The federal minimum wage was enacted in 1938 (it was 25 cents an hour). Minnesota's minimum wage took effect in 1974 (it was $1.80) and has generally but not always mirrored its federal counterpart.
Today, the state's minimum wage is $9 for employers with annual gross revenue of $500,000 or more and $7.25 an hour for employers with annual gross revenue of less than $500,000. On Aug. 1, 2016, those numbers will increase to $9.50 and $7.75, respectively.
Minnesota is one of seven states (the others are California, Nevada, Oregon, Washington, Montana and Alaska, plus Guam) that does not permit the so-called "tip credit," which allows an employer to withhold a percentage of its minimum wage obligations from its tipped employees.
In Minnesota, the tip credit was eliminated by the 1984 Legislature — at the time, it was 20 percent of what was then the $3.35 minimum wage — and was phased out in stages, ending in 1988.
In 43 states, the maximum tip credit an employer can currently claim is 70 percent of the federal minimum wage of $7.25 per hour. Seventeen of those states set their tip credit at that maximum, which translates to an hourly wage of $2.13 per hour.
