Minn DFL leaders reach deal to hike minimum wage to $9.50 an hour

By KBJR News 1

April 7, 2014 Updated Apr 7, 2014 at 6:50 PM CDT

St. Paul, MN (NNCNOW.com) - Minnesota House & Senate DFL leaders announced a deal Monday morning to raise the state's minimum wage, affecting 357,000 people.

The deal calls raise the minimum wage to $9.50 an hour for large employers over the next three years.

The agreement also calls to index the minimum wage to inflation.

The index to inflation provision also includes an option for the commissioner of labor and industry to stop a one-time inflationary wage increase in certain economic circumstances.

Talks over an increase stalled during conference committees in March, due to concerns over the wage hike happening too fast and index to inflation, according to Senate DFL leaders.

Low wage workers employed by small businesses would see a wage hike to $7.75 by 2016.

The House and Senate are expected to take up the bill on their respective floors this week. DFL leaders say they hope to have the bill signed into law by Governor Mark Dayton this week.

The bill does not include a tip credit. Sen. Tom Bakk (DFL-Cook) said it did not have enough votes in his caucus.

Sen. Dave Thompson (R-Lakeville) said he's concerned about the wage hike.

"Indexing is a really bad idea," he said.

He said the provision puts it at the whim of the Executive Branch, which "already has too much power," Sen. Thompson said.

Sen. Thompson also said he isn't buying there wasn't a connection between the minimum wage hike deal and last week's Senate office building vote. DFL leaders denied such a link.

Details of the agreement include:
· $9.50 minimum wage for businesses with gross sales over $500,000 in 2016. $8.00 in August 2014, $8.50 in August 2015.
· $7.75 minimum wage for businesses under $500,000 in gross sales in 2016. $6.50 in August 2014, $7.25 in August 2015.
· The $7.75 minimum wage rate would also apply for large businesses in the following circumstances: 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 each year on January 1st by inflation measured by the implicit price deflator capped at 2.5%.
· The indexed increase could be suspended for one year by the Commissioner of DOLI if leading economic indicators indicate the possibility of a substantial downturn in the economy. The suspension could only be implemented after a public hearing and public comment period. In better economic times, the suspended inflationary increase or a lesser amount could be added back into the minimum wage rate in a subsequent year.

Kevin Jacobsen
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