Minnesota Minimum Wage 2026

Managing various business responsibilities can often feel overwhelming, particularly as laws and regulations evolve. For small businesses in Minnesota, keeping up with these changes is essential to ensuring compliance and avoiding potential legal issues. One of the most critical monitoring aspects is the Minnesota minimum wage requirements, which can directly impact your payroll and overall business operations.

Understanding these wage laws helps you stay compliant and supports fair compensation practices for your employees. To stay informed and up-to-date, we’ve prepared an in-depth guide on minimum wage laws in Minnesota for 2026. This guide provides the necessary insights and details to steer your business confidently.

What Is the Minimum Wage in Minnesota?

In 2026, the minimum wage in Minnesota will be $10.85 per hour for large employers (with annual revenue of $500,000 or more) and $8.85 per hour for small employers (with annual revenue of less than $500,000). This is the lowest hourly pay employers must give their employees by law.

The minimum wage in Minnesota is reviewed and adjusted regularly to reflect changes in inflation and economic conditions, ensuring workers are paid fairly. For the most current and precise information on minimum wage rates in Minnesota, check official government websites or labor departments, which offer detailed information on the state’s minimum wage laws.

Variations in Minimum Wage Across Minnesota

As of 2026, Minnesota exhibits variations in minimum wage standards, particularly in its counties of Hennepin and Ramsey, which encompass the cities of Saint Paul and  Minneapolis, respectively. The minimum wage in Minneapolis, located in Hennepin County, depends on the employer’s size. Businesses with over 100 employees must pay a minimum wage of $15.57 per hour starting January 1, 2026. Those with 100 or fewer employees are slated to meet this wage requirement by July 1, 2026.

The wage structure in Saint Paul, Ramsey County, is more diversified across different business sizes. Beginning in 2026, companies with more than 10,000 employees and city employees are mandated to pay at least $15.57 per hour. This rate also applies to businesses employing between 101 and 10,000 individuals.

Smaller businesses, those with 6 to 100 employees, must adhere to a $14.00 per hour minimum wage, while the smallest category, micro-businesses with five or fewer employees, are obligated to pay $12.25 per hour. These rates set by Saint Paul and Minneapolis significantly exceed the state-mandated minimum wages of $10.85 per hour for larger employers and $8.85 for smaller employers.

Historical Overview of Minimum Wage Rates in Minnesota

Over the years, Minnesota has adjusted its minimum wage to reflect changes in economic conditions and the cost of living. The state set its first minimum wage at $0.25 per hour in 1937 amid the Great Depression as part of a broader national initiative to increase wages and improve workers’ living standards. This rate stayed the same until 1945.

In 1955, the minimum wage rose to $0.75, and by 1961, it had reached $1 per hour in response to the state’s economic growth and inflation patterns. In 1967, Minnesota pioneered the indexing of its minimum wage to the cost of living, which allowed for automatic annual adjustments based on inflation, giving workers a steadier income. By 1973, the state introduced a tiered wage system that distinguished minors, apprentices, and other employees.

Starting in 2005, Minnesota initiated a series of gradual increases from $5.15 to $6.15 per hour. More significant changes occurred in 2014 when the state passed legislation for staged increases to reach $9.50 by 2016, with future raises linked to inflation. By 2022, the minimum wage had risen to $10.08, and in 2023, Saint Paul and Minneapolis began implementing city-specific minimum wages that exceeded the state’s rate.

Here’s a summary of the recent minimum wage rates in Minnesota:

Year	Minimum Wage Rate
2018	$9.65 per hour
2019	$9.86 per hour
2020	$10.00 per hour
2021	$10.08 per hour
2022	$10.33 per hour
2023	$10.59 per hour
2026	$10.85 per hour

What Is the Tipped Minimum Wage in Minnesota?

In Minnesota, the regulations for tipped employees are straightforward and aim to safeguard workers. Employers are prohibited from counting tips towards fulfilling the minimum wage obligations. Employees must receive the minimum wage ($10.85 or $8.85 per hour, based on the employer’s size) and any tips they collect.

Tips belong entirely to the employee. Employers cannot demand that tips be shared with the company or among employees. However, tip pooling among staff during a shift or specific events like banquets is allowed, provided all participating employees consent. For tips processed via credit card, employers can subtract the exact fee the credit card company charges for processing but nothing more.

