The City of St. Paul has now joined Minneapolis in (eventually) raising its minimum wage to $15. The first wage increase will go into effect on January 1, 2020, and the wage will be increased at different rates depending on the size of the business.
New $15 Wage to Be Phased In
St. Paul’s $15 minimum wage will be phased in over 2 years for businesses with 10,000 or more employees, over 4 years for businesses with 100 to 9,999 employees, 5 years for businesses 6 to 99 employees, and 7 years for businesses with 5 or fewer workers.
After reaching $15 per hour, the City will require an annual increase to the minimum wage based on the statewide adjustment, which is announced by Minnesota DOLI in September and then goes into effect on January 1 of the following year.
Here is how the complicated phase-in will work:
(100 to 9,999)
(6 to 99)
(1 to 5)
|Jan. 1, 2020||$12.50||No increase||No increase||No increase|
|July 1, 2020||No increase||$11.50||$10.00||$9.25|
|July 1, 2021||No increase||$12.50||$11.00||$10.00|
|July 1, 2022||$15.00||$13.50||$12.00||$10.75|
|Jan. 1, 2023||$15.00 + ½ state law increase||No increase||No increase||No increase|
|July 1, 2023||No increase||$15.00||$13.00||$11.50|
|Jan. 1, 2024||$15.00 + state law increase||No increase||No increase||No increase|
|July 1, 2024||No increase||Same as “Macro Business”||$14.00||$12.25|
|Jan. 1, 2025||$15.00 + state law increase||No increase||No increase|
|July 1, 2025||No increase||$15.00||$13.25|
|Jan. 1, 2026||$15.00 + state law increase||No increase||No increase|
|July 1, 2026||No increase||Same as “Macro Business”||$14.25|
|Jan. 1, 2027||$15.00 + state law increase||No increase|
|July 1, 2027||No increase||$15.00|
|Jan. 1, 2028||$15.00 + state law increase||No increase|
|July 1, 2028||$15.00 + state law increase||Same as “Macro Business”|
Determining Business Size
The St. Paul ordinance calculates an employer’s business size based on the “average number [of] employees per week during the previous calendar year.” This calculation includes all employees who work for the employee (full-time, part-time, joint, or temporary employees), regardless of whether they perform work in the city. A franchisee is required to count all employees working at all franchises owned and operated by the same franchisee.
Thus, for example, an employer will be covered by the ordinance even if it has 1 employee working in St. Paul and 150 employees working in Golden Valley. The employer would be considered a “Large Business” (100 to 999 employees) and would need to increase the St. Paul employee’s wages to $11.50 by July 1, 2021.
There are special rules for new businesses and restaurants with 10 or fewer locations.
Ordinance Applies Regardless of Employer’s Location
The St. Paul ordinance applies to any work that is performed within the geographic boundaries of the City. Non-St.-Paul-based employees are entitled to the $15 wage only if they perform at least 2 hours of work for the employer in any particular week.
For example, an employer who sends a technician to repair a machine in a factory located in St. Paul would need to pay its employee at least the St. Paul minimum wage if that employee worked 2 or more hours within the city of St. Paul.
The St. Paul ordinance does not include an exception for tipped workers in the hospitality industry. Therefore, all workers in St. Paul will be subject to the $15 minimum wage.
St. Paul’s Department of Civil Rights will oversee enforcement of this new requirement. While the ordinance does not expressly contain a private cause of action for failure to pay minimum wages, it does provide a cause of action for “retaliation” based on rights set forth in the ordinance. One of those rights is “the right to earn minimum wage,” so it’s possible that an attorney could bring a private lawsuit in state district court based on an employee’s failure to earn the minimum wage. Attorneys’ fees are available for successful claimants.
Minimum wage is coming to St. Paul. While the legal challenge to the Minneapolis minimum wage ordinance is still winding its way through the courts, it is unlikely that the court or Governor-elect Walz will undue municipal attempts to regulate employment law. Thus, St. Paul employers and employers with employees working in St. Paul should begin gearing up for a very different employment environment within the city limits.