not conflict with existing state law because the Minnesota Fair Labor Standards Act (“MFLSA”) merely “sets a floor, but not a ceiling for minimum wages in the State. . . .” She further explained that to the extent that different record keeping requirements might apply between the MFLSA and the minimum wage ordinance, those requirements are not irreconcilable and that “[e]mployers are capable of complying with both laws.”
Second, Judge Burke concluded that City was not precluded from enforcing its ordinance against employers who did not have a physical location in the city because the Ordinance applied only to hours worked within the City. She wrote:
The Ordinance focuses on preventing harms occurring within the City of Minneapolis. The purpose of the Ordinance is to address sub-standard living conditions and poverty existing within the Minneapolis city limits; to address racial and income disparities existing among Minneapolis workers, and to ensure a livable wage for people working in the City of Minneapolis. The Ordinance only applies to work actually performed within the city limits of Minneapolis. It is unlikely Plaintiffs will be able to show that the Ordinance has an impermissible extraterritorial reach.
Bottom Line
Given this decision, all employers (regardless of location) will be subject to Minneapolis $15 Minimum Wage Ordinance. This means that “large employers” (i.e., those with 100+ employees) will need to begin paying employees $10 per hour for all hours worked within the City (excluding commute time), provided that the employee works at least 2 hours in the City during that workweek. Other employers will need to begin increasing their wages beginning on July 1, 2018, unless or until the decision is reversed by the Court of Appeals.