On November 14, 2018, in a unanimous vote, the St. Paul City Council adopted a $15 minimum wage ordinance which will take effect on July 1, 2020. Similar to ordinances passed across the country and across the river in Minneapolis, the ordinance will have a huge impact on employers in St. Paul, as well as those who regularly send employees into the city to work. Veena Iyer, a labor and employment attorney at Nilan Johnson Lewis, notes that the absence of a tip credit will be particularly difficult for employers in service industries who are already faced with increasing costs of business and low margins. “I see many service employers taking a hard look at their business and staffing models to deal with these mandates,” Iyer states. Iyer recommends employers start planning now, especially those who are not located in St. Paul but who have employees who work in St. Paul at least two hours per week and therefore must be paid the St. Paul minimum wage for any hours worked in the city. “These employers may need to adopt mechanisms to track hours worked in St. Paul to comply with recordkeeping requirements and to ensure they are paying the correct rates, including overtime.” There is already litigation pending in the Minnesota Court of Appeals regarding the validity of Minneapolis’s minimum wage ordinance, so there is certainly a possibility of litigation regarding the newly-adopted St. Paul ordinance.