Understanding the Overtime Minimum Wage Laws in Minnesota

In Minnesota, state laws require that employers compensate employees at one and a half times their usual hourly rate for any hours worked over 48 hours a week. This regulation aims to ensure fair pay for employees who work long hours. Additionally, according to the Fair Labor Standards Act (FLSA), many Minnesota businesses must follow federal overtime laws, which require overtime pay for more than 40 hours worked in a week.

Employers must accurately record working time and calculate overtime to comply with these rules. Failure to do so can lead to legal consequences, emphasizing employers’ importance in adhering to state and federal guidelines.

These overtime rules are established to help regulate work hours and promote a healthy balance between work and personal life, ensuring that employees receive appropriate compensation for extra work.

Minnesota Minimum Wage Exceptions

While most Minnesota employees benefit from minimum wage laws, there are specific exceptions. Employers must understand these exceptions to adhere to the law correctly. Here are key groups of employees exempt from the standard minimum wage:

• Exempt Employees: Certain employees are not subject to minimum wage and overtime requirements. This group includes executive, administrative, and professional employees and outside salespersons. To be exempt, employees must meet specific duties tests and receive a salary.
• Youth Workers: Employees under 18 may receive a youth wage of $8.85 per hour, below the standard minimum wage.
• Trainees: Employees under 20 can earn a training wage of $8.85 per hour during their first 90 days.
• Employees with Disabilities: Employers can pay a reduced wage to workers with disabilities if they secure a special permit from the Minnesota Department of Labor and Industry. This wage may be as low as 50% of the standard minimum wage, and no more than 10% of a company’s workforce can receive this lower wage without additional approval.
• Specific Occupations: Certain workers are also not covered by minimum wage laws. Exempt occupations include babysitters, taxicab drivers, nonprofit organization volunteers, and agricultural workers. Additionally, employees regulated by the U.S. Department of Transportation, such as truck drivers, are exempt.

How to Comply with Minnesota Wage Laws?

Complying with Minnesota wage laws is essential to avoid legal issues and support a fair and equitable workplace for employees. Here are some practical strategies for employers to adhere to Minnesota’s wage law requirements:

• Update Policies Regularly: Ensure your company’s wage policies are up-to-date with state and federal laws. Ensure employees are aware of these policies and can access them anytime.
• Stay Informed: Follow changes to Minnesota’s minimum wage rates, exemptions, and other relevant laws.
• Accurate Record Keeping: Keep detailed records of hours worked, wages paid, and deductions. Make sure these records are available for audits or inquiries.
• Display Required Posters: Place the official Minnesota minimum wage poster where all employees can easily see it to inform them of their wage rights.
• Train Managers and Supervisors: Educate your managerial staff on wage laws and their application to their teams. Their understanding is crucial for ensuring workplace compliance.
• Monitor Overtime: Consistently track employee hours to ensure that overtime is calculated correctly and paid when due.
• Communicate About Wage Issues: Maintain open communication about wage-related matters. Promptly address and resolve any employee concerns or complaints to prevent disputes.
• Review Payroll Practices: Examine your payroll processes to confirm that all employees are paid according to state laws, including minimum wage and overtime requirements.
• Consult Employment Law Experts: When needed, seek advice from specialists in employment law to confirm that your practices meet current regulations.

Conclusion

Staying updated with Minnesota’s minimum wage laws is crucial for small business owners. As the minimum wage continues to evolve, both at the state and city levels, businesses must adapt to ensure compliance and fair treatment of employees. In 2026, Minnesota’s statewide minimum wage is set to increase, with notable variations in Saint Paul and Minneapolis that necessitate careful attention. By understanding these regulations, including tipped wage standards, overtime laws, and specific exemptions, businesses can avoid legal pitfalls and support a fair working environment.

Regularly reviewing and updating wage policies, maintaining accurate records, and educating management will help ensure compliance and foster a positive workplace. Consulting official sources and legal experts remains essential for precise and current information. Staying proactive helps businesses meet legal obligations and contributes to a more equitable and transparent employment practice.

Frequently Asked Questions