Living wage.
Minneapolis Code of Ordinances § 38.40
in effect38.40. - Living wage.
(a) Payment of living wage and receipt of business subsidy.
(1) A city contract for services must require city contractors to pay an hourly wage that is at least the living wage for the duration of the contract to employees of the city contractor for hours worked by the employees on the city contract. If a city contract is subject to wage requirements under a collective bargaining agreement, the city contractor shall pay the wage under the collective bargaining agreement subject to the requirements set forth in subsection (c) below.
(2) It is a city goal that one (1) living wage job be created out of every twenty-five thousand dollars ($25,000.00) of city business subsidy. A recipient of a city business subsidy must enter into a city business subsidy agreement with the city that includes a description of the subsidy, goals for the number of jobs created and/or retained, and wage goals for any jobs created and/or retained. In the agreement, the city's department of planning and economic development must negotiate the minimum number of required living wage jobs to be created by the business subsidy recipient. If the number of required jobs is less that the city's goal, the department of planning and economic development must supply written reasons for not meeting the city's goal to the city council.
(3) City bond financing is subject to the requirements of this chapter to the extent the intent of the bond financing is to create jobs and the financing results in a net economic benefit to recipient greater than one hundred thousand dollars ($100,000.00). This benefit must exceed that to which the recipient could have obtained in the capital markets.
(b) Calculation of living wage. The living wage shall be a wage level equivalent to at least one hundred thirty (130) percent of the federal poverty level for a family of four (4). For employers that provide employees basic health insurance benefits, the living wage shall be a wage level equivalent to at least one hundred ten (110) percent of the federal poverty level for a family of four (4). The living wage shall be based on the prevailing federal poverty level and shall be adjusted within one (1) week after the federal government adjusts the rate.
(c) Exemptions.
(1) Subject to the requirements set forth in the enforcement section, subsection (d) below, the following entities, city contracts and business subsidy arrangements are exempt from the living wage and business subsidy requirements:
a. An incorporated entity that falls within the definition of a small business under Minnesota Statute § 645.445; any 501(c) entity which falls under the criteria laid out in Minnesota Statute § 645.445, subdivision 2;
b. 501(c) entities that are sole source providers of service;
c. For-profit entities or 501(c) entities that provide contract health care benefits to city staff or that provide wellness or fitness related products or services to city staff;
d. For-profit entities or 501(c) entities involving city depository and financial service institutions;
e. A recipient of a city contract or city business subsidy that contains an express provision that the purpose of the contract or subsidy is job readiness and training services and that the recipient is exempt from the living wage requirement;
f. A recipient of a city contract or city business subsidy for whom the city council or responsible city agency determines that application of the living wage requirement would conflict with a county, state or federal program requirement;
g. A recipient of a city contract or city business subsidy which is bound by a collective bargaining agreement for the period of the contract or the subsidy;
h. A recipient of a city business subsidy where the purpose of the subsidy is assistance for housing. This exemption does not apply to non-housing portions of a city business subsidy;
i. Any business subsidy awarded solely to remediate redevelopment property polluted by contaminants as defined in Minnesota Statute § 116J.552, subdivision 3;
j. Any business subsidies awarded solely for pollution control or abatement, including assistance from a TIF hazardous substance subdistrict are exempt from this chapter;
k. Any projects that the recipient's investment in the purchase of the site and in site preparation was made at fair market value. This exemption does not apply to other portions of or separate business subsidies for the same city business subsidy recipient;
l. City contracts or business subsidies that lead to the employment of seasonal, part-time or temporary employees whose employment does not reduce or offset the work of permanent employees, on the condition that no more than ten (10) percent of the contract amount is for the employment of such seasonal, part-time or temporary workers, and on the condition that the city contractor or business subsidy recipient is not intending to utilize such labor to avoid the requirements of this chapter;
m. Temporary internships or similar positions that are intended to provide career exposure to new entrants into the relevant workforce;
n. Conduit bonds and 501(c) bonds; and
o. 501(c) entities that provide health and social services directly to low-income and at-risk populations.
