It's official, Minneapolis is getting a $15 minimum wage

The ordinance passed by a vote of 11-1.

It's official, Minneapolis will have a $15-an-hour minimum wage.

The Minneapolis City Council passed the proposed ordinance, which sets out a path for the city's minimum wage to rise incrementally to $15 by 2022, by a vote of 11-1 on Friday morning.

The decision was met by cheers from advocates of the $15 wage who attended the meeting, among them Minneapolis Neighborhoods Organizing for Change.

Currently, Minneapolis adheres to the Minnesota state minimum wage of $9.50 an hour.

Mayor Betsy Hodges said the change would benefit 71,000 workers living near or below the poverty line, many of them minority workers in a city where there is a huge racial disparity when it comes to household income.

The only person who voted against the ordinance was council member Blong Yang, who according to the Star Tribune said he had concerns about how it would impact small business owners and entrepreneurs of color in his north Minneapolis ward.

The movement for $15 overcame a challenge by Republicans at state level who tried to stop cities from setting their own minimum wages via the so-called "pre-emption bill," which Gov. Mark Dayton vetoed.

It makes Minneapolis the latest city nationally – and the first in the Midwest – to adopt a $15 minimum wage, joining others like Seattle and San Francisco.

How will it work?

Large businesses – defined as those having more than 100 employees – will have to increase minimum wages over four years starting Jan. 1. Here's how it will roll out:

  • Jan. 1, 2018: $10 an hour.
  • July 1, 2018: $11.25.
  • July 1, 2019: $12.25.
  • July 1, 2020: $13.25.
  • July 1, 2021: $14.25.
  • July 1, 2022: $15 an hour.

Small businesses – with fewer than 100 workers.

  • July 1, 2018: $10.25 an hour.
  • July 1, 2019: $11.00
  • July 1, 2020: $11.75
  • July 1, 2021: $12.50
  • July 1, 2022: $13.50
  • July 1, 2023: $14.50
  • July 1, 2024: $15 an hour.

After the minimum wage reaches $15 an hour, it will be indexed to inflation.

Change to help restaurant groups

The city's ordinance will not allow restaurant businesses to count servers' tips towards their hourly wage, the so-called "tip credit" that a coalition of more than 100 restaurants asked the city to include.

As a result, restaurants will have to increase servers' basic pay to $15 an hour, with some suggesting they may have to raise menu prices or add service charges/scrap tipping to cope with the extra cost.

The coalition "Pathway to $15" had asked the city to allow tips go towards wages, and if they still fell below the $15-an-hour mark, they would make up the difference.

However, an amendment that was included in the final ordinance states that restaurant groups with several eateries in Minneapolis (but not fast food chains) can classify each restaurant as a small business if they employ fewer than 100 people, rather than being considered a large business with more than 100.

The amendment, put forward by council member Jacob Frey, will give individual restaurants more time to prepare for the $15-an-hour minimum wage.

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