Labor policy omnibus is bad for workers, fails to make Minnesota more competitive for businesses

Senate Democrats this week passed a labor policy omnibus bill that fails to increase employment opportunities and make Minnesota a competitive place to grow a business. The bill contains burdensome policies that will ultimately increase costs for businesses, resulting in job loss and decreased earnings for Minnesota workers.

“Minnesota still has 10,000 fewer jobs now than it did 4 years ago, and this bill does nothing to address our failing economy,” said Senator Jeff Howe (R-Rockville). “This is yet another one-size-fits-all policy that fails to offer adequate solutions for the different types of employers and employees throughout our state. We should be focusing on making Minnesota a desirable place to live, work, and do business in. That means making life more affordable and creating viable opportunities for businesses and employees. This bill fails on all fronts.”

This bill contains language that would modify Minnesota’s minimum wage in a number of ways. The Minnesota Department of Labor and Industry (DLI) can currently adjust minimum wage with a cap of 2.5% on the adjustment. Proposed changes will now allow the minimum wage to be changed up to 5% annually based on inflation. Additionally, the legislation also removes the distinctions between large and small employers from the minimum wage section of the Minnesota Fair Labor Standards Act, thereby eliminating a distinction that currently allows large employers to pay a lower rate to employees under the age of 18. It would also impact the minimum wage for hotels and resorts with summer work travel exchange employees.

Minneapolis and St. Paul recently implemented aggressive minimum wage increases. The Federal Reserve Bank of Minneapolis found that this led to job loss in both cities, and also led to workers earning fewer hours.

Other significant items in the bill include:

  • Requirement for businesses to pay the 3-4% service fee on credit card tips
  • Expansion of prevailing wage for projects with intended use by the public
  • Addition of restrictions on minor electrical work in non-owner-occupied housing