In one of the most closely-watched issues of the session, DFL leaders appear to have found an agreement which will raise the state’s minimum wage. The particulars of the agreement still must undergo final committee work and votes in both bodies. The deal unveiled yesterday includes the following:
$9.50 minimum wage for businesses with gross sales over $500,000 in 2016 Phased in over three years from $7.25 currently to $8.00 in August 2014; $8.50 in August 2015; and $9.50 in August 2016.
$7.75 minimum wage for businesses under $500,000 in gross sales in 2016 Phased in over three years from $6.15 to $6.50 in August 2014; $7.25 in August 2015; and $7.75 in August 2016. (The wage cut off has been reduced from $625,000 to $500,000). .
The $7.75 minimum wage also applies to large businesses for: a 90 day training wage for 18 and 19 year olds; all 16 and 17 year olds; and employees working under a J1 visa.
Beginning in 2018, all wages would increase annually on January 1st through an inflation adjustment called the implicit price deflator. The implicit price deflator is similar to the Consumer Price Index. Wage growth will be capped at 2.5%.
The increase could be suspended for one year by the Commissioner of the Department of Labor and Industry (DOLI) if leading economic indicators show a possible substantial economic downturn. The suspension could only be implemented after a public hearing and comment period. In better economic times, the suspended increase could be added back.