On July 20, 2016, the Vote 15 Now MN group presented a petition for a proposed amendment to the Minneapolis City Charter which would incrementally increase minimum wage for work performed in Minneapolis starting August 1, 2017. By August 1, 2020, minimum wage for employers with 500 or more employees (nationwide) who work more than 25 hours per year in Minneapolis, would be paid no less than $15 per hour. For smaller employers, it would be stepped up slower, with a August 1, 2022 target date. Keep in mind, that Minnesota increases its state minimum wage for larger employers to $9.50 and small employers to $7.75 effective August 1, 2016, as I previously wrote about here.
To put this into perspective, a full-time (40 hour) worker would make a minimum wage of $31,200 – more than the current threshold for an exempt employee. The December 1, 2016 threshold for exempt employees ($47,476) is the equivalent of $22.83 per hour. Thus, Minneapolis employees who work 54 hours or more per week each week on average, would hit the new salary threshold of $47,476. Now, they would still have to meet the duties test, but I’m just saying…there may be some tension in those industries where an hourly employee who works a lot of hours could in fact be paid more than a “white collar” employee who is paid just above the threshold.
How Did It Get to This Point?
On June 29, 2016, Vote 15 Now MN submitted a citizen’s petition with (purportedly) 20,684 signatures of Minneapolis registered voters, to amend the City Charter on the November 8, 2016 ballot (the Presidential General Election). On July 14, the Charter Commission transmitted the petition to the City Council. On July 20, the City Clerk verified that the petition was sufficient and in compliance in its Audit Report. Notably, the City Clerk determined that of the supposed 20,684 signatures, only 40% – 8,418, were validated as being a registered voter with the correct address (the group needed 6,868 to be considered). The remaining 12,266 signatures were not found on the voter list, a blank line, missing or incorrect address, line crossed off, duplicate signature or a missing, incorrect, or illegible signature.
The Proposed Charter Amendment
The amendment proposes to amend Charter Article IV, City Council, § 4.1, Function, by adding paragraph (g), Minimum Wage. The meat of the amendment is thus:
“(A) Employers with 500 or more employees shall pay each employee expected to work 25 or more hours in a calendar year within the geographic boundaries of the City for each hour worked within the geographic boundaries of the City an hourly minimum wage of no less than:
(I) Starting August 1, 2017: $10.00,
(II) Starting August 1, 2018: $11.75,
(III) Starting August 1, 2019: $13.50,
(IV) Starting August 1, 2020: $15.00,
(V) Starting August 1, 2021, and each August 1 thereafter, the hourly minimum wage shall be adjusted to keep pace with the rising cost of living.
(B) Employers with fewer than 500 employees shall pay each employee expected to work 25 or more hours in a calendar year within the geographic boundaries of the City for each hour worked within the geographic boundaries of the City an hourly minimum wage of no less than:
(I) Starting August 1, 2017: $10.00,
(II) Starting August 1, 2018: $11.00,
(III) Starting August 1, 2019: $12.00,
(IV) Starting August 1, 2020: $13.00,
(V) Starting August 1, 2021, $14.00,
(VI) Starting August 1, 2022: $15.00,
(VII) Starting August 1, 2023, and each August 1 thereafter, the hourly minimum wage will not be less than the minimum wage set by subsection (2)(A)(V) of this section 4.1(g).”
To determine employer size, the number of employees includes all employees (full or part-time) that work for the employer anywhere in the United States. If an employer is a franchisee (typically fast-food), all employees employed by other franchisees of the same franchisor are included.
An employer would not be allowed to apply gratuities towards this minimum wage. And if an employer fails to pay the minimum wage? The employee will have a private right of action to bring a lawsuit in court, and may recover back wages plus two times (2x) the backwages amount as damages, as well as attorneys’ fees, costs and interests, as well as an administrative penalty and other legal and equitable relief.
The City Council must determine the language for the November 8 ballot question, but has deferred this to the City Attorney to draft with a deadline of today, July 28, 2016. If the City Attorney determines it is proper for placement on the ballot, the Committee of the Whole will then review and recommend the final action on August 3, 2016 for the City Council vote on August 5. If passed (which I wholly expect it to) and put on the ballot in November, then at least 51% of voters must vote in favor of the amendment. If adopted, the amendment takes effect 30 days after the election, which means the first wage increase will be August 1, 2017.