Pawlenty rejects minimum wage hike

A bill that would boost the minimum wage in Minnesota to $7.75 an hour by 2009 was vetoed Thursday by Gov. Tim Pawlenty, who said the lack of a tip credit in the legislation was the deal-breaker for him.

The bill would raise the hourly minimum for large employers -- currently $6.15 -- by 60 cents in July, and by another dollar next summer.

For small employers, the $5.25-an-hour minimum would go up 50 cents in July and another dollar next year.

In his veto message, Pawlenty said the minimum wage approved by the Legislature would give Minnesota the seventh-highest in the country, hurting efforts to maintain jobs during the economic slowdown and ultimately raising consumer costs.

Pawlenty said he had made it clear he would support a reasonable increase in the minimum wage provided the bill included a tip credit, which allows employers to pay a lower wage to workers who get gratuities for their services, such as waiters.

"Minnesota is one of only a handful of states that do not recognize a tip credit at the state level," Pawlenty wrote in his message. "A tip credit is applied in 43 states for calculating the base wage for tipped employees. The tip credit is essential for the continued viability of many employers."

Worker advocate groups criticized the veto, saying they had compromised several times to meet Pawlenty's concerns only to have him reject the bill anyway.

In his message, Pawlenty said he would consider a bipartisan minimum wage increase in next year's session if it's reasonable and includes a tip credit. He noted that the federal minimum wage will rise to $6.55 this year and $7.25 next year for most employers.

The bill had passed the House and Senate on largely partisan votes, falling short of the veto-proof majorities necessary to assure an override.

Also Thursday, Pawlenty vetoed:

• A child welfare bill that would require a higher standard of evidence to remove criminally suspect care workers from contact with children, nursing home residents and vulnerable adults.

Pawlenty said the bill backs off reforms passed in 2005 that barred care workers who were convicted of a number of serious felony offenses. He said he also didn't like a provision in the bill that would remove the presumption of confidentiality for adoptions that occurred before 1977.