Minneapolis Minimum Wage Ordinance OK’d; Merit Drywall KO’d?

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Local Minimum Wages OK’d

The Minneapolis minimum wage ordinance has been upheld by the Minnesota Supreme Court. The ordinance was passed in June, 2017, and over time it phases in a $15.00 per hour minimum wage for any employee who performs at least two hours of work in a calendar week within the City of Minneapolis.

Before the ordinance even took effect, it was challenged in court by Graco, Inc. Graco claimed that the ordinance is preempted by the Minnesota Fair Labor Standards Act and is, therefore, unenforceable. The trial court ruled against Graco, as did the Minnesota Court of Appeals. In a decision issued today, the Minnesota Supreme Court affirmed the lower courts and ruled that the ordinance is valid.

The Supreme Court’s ruling has far-reaching implications for Minnesota employees and employers. By upholding this ordinance, the Court has given other Minnesota cities the green light to enact their own minimum wage standards. It remains to be seen whether this will be a boon to employees who get higher wages or a bust for employers who must manage a patchwork quilt of wage rules throughout the state.

Merit Drywall KO’d?

In a completely unrelated matter, owners of Clearwater, MN – based Merit Drywall, Inc. have been charged with fraud. According to media reports, one of the underlying allegations is that the company misclassified employees as independent contractors to avoid paying workers’ compensation insurance and other benefits. See, Clearwater drywall company faces workers’ comp fraud charges (Star Tribune Jan. 21, 2020).

Although these allegations have yet to be proved, they highlight the severe consequences companies face when they misclassify their employees as independent contractors.

If you have questions about minimum wage, independent contractor, or any other employment law issues, please contact attorney Tom Jacobson for legal advice. As an MSBA-certified Labor and Employment Law Specialist, Tom is available to advise and guide you through the process.

Disclaimer: this article is for general information purposes only and is not to be used as legal advice.

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