New year, new minimum-wage rate as of Jan. 1, 2021

Minnesota's minimum-wage rates will be adjusted for inflation beginning Jan. 1, 2021, to $10.08 an hour for large employers and $8.21 an hour for other state minimum wages.

As of Jan. 1, 2021:

• Large employers must pay at least $10.08 an hour when the employer's annual gross revenues are $500,000 or more.

• Small employers must pay at least $8.21 an hour when the employer's annual gross revenues are less than $500,000.

• The training wage rate, $8.21 an hour, may be paid to employees younger than 20 years of age for the first 90 consecutive days of employment.

• The youth wage rate, $8.21 an hour, may be paid to employees younger than 18 years of age.

• These state minimum-wage rates will not apply to work performed in the cities of Minneapolis and St. Paul, which have higher minimum-wage rates.

In the balance of the state, for February 2020, an estimated 206,000 jobs, or 8.5% of the total, paid the minimum wage or less. February 2020 was the last month before the COVID-19 pandemic had a significant effect on the economy.

Employee notice updates may be required

As part of Minnesota's employee notice requirement, employers are required to provide each employee with a written notice of any change, before the change takes effect, including a change to the employee's rate of pay. Learn more about the employee notice requirement at www.dli.mn.gov/business/employment-practices/employee-notice.

Required poster updated, available

Minnesota law requires employers to display some state-mandated posters in a location where employees can easily see them. The posters are available at no cost and need to be updated only when Minnesota law changes. An updated minimum-wage rate poster, as well as other workplace posters, can be found at www.dli.mn.gov/about-department/workplace-posters. More information about Minnesota's minimum-wage rates is available at www.dli.mn.gov/business/employment-practices/minimum-wage-minnesota.

2020 Minnesota minimum wage report released

The Minnesota Department of Labor and Industry has released its 2020 Minnesota minimum-wage report.

Key findings

• Actual minimum wages for Minnesota, Minneapolis and St. Paul:  The Minnesota minimum wage, $10 an hour for large employers in 2020, is adjusted annually for inflation. The minimum wages for employers of different sizes in Minneapolis and St. Paul will reach $15 in various years from 2022 to 2027 and will be adjusted for inflation thereafter.

• Actual annual earnings at the minimum wage:  For workers earning the Minnesota minimum hourly wage and working 40 hours a week, annual wages in 2020 are $20,800 for workers at large employers and $16,952 for workers at small employers. Workers in Minneapolis earn annual full-time wages of $26,520 at large employers and $23,660 at small employers, while St. Paul workers earn $22,360 at large employers and $20,800 at small employers.

• Inflation-adjusted minimum wages:  Adjusting for inflation, the 2020 Minnesota large-employer minimum wage of $10 an hour is below the average level of the federal minimum wage for 1960 through 1980, $10.54. When the Minneapolis and St. Paul minimum wages have reached $15, they will be higher, adjusting for inflation, than the $12.24 peak reached by the federal minimum in 1968.

View the full report [no longer available].