(2) Historic preservation projects are exempted from living wage requirements except for jobs created as a result of the renovation, in which case at least seventy-five (75) percent of the new workers must be paid a living wage.
(d) Enforcement.
(1) A recipient of a city contract that fails to meet the living wage requirement at any time during the duration of the contract shall not eligible for a city contract in the next contract cycle or the next calendar year. Any recipient of a city contract that fails to meet the living wage requirement shall be liable to the city for liquidated damages at twenty (20) percent of the value of the contract.
(2) A recipient of a city business subsidy that fails to meet the living wage requirement at any point in the duration of the subsidy within the agreed upon timeframe for the creation of living wage jobs shall not be eligible for a business subsidy for the next calendar year. Any recipient of a city business subsidy shall be liable for liquidated damages to the city. The amount of damages shall be four (4) times the value of the subsidy proportional to the rate at which the recipient failed to create living wage jobs. For example, if a recipient received a subsidy of one million dollars ($1,000,000.00) and only created thirty-nine (39) living wage jobs, instead of forty (40), it would owe one hundred thousand dollars ($100,000.00) to the city or four (4) times their proportional rate of failure of twenty-five thousand dollars ($25,000.00).
(3) No city contractor, subcontractor or recipient of a city business subsidy shall discharge, demote, harass, or otherwise take adverse action against any individual because such individual seeks enforcement of the living wage requirements or testifies, assists, or participates in any manner in an investigation, hearing, or other proceeding to enforce this chapter.
(4) No city contractor or recipient of a city business subsidy shall split or subdivide a contract or subsidy, pay an employee through a third party, or treat an employee as a subcontractor or independent contractor to avoid payment of a living wage. Work presently being performed by city employees may not be contracted out unless the contractors pay employees performing that work a living wage or the current city wage and benefits for similar work, whichever is higher.
(5) This chapter's business subsidy provisions shall be enforced by the department of community planning and economic development, or its successor agency, which shall promulgate regulations as are necessary to implement and administer compliance. This chapter's contract provisions shall be enforced by the civil rights department or its successor agency, which shall promulgate regulations as are necessary to implement and administer compliance.
(6) Upon the request of the appropriate city staff, each city contractor or city business subsidy recipient shall furnish within five (5) working days, a copy of payrolls showing wages paid or records substantiating jobs created from the business subsidy. In the event of noncompliance with staff requests for records and documents, city staff shall promptly notify the city finance officer who shall withhold payments for such periods of noncompliance. During the course of and upon completion of the contract work or business subsidy work, city staff shall have the right to require an appropriate audit of contractor's books to determine compliance or noncompliance with the provisions of this chapter. Each city contractor or business subsidy recipient shall retain the relevant records and documents for a period of not less than one (1) year after the completion of the work.
(7) In the event that noncompliance with this chapter is found, city staff shall place the city contractor or business subsidy recipient on a suspended list and, by written notice, terminate their rights to proceed with the work or such part of the work as to which there has been a violation of this chapter. The city contractor or business subsidy recipient shall be liable to the city for damages sustained in investigating or enforcing this chapter, including attorney's fees, costs of remediation and investigation. The city reserves the right to withhold contract payments to the extent of the underpayment of required wages.
(8) A finding or conclusion by city enforcement staff may be appealed to the director of the civil rights department. (2005-Or-103, § 1, 11-4-05)
Source: City of Minneapolis, Minnesota, Code of Ordinances, City Charter and Park and Recreation Board Code of Ordinances (Municode Library, library.municode.com)URL: https://library.municode.com/mn/minneapolis/codes/code_of_ordinances?nodeId=COOR_TIT2AD_CH38LIWAREPUSPRE_38.40LIWAFetched: 11/2/2026