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New year, new minimum-wage rates as of Jan. 1

Large employers must pay at least $10.33 an hour when the employer's annual gross revenues are $500,000 or more.

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Minnesota's minimum-wage rates will be adjusted for inflation beginning Jan. 1, 2022, to $10.33 an hour for large employers and $8.42 an hour for other state minimum wages.
As of Jan. 1, 2021:

  • Large employers must pay at least $10.33 an hour when the employer's annual gross revenues are $500,000 or more.
  • Small employers must pay at least $8.42 an hour when the employer's annual gross revenues are less than $500,000.
  • The training wage rate, $8.42 an hour, may be paid to employees younger than 20 years of age for the first 90 consecutive days of employment.
  • The youth wage rate, $8.42 an hour, may be paid to employees younger than 18 years of age.

These state minimum-wage rates will not apply to work performed in the cities of Minneapolis and St. Paul, which have higher minimum-wage rates.
The Minnesota Department of Labor and Industry has also released its 2021 Minnesota minimum-wage report.

Key findings

  • Actual minimum wages for Minnesota, Minneapolis and St. Paul: The Minnesota minimum wage, $10.08 an hour for large employers in 2021, is adjusted annually for inflation. The minimum wages for employers of different sizes in Minneapolis and St. Paul will reach $15.00 in various years from 2022 to 2027 and will be adjusted for inflation thereafter.

  • Actual annual earnings at the minimum wage: For workers earning the Minnesota minimum hourly wage and working 40 hours a week, annual wages in 2021 are $20,966 for workers at large employers and $17,077 for workers at small employers. As of July 1, 2021, workers in Minneapolis earn annual full-time wages of $29,640 at large employers and $26,000 at small employers, while St. Paul workers earn $26,000 at large employers and $22,880 at small employers.

  • Inflation-adjusted minimum wages: Adjusting for inflation, the 2021 Minnesota large-employer minimum wage of $10.08 an hour is somewhat below the average rate of the federal minimum wage for 1960 through 1980, which was $10.66. When the Minneapolis and St. Paul minimum wages reach $15.00, they will be higher, adjusting for inflation, than the $12.37 peak reached by the federal minimum wage in 1968.

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