Minnesota Minimum Wage: Rate, Tipped Wage, and Local Rules

In Minnesota, the state minimum wage is well above the federal floor, and - critically - Minnesota does not allow a tip credit. That means an employer must pay tipped employees the full state minimum wage in cash; tips are on top of the wage, not counted toward it. As of 2026, Minnesota's large-employer minimum wage is in the range of about $11.41 per hour, set under Minnesota Statutes section 177.24 and adjusted for inflation each January. Because this figure is recalculated annually by the Minnesota Department of Labor and Industry, always confirm the exact current rate with that agency before relying on it for payroll or a wage claim.

How Minnesota's minimum wage compares to federal law

The federal minimum wage under the Fair Labor Standards Act (FLSA) has been $7.25 per hour since 2009. Minnesota's minimum wage is substantially higher, so the state rate is what almost every Minnesota worker is entitled to. When state and federal minimum-wage laws differ, the employer must pay whichever rate is higher - and in Minnesota that is the state (or, in some cities, the local) rate.

Minnesota historically used a two-tier system that paid a lower wage at "small" employers (those with annual gross revenue under $500,000) and a higher wage at "large" employers. A 2024 law change phased out most of the gap: effective January 1, 2025, the small-employer, 90-day training, and youth subminimum tiers were consolidated, so the great majority of Minnesota workers are now entitled to the single statewide rate. A small number of narrow exceptions still exist (discussed below), but the practical rule for most employees is one rate that rises each year.

Inflation indexing: why the rate changes every January 1

Minnesota law requires the Commissioner of Labor and Industry to adjust the minimum wage annually for inflation, capped so the increase cannot exceed a set percentage (historically 2.5%) in a single year. The new rate takes effect every January 1, and the Department announces it months in advance. This is why you should never assume last year's number is still correct: the figure cited above (roughly $11.41 for 2026) reflects the most recent adjustment, but the authoritative, current amount is published by the Minnesota Department of Labor and Industry. Treat any specific dollar figure as a starting point and verify it at the source.

Tipped employees: no tip credit in Minnesota

This is one of the most important differences between Minnesota and federal law. Under the FLSA, an employer can pay a tipped worker a cash wage as low as $2.13 per hour and use a "tip credit" to count tips toward the rest of the minimum wage. Minnesota prohibits this entirely. Minnesota Statutes section 177.24 requires employers to pay the full state minimum wage in direct wages, and tips a worker receives belong to the worker on top of that wage - they cannot be used to offset the employer's minimum-wage obligation.

Minnesota is one of only a handful of states with this rule, and it has practical consequences:

• Servers, bartenders, and other tipped staff must receive at least the full minimum wage as a base hourly wage, before tips.
• Tips are the property of the employee. An employer generally cannot require employees to turn tips over to the house.
• Mandatory tip pooling is restricted. Under Minnesota law, an employer cannot require employees to share or pool gratuities; any tip-sharing arrangement must be entered into voluntarily by the employees themselves, without employer coercion.
• Service charges are different from tips. A mandatory service charge added to a bill is not automatically a tip. Minnesota requires that customers be clearly informed if a service charge is not being paid to the employee as a gratuity.

Because Minnesota has no tip credit, a tipped worker who is paid less than the full minimum wage in base pay - even if tips would have made up the difference - generally has a wage claim.

Limited exceptions to the standard rate

A few narrow categories may be paid differently, and these are defined by statute and rule rather than by employer preference:

• Youth and short-term training wages. Minnesota law has historically permitted a lower training wage for the first 90 consecutive days of employment for workers under 20, and a youth wage for workers under 18. The 2024 reforms narrowed and adjusted these tiers; confirm whether and how they currently apply with the Department before paying any subminimum rate.
• Certain workers with disabilities, under specific certificated programs, and certain seasonal or recreational employees, may fall under separate provisions.
• Employees covered only by federal law in limited situations - but most Minnesota employees are covered by the state law, which is more protective.

These exceptions are easy to misapply. If an employer is paying you below the standard state rate and claims an exception, verify it against the current Department of Labor and Industry guidance.

Local minimum wages: Minneapolis and St. Paul

Minnesota allows cities to set their own higher minimum wages, and two have done so. If you work in these cities, the local rate controls when it is higher than the state rate:

• Minneapolis adopted a citywide minimum wage ordinance that phased up to a single rate for all employers and now adjusts annually for inflation. The Minneapolis rate is meaningfully higher than the statewide minimum, and it too prohibits a tip credit. Check the City of Minneapolis for the current figure, which changes each January.
• St. Paul uses a tiered schedule based on employer size (macro, large, small, and micro businesses), with larger employers reaching the top rate first and the smallest businesses phasing in over a longer period. After reaching the target, St. Paul rates also adjust for inflation. Like the state and Minneapolis, St. Paul does not permit a tip credit.

Because both cities phase rates by employer size and adjust them annually, the safest approach is to confirm the precise current figure with the relevant city's labor standards office. Outside Minneapolis and St. Paul, the statewide minimum applies.

How to enforce your minimum-wage rights

If you believe you are being paid less than the minimum wage you are owed, you have several options:

• Keep your own records. Track hours worked, your pay rate, tips received, and any deductions. Save pay stubs and schedules.
• Raise it in writing. A clear written request to correct unpaid wages creates a record and sometimes resolves honest payroll errors.
• File a wage claim with the Minnesota Department of Labor and Industry (DLI), Labor Standards division. DLI investigates minimum-wage, overtime, and unpaid-wage complaints and can pursue back pay.
• Consider a private lawsuit. Minnesota's wage laws allow recovery of unpaid wages, and in some cases additional damages and attorney's fees. The Minnesota Attorney General's office also enforces wage laws.
• For Minneapolis or St. Paul violations, you can also contact that city's labor standards enforcement office.

Retaliation for asserting wage rights - such as being fired or having hours cut for complaining about pay - is prohibited.

Where to confirm the current rate

The official, authoritative source for Minnesota's minimum wage is the Minnesota Department of Labor and Industry (DLI), which publishes the current statewide rate, the annual inflation adjustment, and guidance on tipped-employee rules. For local rates, check the City of Minneapolis and the City of St. Paul labor standards pages. Because the state rate changes every January 1 and the cities adjust on their own schedules, always verify the exact figure that applies to your job and employer size before relying on any number - including the approximate 2026 figure cited here.

Official Minnesota Sources

This page is based on Minnesota employment law. Rules and figures change — verify the current details directly with the official Minnesota sources below. This is general legal information, not legal advice.

• Minnesota Department of Labor and Industry - Labor Standards — official Minnesota agency.
• File a Wage Claim - Minnesota Department of Labor and Industry
• Minnesota Statutes Chapter 177 - Minnesota Fair Labor Standards Act (Minimum Wages)

Federal law and local ordinances may also apply. Federal laws like the Fair Labor Standards Act set a national floor, and your city or county may add protections (such as a higher local minimum wage or paid sick leave). Check both alongside Minnesota state law.