Minnesota Minimum Wage: State and City Rates

The first payroll question I get from Minnesota founders is almost never about the state rate. It is about a delivery driver, a mobile hygienist, or a two person cleaning crew that spends part of the week inside Minneapolis and part of it in a suburb, and whether that changes anything. It does, by about five dollars an hour.

This page gives you the least you can lawfully pay for an hour of work in Minnesota, at the state level and in the two cities that require more, plus what to do each time one of those rates rises.

Minnesota is unusual in a useful way. The state rate is one number for every employer, small or large, with no tip credit to complicate it. Then two cities layer their own ordinances on top, and one of those cities still sorts employers into four size tiers, two of which step in July rather than January.

The Minnesota State Rate

The Minnesota minimum wage is $11.87 per hour from January 1, 2027 ($11.41 through December 31, 2026). It applies at every employer in the state regardless of headcount or revenue, and it covers hourly, salaried, piece rate, and commission pay alike. Part time and seasonal staff are covered on the same terms as anyone else.

The Minnesota Department of Labor and Industry announced the new figure on August 19, 2026, a 3.99 percent inflation adjustment. The outgoing rate of $11.41 still governs every hour worked through December 31, 2026.

Having one rate for every employer is newer than most owners realize. Minnesota ran a two tier system for a decade, with a lower rate for employers under $500,000 in annual sales, and it ended on January 1, 2025.

The separate youth rate and the J-1 visa rate for hotels, motels, and lodging establishments ended on the same date. One rate now covers all of them, published by the Department of Labor and Industry on its minimum wage page.

The definitions of large employer and small employer still sit in Minnesota Statutes section 177.23, and the $500,000 line still appears there, but it no longer sets a wage. The single most common way to get this wrong in Minnesota today is to follow an older poster or an older payroll setup and pay a small business rate below the state figure.

Two things are worth taking from that ladder. The rate has moved every January without exception, and the training wage moves with it by the same percentage, so a payroll file that updates one figure and not the other will drift out of compliance quietly.

When the Rate Changes Next

The next state increase takes effect January 1, 2027, when the rate rises to $11.87 an hour. Minnesota indexes the minimum wage for inflation every year under Minnesota Statutes section 177.24, and the commissioner of labor and industry has until August 31 to publish the figure that takes effect the following January 1.

The formula is worth knowing because it caps your exposure. The commissioner measures inflation using the implicit price deflator for national personal consumption expenditures over the preceding 12 months, then raises the rate by that percentage or by 5 percent, whichever is smaller. The rate can never be reduced, so a deflationary year simply freezes it.

Recent practice gives you a planning anchor. The 2027 figure, 3.99 percent above $11.41, came out on August 19, 2026, and the 2026 figure landed a year earlier, on August 20, 2025. Budgeting on a similar step for 2028 is reasonable, but do not put a guessed number into payroll. Wait for the published figure.

Tipped Employees and the Tip Credit

Minnesota allows no tip credit. None at all. A tipped employee is owed the full state rate in cash, $11.87 an hour from January 1, 2027, and every tip sits on top of that as the employee’s own property. The minimum wage statute itself bars an employer from crediting, applying, or using gratuities toward the minimum wage.

This puts Minnesota in the minority of states, and it changes restaurant math completely. There is no tip shortfall calculation to run at the end of a pay period, no tipped employee definition to test against a threshold, and no risk of losing a credit through a bad tip pool.

What does need managing is tip handling. The Department of Labor and Industry sets out the rules on its tips and tip credit page, and employers get into trouble on two of them: required tip pooling and deductions for card processing fees.

Both Minneapolis and St. Paul repeat the no tip credit rule in their own ordinances, so tipped staff working inside either city are owed the higher city rate in cash, with every tip on top.

Minneapolis and St. Paul Rates

Two Minnesota cities require more than the state rate: Minneapolis and St. Paul. There are no county ordinances and no other city ordinances, so everywhere else in Minnesota the state figure governs: $11.87 from January 1, 2027. Both cities fix their step dates years in advance, but most future amounts are indexed figures announced closer to the date.

Minneapolis is the simpler of the two. Since July 1, 2024, a single rate has applied across the city regardless of employer size, and it moves every January 1. The city posts the current and coming figures on its minimum wage site, run by the Labor Standards Enforcement Division.

St. Paul keeps its four size tiers and publishes the full schedule on the city’s minimum wage page. Small businesses caught up to the large business rate on July 1, 2026, so from that date only the micro tier of five or fewer employees pays less.

Future steps in the St. Paul schedule are shown as a city rate rather than a dollar figure because they are indexed to the state adjustment.

