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Minnesota's businesses prepare for minimum wage increase on Jan. 1

It will rise to $10 for large employers, and $8.15 for small.

Minnesota's large employers are preparing for an increase in the state's minimum wage, which will see it hit $10-an-hour for the first time in January.

The inflation-linked increase will see the minimum wage rise from $9.86-an-hour to $10 as of Jan. 1, for employers with annual sales of more than $500,000.

For small employers, the minimum wage will increase to $8.15-an-hour, from the $8.04 it is currently. The youth wage rate is also increasing to $8.15, as is the training wage.

For minimum wage workers at large businesses, the 14 cents increase will generate an extra $291 in gross pay over the course of a year, based on a 40-hour week. 

New for 2020, Minnesota companies now have to provide each employee with a written notice of any change to their employment terms and rate of pay.

Both the large and small employer minimum wages in Minnesota are considerably higher than the $7.25 federal rate, which was last increased in 2009.

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But Minnesota's state minimum wage is still lower than the city-based minimum wages being implemented by Minneapolis and St. Paul.

Minneapolis is increasing its minimum wage so it reaches $15-an-hour by July 2022 for large businesses, and July 2024 for small businesses. The minimum wage is currently $12.25 for large businesses and $11 for small.

In St. Paul, large businesses much reach $15-an-hour by July 2023, with small businesses following suit in 2025, and "micro businesses" of 5 employers or fewer following in July 2027.

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