St. Paul announces $15 minimum wage plans – but it'll take a while to arrive

It'll follow Minneapolis in passing a $15 wage ordinance.
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St. Paul is following Minneapolis in pushing ahead for plans for a $15 minimum hourly wage – but it'll take a while for every worker to benefit.

Mayor Melvin Carter and council member Andrew Tolbert announced the new ordinance that will go before the council next week.

It sets out a plan to phase in the $15 minimum wage starting 2020 and ending in 2027. The plans don't include an exemption for tipped workers, who must be paid the minimum wage in addition to any tips they receive.

How quickly the $15 arrives will depend on the size of the business, here's how it breaks down:

Large businesses (100+ employees) start phasing in the wage in 2020, reaching $15 by July 1, 2023 and indexed to inflation every year after that.

Small businesses (5-100 employees) start in 2020 to phase it in, and must reach $15 by July 1, 2025, and indexed to inflation after that.

Micro businesses (5 or fewer employees) start in 2020 as well, but have until July 1, 2027 to reach the $15 mark, with the wage again indexed to inflation thereafter.

The St. Paul system offers additional flexibility for the smallest businesses than Minneapolis, which doesn't differentiate between "small" and "micro" businesses in its already-implemented $15 wage plan.

Minneapolis large businesses will reach $15 an hour by July 1, 2022, while small businesses will follow suit two years later.

Carter says the ordinance will result in 56,000 St. Paul workers getting a pay rise, with council members backing the ordinance saying it will help close the poverty gap in Minnesota's state capital.

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Here are some other features of the proposals.

– It will NOT include a "tip credit" for tipped workers. So restaurants cannot use a server's tips towards their overall wages.

– City-approved youth training and apprentice programs must pay a wage no less than 85 percent of the small business minimum wage.

– Workers aged 14-17 must be paid no less than 85 percent of the small business rate for their first 90 days, and the full rate after that.

– There's an exemption for the Saint Paul Saints, which said a minimum wage could severely harm its operations. It will be allowed to compensate its players based on a negotiated contract.

– Employees covered by collective bargaining agreements may waive the minimum wage in their agreement.

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