New year, new minimum-wage rates as of Jan. 1, 2021

Minnesota’s minimum-wage rates will be adjusted for inflation beginning Jan. 1, 2021, to $10.08 an hour for large employers and $8.21 an hour for other state minimum wages.

As of Jan. 1, 2021:

• Large employers must pay at least $10.08 an hour when the employer’s annual gross revenues are $500,000 or more.
• Small employers must pay at least $8.21 an hour when the employer’s annual gross revenues are less than $500,000.
• The training wage rate, $8.21 an hour, may be paid to employees younger than 20 years of age for the first 90 consecutive days of employment.
• The youth wage rate, $8.21 an hour, may be paid to employees younger than 18 years of age.

These state minimum-wage rates will not apply to work performed in the cities of Minneapolis and St. Paul, which have higher minimum-wage rates.

In the balance of the state, for February 2020, an estimated 206,000 jobs, or 8.5% of the total, paid the minimum wage or less. February 2020 was the last month before the COVID-19 pandemic had a significant effect on the economy.