Business size in St. Paul is the average number of employees per week across the previous calendar year, counting full time, part time, joint, and temporary staff wherever they are located. Owners and board members are not counted.

A St. Paul business under a year old averages its first 13 weeks instead. Integrated enterprises count as one employer, and franchise locations owned by a single franchisee are added together.

In Minneapolis, neither a collective bargaining agreement nor a benefits package can substitute for the cash rate. Employers operating under a union contract still owe every employee at least the city minimum. The city also keeps tips and employer payments toward medical benefit plans out of the definition of wages, as its employer guidance spells out.

Industry Rules and Exemptions

Minnesota sets one statewide minimum wage and no industry specific rate. There is no fast food minimum, no healthcare minimum, and no hospitality minimum.

What Minnesota has instead is a list of workers left outside the state minimum wage in Minnesota Statutes section 177.23, subdivision 7. Most of the list is narrow and none of it is a general purpose exemption a normal small business can reach for. Agriculture accounts for several entries, and each has conditions attached.

Rideshare is the one sector Minnesota does regulate separately, and it does so with a per mile and per minute standard rather than an hourly one. That standard has applied since December 1, 2024, and the rates below are its first inflation adjustments.

From January 1, 2027, transportation network companies (the legal term for rideshare companies) must pay drivers at least $1.33 per mile and 32 cents per minute while a passenger is in the vehicle, with a floor of $5.20 for any trip. A vehicle with a wheelchair securement device earns $2.28 per mile.

The department publishes the full standard, including cancellation pay and the notices a company owes its drivers, on its rideshare driver protections page. Tips do not count toward these minimums and belong entirely to the driver, matching the rule everywhere else in Minnesota wage law.

The last row of the exemptions table trips people up. A ski facility, carnival, or fair may employ seasonal staff outside the state overtime rules, but those employees are still owed the full minimum wage for every hour worked. The exemption points at Minnesota Statutes section 177.25, not at the minimum wage section.

Youth and Training Wages

Minnesota has one reduced rate, and it is not an age rate. The 90 day training wage is $9.68 an hour from January 1, 2027, for workers under 20, and it runs only for the first 90 consecutive days of employment.

The 90 days are calendar days counted from the date of hire, not days actually worked, so a summer hire working three shifts a week burns through the period at the same speed as a full timer.

The separate youth wage for workers under 18 disappeared on January 1, 2025, along with the J-1 visa rate for hotels, motels, and lodging establishments. A 16 year old with 91 days of service is owed exactly what a 40 year old is owed. The training wage also ends on the employee’s twentieth birthday, even if the 90 days are not up.

One rule sits under the training wage and matters more than the rate itself. The statute forbids an employer from taking any action to displace an employee in order to hire someone at the training wage, including a partial displacement through cut hours, reduced pay, or withdrawn benefits. Rebuilding a shift around cheaper teenagers is the exact behavior it targets.

The cities handle young workers differently, and their rules replace the state one for hours worked inside city limits. In St. Paul, employees aged 14 to 17 must get at least 85 percent of the small business city rate for their first 90 days, rounded up to the nearest nickel, which is $13.95 from July 1, 2026.

Minneapolis applies the same 85 percent formula to workers under 20, but only inside a city approved training or apprenticeship program. At the $17.02 city rate that takes effect January 1, 2027, that works out to $14.50.

Hiring a minor brings duties well past the hourly rate, including hour limits, prohibited occupations, and age certificates.

Posting and Notice Requirements

Every Minnesota employer must display the state minimum wage rates poster where employees can easily see it. The Department of Labor and Industry gives it away free on its workplace posters page, in English, Spanish, Somali, Hmong, and Chinese, and the version carrying the 2026 rates was published in October 2025.

The state sheet also comes in a free pack that prints all seven state-mandated posters at once. Alongside the minimum wage sheet, the mandatory set includes the age discrimination notice, the employer sponsored meetings notice, and the Paid Leave notice that became required on January 1, 2026. A poster only needs replacing when Minnesota law changes, which for the wage sheet means every January.

The last two rows are the ones with teeth. Minnesota pairs its posting rules with an individual notice requirement, so a poster alone does not discharge the obligation. Every employee gets a written statement of pay terms at hire, and every change to that rate has to be delivered in writing before it applies.

Minnesota and the Federal Floor

The federal minimum wage has been $7.25 per hour since 2009. Minnesota’s rate is well above it, so the federal figure never governs a Minnesota paycheck. Where an employee is covered by both laws, the department states the rule plainly: the higher state minimum wage is what gets paid.

