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MRA Report: $15 Wage Talk Continues in Minneapolis



There is important advocacy news on two fronts again this month. The Minnesota Legislature has been in session since early January and there is a great deal to report from your state capitol. The Minneapolis discussion of a local minimum wage is continuing and also  has been active in recent weeks.

Let’s start with the work being done in St. Paul. Two major bills passed and were signed into law by Governor Dayton in the first two weeks of the 2017 session. This hasn’t happened often and is considered to be a good sign that the session isn’t headed for gridlock between a DFL governor and a GOP-controlled legislature.

The new law getting the most attention is a health insurance measure that provides a state subsidy to families that buy coverage on the individual market and are not eligible for a federal tax credit. The state will provide a rebate of 25 percent of the premium paid for 2017, only for this year, while congress and the legislature work on other ways to reduce high premiums in the individual market. The subsidies are estimated to cost about $300 million. Another important part of the bill will allow for-profit companies to operate health plans in Minnesota for the first time. Proponents of for-profit plans argue that increased competition will provide more choices for consumers and increase efficiency.

The second early bill provides conformity for Minnesota state taxes with changes made by the federal government in time for filing 2016 tax returns. Most of the provisions affect individual filers, but there are some business tax provisions as well, including conformity on the 15-year depreciation schedule for retail and foodservice leasehold improvement, conformity on the work opportunity tax credit and on the treatment of food donations to recognized charities. Ask your tax preparer how these changes will affect your business.

The Minnesota Legislature has set deadlines for acting on bills that are much earlier than in prior sessions. All of the major budget bills need to be out of committee by March 31, about seven weeks prior to the mandatory adjournment on May 22. This is another sign that the legislative leadership wants to avoid budget gridlock with Governor Dayton. 

Some other bills that are moving at the capitol and impact our industry include:

Uniform Labor Standards bills would preempt the authority of cities and counties to enact local minimum wage and employer mandate ordinances. The bills have been heard in committee and are likely to pass the House and the Senate. Putting the bills in a form that Governor Dayton will sign is a major topic of discussion;

Extended liquor service hours for the 2018 Super Bowl is a timely topic and is the subject of bills that are moving along in both the house and the senate;

A bill to exempt foodservice equipment from the state sales tax was introduced recently and is a high priority for the Minnesota Restaurant Association.

The City of Minneapolis is holding a series of listening sessions to gather input for a report requested by the city council on establishing a higher minimum wage for the city. This effort started because of very impassioned advocacy by the $15 Now coalition. As we wrote in this column last month, the restaurant industry is extremely interested in this issue and has been actively organizing to influence the eventual outcome. 

The MRA convened six neighborhood meetings for owners, managers and others who are interested in the issue. More than 100 people, both members and non-members, attended these Minneapolis Restaurant Forums in January. It would be an understatement to say that a robust discussion occurred. Although there are many points of view in the industry that range from “just say no” to support for the idea, the consensus continues to be that we have the greatest chance of making a difference with a nuanced approach. Based on what we have heard so far, the MRA and the much broader Minneapolis Restaurant Forum will support a Pathway to $15 that includes:

Recognition of total taxable income for all of our employees, including those who receive tips. This will take the form of a $9.50 tipped minimum wage for those who make $15 an hour or more during a pay period with their tips and their wages combined;

A youth wage for workers under 19 so that they can compete for their first job with more experienced applicants;

Consistent treatment of all businesses including chain or franchised locations. The $15 Now proposal is for a three-year phase-in for large businesses even if the Minneapolis location is a small restaurant;

A phase-in of a higher wage over as many steps as possible, probably reaching $15 in 2023.

There is more information, including a schedule of Minneapolis listening sessions and an easy tool for communicating with the city council at www.pathwayto15.org. The announced timing for the staff report is for it to be completed in early May; however, there is concern that because 2017 is an election year the timeline could be advanced. Please consider engaging on this important issue. Although the proposal is for Minneapolis now, it is likely to spread to other cities in the future. 


Dan McElroy is executive vice president of the Minnesota Restaurant Association and president and CEO of Hospitality Minnesota, which also includes the Lodging and Resort & Campground associations.

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