As of Aug. 1, the state minimum wage law enacted in 2014 kicks up a notch.  

The state minimum wage increases to $9 per hour for large employers, and to at least $7.25 per hour for small employers.

Is your city a large or small employer?

Large employers in this context means cities with a total budget greater than $500,000.  

How do you figure out what your total budget includes? Basically include all city operations, so enterprise funds such as water/sewer operations and municipal liquor stores must be included in this calculation of your city's total budget.

However, the Minnesota Department of Labor states that, for purposes of determining city status as a large employer or small employer under Minnesota's minimum wage law, a city need not include revenue from legally separate public entities.  

These legally separate entities are limited to economic development authorities (EDAs), housing redevelopment agencies (HRAs), municipal power or gas agencies, and other special taxing districts created and organized under Minnesota law.

Exceptions for younger employees

There are two exceptions to these wage amounts that apply to younger employees. One is called a "youth wage" and one is called a "training wage."  

The youth wage requires that as of Aug. 1, 2015, large employers and small employers must pay employees under age 18 at least $7.25 per hour (increasing from $6.50 an hour paid these younger workers in 2014).

The "training wage" as of Aug. 1, 2015, allows all employers to choose to pay employees under age 20 a "90-day training wage" of at least $7.25 per hour, but only for their first 90 consecutive days of employment.  

Once that 90 days is up, for large employers the wage paid must increase to $9 per hour while a small employer may keep paying the $7.25 per hour minimum.

What about next year?

For budget planning purposes, note that on Aug. 1, 2016, the Minnesota minimum wage increases to $9.50 per hour for large employers and to $7.75 per hour for small employers.  

Remember that there are both state minimum wage laws and federal minimum wage laws.  

As of Aug. 1, 2015, the federal minimum wage remains at $7.25 per hour for large employers and $5.25 per hour for small employers.  

If both laws apply to a particular employee, that employee is entitled to the higher of the two minimum wages.

These minimum wage requirements do not apply to elected officials; individuals who serve on any governmental board, commission, committee, or other similar body; city volunteers; or any individual employed, directly or indirectly, by the city to provide police or fire protection services.