HF 1027

2nd Engrossment - 89th Legislature (2015 - 2016) Posted on 03/23/2015 11:43pm

A bill for an act
relating to employment; modifying the minimum wage for certain employees
receiving gratuities; amending Minnesota Statutes 2014, section 177.24,
subdivision 1, by adding a subdivision; repealing Minnesota Statutes 2014,
section 177.24, subdivision 2.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2014, section 177.24, subdivision 1, is amended to read:

Subdivision 1.

Amount.

(a) For purposes of this subdivision, the terms defined in
this paragraph have the meanings given them.

(1) "Large employer" means an enterprise whose annual gross volume of sales
made or business done is not less than $500,000 (exclusive of excise taxes at the retail
level that are separately stated) and covered by the Minnesota Fair Labor Standards Act,
sections 177.21 to 177.35.

(2) "Small employer" means an enterprise whose annual gross volume of sales made
or business done is less than $500,000 (exclusive of excise taxes at the retail level that
are separately stated) and covered by the Minnesota Fair Labor Standards Act, sections
177.21 to 177.35.

(b) Except as otherwise provided in sections 177.21 to 177.35:

(1) every large employer must pay each employee wages at a rate of at least:

(i) $8.00 per hour beginning August 1, 2014;

(ii) $9.00 per hour beginning August 1, 2015;

(iii) $9.50 per hour beginning August 1, 2016; and

(iv) the rate established under paragraph (f) beginning January 1, 2018; and

(2) every small employer must pay each employee at a rate of at least:

(i) $6.50 per hour beginning August 1, 2014;

(ii) $7.25 per hour beginning August 1, 2015;

(iii) $7.75 per hour beginning August 1, 2016; and

(iv) the rate established under paragraph (f) beginning January 1, 2018.

(c) Notwithstanding paragraph (b), during the first 90 consecutive days of
employment, an employer may pay an employee under the age of 20 years a wage of at least:

(1) $6.50 per hour beginning August 1, 2014;

(2) $7.25 per hour beginning August 1, 2015;

(3) $7.75 per hour beginning August 1, 2016; and

(4) the rate established under paragraph (f) beginning January 1, 2018.

No employer may take any action to displace an employee, including a partial
displacement through a reduction in hours, wages, or employment benefits, in order to
hire an employee at the wage authorized in this paragraph.

deleted text begin (d) Notwithstanding paragraph (b), an employer that is a "hotel or motel," "lodging
establishment," or "resort" as defined in Minnesota Statutes 2012, section 157.15,
subdivisions 7, 8, and 11, must pay an employee working under a contract with the
employer that includes the provision by the employer of a food or lodging benefit, if the
employee is working under authority of a summer work travel exchange visitor program
(J) nonimmigrant visa, a wage of at least:
deleted text end

deleted text begin (1) $7.25 per hour beginning August 1, 2014;
deleted text end

deleted text begin (2) $7.50 per hour beginning August 1, 2015;
deleted text end

deleted text begin (3) $7.75 per hour beginning August 1, 2016; and
deleted text end

deleted text begin (4) the rate established under paragraph (f) beginning January 1, 2018.
deleted text end

deleted text begin No employer may take any action to displace an employee, including a partial
displacement through a reduction in hours, wages, or employment benefits, in order to
hire an employee at the wage authorized in this paragraph.
deleted text end

deleted text begin (e) deleted text end new text begin (d) new text end Notwithstanding paragraph (b), a large employer must pay an employee under
the age of 18 at a rate of at least:

(1) $6.50 per hour beginning August 1, 2014;

(2) $7.25 per hour beginning August 1, 2015;

(3) $7.75 per hour beginning August 1, 2016; and

(4) the rate established under paragraph (f) beginning January 1, 2018.

