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SF 3108

as introduced - 90th Legislature (2017 - 2018) Posted on 03/09/2018 09:11am

KEY: stricken = removed, old language. underscored = added, new language.

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Current Version - as introduced

A bill for an act
relating to employment; modifying the minimum wage for certain employees
receiving gratuities; amending Minnesota Statutes 2016, section 177.24, subdivision
1, by adding a subdivision; repealing Minnesota Statutes 2016, section 177.24,
subdivision 2.

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

Section 1.

Minnesota Statutes 2016, 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.

(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:

(1) $7.25 per hour beginning August 1, 2014;

(2) $7.50 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.

(e) (d) 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.

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

(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

(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.

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.

(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 2016, section 177.24, is amended by adding a subdivision to
read:


Subd. 3a.

Gratuities; credit cards or charges.

(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.

(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.

Sec. 3. REPEALER.

Minnesota Statutes 2016, section 177.24, subdivision 2, is repealed.

APPENDIX

Repealed Minnesota Statutes: 18-5503

177.24 PAYMENT OF MINIMUM WAGES.

Subd. 2.

Gratuities not applied.

No employer may directly or indirectly credit, apply, or utilize gratuities towards payment of the minimum wage set by this section or federal law.

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