HispanicBusiness

Thousands of Minnesota's lowest-wage workers would get a salary hike and more overtime pay in a minimum-wage bill passed by the Minnesota House on Friday, May 3.

Minnesota is one of the few states with a minimum wage below the federal standard. The House bill passed on a 68-62 vote would give the state one of the nation's highest salary floors.

"This is about paying people enough to get by -- not a living wage, enough to get by," said Rep. Jason Metsa, DFL-Virginia.

The legislation would boost Minnesota's current $6.15-an-hour minimum wage over the next two years until it reaches $9.50 in 2015 and includes automatic raises tied to inflation after that. Employers also would need to start paying workers overtime after 40 hours, down from the current threshold of 48 hours.

But opponents argued that raising the minimum wage would force businesses to cut jobs, ultimately making it harder for those with fewer skills to find work.

"The increase is too fast, too much, too soon on the heels of a very bad recession," said Rep. Jenifer Loon, R-Eden Prairie. "The harder we make it for those employers to provide opportunities, the less chance those with lower skills, many of them young, will have the opportunity to get jobs."

The House's minimum-wage increase could be scaled back. The state Senate plans to vote Wednesday on a bill that would set the minimum wage at $7.75 per hour, said Majority Leader Tom Bakk, DFL-Cook. Bakk said he's worried about raising

the wage too high and too fast, particularly in border towns and for the restaurant industry. "There's a serious competitive issue in some areas of the state, and any increase is probably difficult for them," Bakk said.

Gov. Mark Dayton has said he could support a minimum wage of between $9 and $9.50 per hour.

Most of Minnesota's hourly minimum-wage workers earn the federal minimum wage of $7.25 per hour, rather than the state's lower minimum wage.

About 42,000 minimum-wage workers are employed in restaurants or bars, the most of any industry. Not all of them receive tips, but those who do take home more money.

Sean Harrison, a waiter at Kafe 421 in Minneapolis, said a minimum-wage increase is sorely needed, though not necessarily for himself. While the 34-year-old would welcome the extra money, Harrison's tips allow him to live comfortably, despite his base wage of $7.25 per hour. Not so for his co-workers who don't get tips, he says.

"There's a world of difference between a waiter or a bartender making minimum wage and, say, a kitchen staff member making minimum wage," Harrison said.

A move to amend the bill to allow a form of tip crediting for restaurants failed on a tie vote. Minnesota is one of only seven states that do not allow tip crediting. The state eliminated it in 1990. Lawmakers have since unsuccessfully tried to resurrect it.

The Minnesota Restaurant Association floated an idea it calls a "tipped-employee tier" of the minimum wage, which would essentially freeze the wage floor at $7.25 an hour as long as an employee's earnings, including tips, average $12 an hour every pay period.

During pay periods in which an employee makes less than that, their base rate jumps to the current state-mandated minimum.

The House voted to exempt car dealers, mechanics and farm workers from the new overtime threshold. It was a contentious issue debated on the House floor.

Rep. Pat Garofalo, R-Farmington, said attempts to exempt certain sectors and industries from provisions in the bill shows what a burden it's going to be, particularly for small businesses.

Republicans quoted figures from the National Federation of Independent Business, which opposes the bill, arguing that the higher rates will deter businesses from hiring young, inexperienced workers and will put them at a competitive disadvantage with neighboring businesses in other states.

"The reality is this is a colossal unfunded mandate on the small businesses of Minnesota," Garofalo said. "What the DFL majority refuses to understand is that money does not grow on trees. Someone has to pay the bill."

Proponents argued that the last two minimum-wage increases were signed into law under GOP governors -- Tim Pawlenty in 2005 and Arne Carlson before him.