No employer may take any action to displace an employee, including a partial
displacement through a reduction in hours, wages, or employment benefits, in order to
hire an employee at the wage authorized in this paragraph.

new text begin (e) Notwithstanding paragraph (b), every employer must pay an employee receiving
gratuities a wage of at least:
new text end

new text begin (1) $8.00 per hour if the employee earns sufficient gratuities during the workweek
so that the sum of $8.00 per hour and gratuities received averages at least $12.00 per
hour for the workweek; or
new text end

new text begin (2) the greater of the wage rate under this section or United States Code, title 29,
section 206(a)(1), if the employee does not earn sufficient gratuities during the workweek
so that the sum of $8.00 per hour and gratuities received averages at least $12.00 per
hour for the workweek.
new text end

new text begin For the purposes of this section, an "employee receiving gratuities" means an employee who
customarily and regularly receives more than $30 per month in gratuities. The employer
must inform a potential employee who may receive gratuities, during the employment
interview, of the applicable wage under this paragraph. The employer must provide the
potential employee with a written copy of the wages required under this paragraph and
the potential employee shall initial the form indicating he or she has received the notice.
A copy of the signed notice must be kept on file by the employer. If the Minnesota
Department of Human Rights makes three or more probable cause determinations of
sexual harassment, as defined in section 363A.03, subdivision 43, regarding a single
employer, this paragraph no longer applies to that employer and the employer must pay all
employees the otherwise applicable minimum wage under this section.
new text end

(f) No later than August 31 of each year, beginning in 2017, the commissioner shall
determine the percentage increase in the rate of inflation, as measured by the implicit
price deflator, national data for personal consumption expenditures as determined by
the United States Department of Commerce, Bureau of Economic Analysis during the
12-month period immediately preceding that August or, if that data is unavailable, during
the most recent 12-month period for which data is available. The minimum wage rates in
paragraphs (b), (c), (d), and (e) are increased by the lesser of: (1) 2.5 percent, rounded
to the nearest cent; or (2) the percentage calculated by the commissioner, rounded to the
nearest cent. A minimum wage rate shall not be reduced under this paragraph. The new
minimum wage rates determined under this paragraph take effect on the next January 1.

(g)(1) No later than September 30 of each year, beginning in 2017, the commissioner
may issue an order that an increase calculated under paragraph (f) not take effect. The
commissioner may issue the order only if the commissioner, after consultation with the
commissioner of management and budget, finds that leading economic indicators, including
but not limited to projections of gross domestic product calculated by the United States
Department of Commerce, Bureau of Economic Analysis; the Consumer Confidence Index
issued by the Conference Board; and seasonally adjusted Minnesota unemployment rates,
indicate the potential for a substantial downturn in the state's economy. Prior to issuing
an order, the commissioner shall also calculate and consider the ratio of the rate of the
calculated change in the minimum wage rate to the rate of change in state median income
over the same time period used to calculate the change in wage rate. Prior to issuing the
order, the commissioner shall hold a public hearing, notice of which must be published in
the State Register, on the department's Web site, in newspapers of general circulation, and
by other means likely to inform interested persons of the hearing, at least ten days prior to
the hearing. The commissioner must allow interested persons to submit written comments
to the commissioner before the public hearing and for 20 days after the public hearing.

(2) The commissioner may in a year subsequent to issuing an order under clause (1),
make a supplemental increase in the minimum wage rate in addition to the increase for
a year calculated under paragraph (f). The supplemental increase may be in an amount
up to the full amount of the increase not put into effect because of the order. If the
supplemental increase is not the full amount, the commissioner may make a supplemental
increase of the difference, or any part of a difference, in a subsequent year until the full
amount of the increase ordered not to take effect has been included in a supplemental
increase. In making a determination to award a supplemental increase under this clause,
the commissioner shall use the same considerations and use the same process as for an
order under clause (1). A supplemental wage increase is not subject to and shall not be
considered in determining whether a wage rate increase exceeds the limits for annual wage
rate increases allowed under paragraph (f).

Sec. 2.

Minnesota Statutes 2014, section 177.24, is amended by adding a subdivision
to read:

new text begin Subd. 3a. new text end

new text begin Gratuities; credit cards or charges. new text end

new text begin (a) Gratuities presented to an
employee via inclusion on a debit, charge, or credit card shall be credited to that pay
period in which they are received by the employee and for which they appear on the
employee's tip statement.
new text end

new text begin (b) Where a gratuity is given by a customer through a debit, charge, or credit card,
the full amount of gratuity must be allowed the employee.
new text end

Sec. 3. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2014, section 177.24, subdivision 2, new text end new text begin is repealed.
new text end