Minnesota Laws They Are A-Changing On Jan. 1

December 14, 2023 Last Edit: June 5, 2025

Sick Time, Pay History Ban, Minimum Wage Hike Take Effect 1/1/2024

Minnesota Laws They Are A-Changing On Jan. 1

The 2023 Minnesota Legislative session will go down as one of the most frustrating for small business owners in our state’s history. With a budget surplus of nearly $20 billion and a fragile economic recovery on Main Street, NFIB MN pursued an agenda focused on small business recovery and believed time was right for small business tax and regulatory relief. Unfortunately, Gov. Walz and the DFL-controlled Legislature had other plans. They stuck Main Street with $10 billion in tax and fee hikes, burdensome new mandates, and a reckless spending spree instead. The result is a looming budget deficit and a slow burn of new laws that will take effect over the coming years. Small business owners should know about a few big ones taking effect on January 1, 2024: Vehicle Registration (Tab) Fee Increase. Over the longstanding objection of small business owners, DFLers included a huge increase on car and truck tab fees in the 2023 Omnibus Transportation Bill. For vehicles initially registered on or after 11/16/2020, the registration fee is $10 plus 1.54% of the vehicle’s MSRP and destination charge (previously: 1.25%). For vehicles initially registered prior to 11/16/2020, the registration fee is $10 plus 1.575% of the vehicle’s MSRP and destination charge (previously: 1.285%). In year one, tab fees will still be based on 100% of the MSRP. However, the depreciation schedule on which tab fees are based as the car ages increases: – from 90% to 95% of MSRP in Year 2 – by 10% of MSRP in Years 3-8 – from 20% to 25% in Year 9 In Year 10, the formula stays at 10% of the vehicles value. In Year 11, drivers will see some savings – a drop from the current flat rate of $25 to $20. The net effect is vehicle owners will pay $790 million more for tabs over the next four years. Earned Sick and Safe Time (ESST). NFIB had blocked this bill from becoming law for years before it passed on a party-line vote earlier this year. This law requires that all employers provide all employees with one hour of “earned sick and safe time” for every 30 hours worked. In addition, employers must provide notice to employees upon hire, in workplace posters, and on pay statements. You can learn more about the details here: NFIB WEBINAR: Everything You Need to Know About MN Earned Sick and Safe Time Law – NFIB. The Minnesota Department of Labor and Industry (MN DLI) also has more information, including FAQs, Sample Employee Notice, and the ESST Workplace Poster here: Earned sick and safe time | Minnesota Department of Labor and Industry (mn.gov). Applicant Pay History Ban. Another law that NFIB had successfully lobbied against for years became law earlier this year on a party-line vote. Beginning on January 1, employers are prohibited from inquiring about, considering or requiring disclosure of a job applicant’s pay history. The prohibition into the pay history of an applicant does not apply if it’s a matter of public record under federal or state law. An applicant may voluntarily and without any prompting disclose their pay history for the purpose of negotiating wages, salary, benefits or other compensation. A violation of the prohibition is subject to investigation and penalties from the Minnesota Department of Human Rights (MDHR). You can learn more about this new prohibition at MDHR’s Pay History Ban page: Pay History / Minnesota.gov (mn.gov). Minimum Wage Increase. Passed into law the last time DFLers controlled state government, the annual minimum wage increase is the gift that keeps on punishing. Beginning on January 1, the state minimum wage rates will increase as follows: $10.85: large employers, defined as having annual gross revenues of $500,000 or more $8.85: small employers, defined as having annual gross revenues les than $500,000; training wage paid to employees < 20 years old for the first 90 consecutive days of employment; and youth wage paid to employees < 18 years of age. See the MN DLI’s Minimum Wage page for more information: Minimum-wage rates adjusted for inflation as of Jan. 1, 2024 | Minnesota Department of Labor and Industry (mn.gov). Small employers in the Twin Cities will also see an increase in local minimum wage rates: St. Paul $15.57: large employers, defined as having more than 100 employees $14.00: small employers, defined as having 6 – 100 employees $12.25: micro employers, defined as having 5 or fewer employees $11.90: youth wage, applicable to certain employees under the age of 20 Find more information St. Paul’s Minimum Wage page: Minimum Wage Employee Resources | Saint Paul Minnesota (stpaul.gov). Minneapolis $15.57: large employers (> 100 employees, effective 1/1/24) $15.57: small employers (100 or fewer employees, **effective 7/1/24**) Find more information Minneapolis’s Minimum Wage page: Employer Resources (minneapolismn.gov).

Topics:

Taxes

State:

Minnesota

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Minnesota Laws They Are A-Changing On Jan. 1

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