Minneapolis Passes New Living Wage Ordinance
By: INGRID N. CULP
January 2006
Companies receiving contract or subsidy payments from the City of Minneapolis may need to pay a minimum wage of no less than $12.09 (or higher) per hour for all non-exempt employees beginning January 1, 2007.
On November 10, 2005, Minneapolis Mayor R.T. Rybak signed into law a new living wage ordinance. The ordinance requires companies that receive contracts or subsidies from the City of Minneapolis totaling $100,000 or more to pay their employees a living wage. The ordinance applies to any contract or business subsidy entered into or renewed after December 31, 2006. In the case of city contracts, the living wage must be paid for the duration of the city contract and for all hours worked on the city contract. In the case of city subsidies, the goal is for at least one living wage job to be created for every $25,000 of subsidy.
For employers that provide basic health insurance benefits, the living wage must be at least 110% of the federal poverty level for a family of four. For those that do not, the living wage must be at least 130% of the federal poverty level for a family of four. At current federal poverty levels, the living wage would be $10.23 per hour for employers that provide health insurance, and $12.09 per hour for employers that do not. The living wage is subject to change within one week of adjustments to federal poverty levels.
The ordinance includes approximately 16 exemptions, including exemptions for certain small businesses; companies bound by collective bargaining agreements; temporary internships or similar positions; contracts or subsidies for housing, job readiness, and training; or pollution control or abatement.
Recipients of City of Minneapolis contracts or subsidies are encouraged to contact legal counsel for additional information.