The gap has practical consequences beyond the hourly number. Federal minimum wage coverage depends on enterprise tests tied to $500,000 in annual sales or on individual engagement in interstate commerce, and a genuinely local corner business can fall outside them. Minnesota law has no such gate, so every employer in the state is covered no matter how small.

Federal rules still matter for what Minnesota law does not displace, including recordkeeping and the classification tests that decide who is owed a minimum wage in the first place.

Two federal connections are worth flagging. The first is the salary threshold for the executive, administrative, and professional exemption, which in practice comes from federal law. Minnesota’s own rules still set weekly salary floors of $155 to $250, so for any employer the federal Fair Labor Standards Act covers, $684 a week is the figure you actually have to meet.

The second federal connection is the subminimum wage for a worker with a disability, meaning pay below the regular minimum. According to the Department of Labor and Industry, employers covered by federal wage and hour law apply to the U.S. Department of Labor for it.

A state permit under Minnesota Statutes section 177.28 has a floor of its own: it can never set a rate below 50 percent of the state minimum wage outside sheltered workshops.

What to Do When a Rate Rises

A minimum wage increase is a payroll project rather than a single field update, and in Minnesota it can arrive twice a year if you employ anyone in St. Paul. Work through the same sequence each time, and start it as soon as the figure is published rather than in the last week of December.

The step most employers skip is the second one. If your budgeting works from a fully loaded hourly figure rather than the base rate, the full cost of an increase is far easier to model.

Keeping the rate right is the easy half. Keeping the paperwork that proves it, meaning offer letters, wage notices, change notices, and poster acknowledgments, is where small teams lose hours every January. FirstHR keeps that documentation attached to the employee record, so an updated rate flows into onboarding materials instead of sitting in a folder nobody opens until a wage claim arrives.

Frequently Asked Questions

What is the minimum wage in Minnesota right now?

It is $11.87 per hour from January 1, 2027, at every employer in the state, and $11.41 for hours worked through December 31, 2026. The old split between large and small employers ended on January 1, 2025, so the $500,000 sales line no longer changes what you pay. The rate covers hourly, salaried, piece rate, and commission pay, full time and part time. Work performed inside Minneapolis or St. Paul is covered by a higher city rate instead.

Can I count tips toward the minimum wage in Minnesota?

No. Minnesota allows no tip credit at all, so a tipped employee receives the full state rate in cash plus every tip earned. Employers also cannot require staff to pool or share tips, although employees may agree among themselves without employer involvement. Since August 1, 2024, tips paid by card must reach the employee in full, with no deduction for the processing fee.

Which Minnesota cities have their own minimum wage?

Minneapolis and St. Paul, and no others. Minneapolis requires $17.02 from every employer starting January 1, 2027, and covers anyone working at least two hours inside the city in a calendar week. St. Paul requires $16.37 from businesses with six or more employees and $14.25 from those with five or fewer. In both cities what matters is where the hours are physically worked, not where the business is registered.

What do I pay a 17 year old in Minnesota?

The full state rate, $11.87 from January 1, 2027, unless the 90 day training wage applies. Minnesota removed its separate youth rate on January 1, 2025, so age alone no longer buys a lower wage. Workers under 20 may be paid $9.68 from that date for the first 90 consecutive days of employment, counted in calendar days from the date of hire. The employer may not cut anyone’s hours or pay in order to hire at that rate.

Does Minnesota have a fast food or healthcare minimum wage?

No. Minnesota sets a single statewide rate with no industry specific minimum. Several narrow categories sit outside the state minimum wage, including certain salaried agricultural workers, seasonal camp staff, and taxicab drivers. Rideshare has its own standard, in place since December 1, 2024: from January 1, 2027, at least $1.33 per mile and 32 cents per minute with a passenger aboard, with a $5.20 trip minimum.

Do I have to post the minimum wage in Minnesota?

Yes. Display the state minimum wage rates poster where employees can easily see it, and replace it each January when the new rate takes effect. The department provides it free in five languages. Minneapolis and St. Paul each require their own labor standards poster on top of the state one. Minnesota also requires written notice of pay terms at hire and written notice of any rate change before it applies.

When does Minnesota’s minimum wage go up again?

On January 1, 2027, when the rate becomes $11.87 an hour. The commissioner of labor and industry has until August 31 to publish the coming year’s figure, and the increase is capped at 5 percent. The 2027 adjustment, published August 19, 2026, is 3.99 percent. Minneapolis has already published $17.02 for January 1, 2027, and St. Paul micro businesses step to $15.00 on July 1, 2027.