Senate Democrats today passed a labor policy omnibus bill that does little to increase employment opportunities or make Minnesota a competitive place to grow a business. Instead, it contains burdensome policies that will ultimately increase costs for businesses and result in job loss and decreased earnings for Minnesota workers.
“In a state that still has 10,000 fewer jobs today than it did before the pandemic, we need to do more to expand the economy and create good jobs for all Minnesotans,” Senator Gene Dornink (R-Brownsdale), Senate Labor Committee Republican lead, said. “Yet this year’s labor policy omnibus bill neglects to address the current needs of Minnesota’s labor industry.”
Notably, the labor policy omnibus bill contains language that would modify Minnesota’s minimum wage rates. This includes a provision that would allow the Minnesota Department of Labor and Industry (DLI) to adjust the minimum wage based on inflation, up to 5% annually. Currently, there is a cap of 2.5% on the adjustment.
“Minimum wage increases have a poor track record of delivering for workers,” Sen. Dornink said. “AfterMinneapolis and St. Paul implemented aggressive minimum wage increases, the Federal Reserve Bank of Minneapolis found that both cities actually lost jobs and workers earned fewer hours. The promises are high, but the results fail to deliver for Minnesotans.”
Additionally, this legislation would remove the distinctions between large and small employers from the minimum wage section of the Minnesota Fair Labor Standards Act. This would eliminate 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.
“We should not be implementing one-size-fit all policies that treat all Minnesota employers and workers the same. It is important that we have different options for different businesses. Small businesses are essential to Minnesota’s economy, but they operate in a much different way than large corporations. This is why we should be passing policies that prioritize the needs of small businesses and help them thrive,” Sen. Dornink added.
Other significant items in labor policy omnibus would:
- Require businesses to pay the 3-4% service fee on credit card tips;
- Expand prevailing wage for projects with intended use by the public; and
- Place additional restrictions on minor electrical work in non-owner-occupied housing.
During the floor debate, Senate Republicans introduced an amendment to protect job opportunities for Minnesota workers. Offered by Senator Rich Draheim (R- Madison Lake), the amendment sought to keep the minimum wage inflationary cap at 2.5%. It would also allow DLI to halt the increase if a negative economic forecast is coming. The amendment failed on party-lines.