Minnesota will apply the same $11.87-an-hour minimum wage to every employer, regardless of size, when the rate rises on January 1 — the third increase since the state closed the gap between what large and small employers were required to pay. The Department of Labor and Industry sets the new figure each year through an inflation adjustment, moving the wage from its current $11.41 without a fresh vote in the legislature. The 90-day training wage for workers under 20 rises alongside it, to $9.68 from $9.31.
The end of a two-tier wage system
Until January 1, 2025, Minnesota ran two separate minimum-wage tracks: a higher rate for large employers and a lower one for small businesses. That gap closed when the state moved to a single rate of $11.13 an hour for every employer, according to the Department of Labor and Industry’s own announcement at the time. The $11.87 rate taking effect in 2027 continues that unified structure into its third year, rather than reopening the earlier large-employer, small-employer split.
Before that change, an employer’s size or annual revenue decided which of two wage floors applied to its workers, which meant two employees doing similar work a few miles apart could legally be paid different minimums depending on which company signed their paycheck. Folding both tracks into one number removed that distinction going forward, so every employer covered by the law now moves on the same schedule and the same rate.
Two things worth checking once the rate resets: Minnesota’s new hourly floor applies the same way to every employer, but the deposit still lands in an account with its own separate rules. The 2-month bank protection rule and the frozen-account response in The Bank Account & Debt Protection Kit cover confirming a deposit’s protection and answering a freeze.
How the January adjustment gets calculated
Minnesota’s Department of Labor and Industry adjusts the minimum wage for inflation each year, moving it from $11.41 to $11.87 for 2027 — an increase of 46 cents. That process runs on a statutory clock: under Minnesota Statute 177.24, the commissioner must calculate the rate of inflation no later than August 31 each year, and the resulting increase is capped at whichever is smaller, 5 percent or the measured inflation rate. The same statute bars the commissioner from ever reducing the minimum wage, even in a year when inflation runs negative, and it confirms the rate applies to every employer with no size or revenue exception, the way the $11.13 and $11.41 rates did in the two years before it.
What else moves alongside the wage floor
The 90-day training wage that employers may pay workers under age 20 during their first three months on a job rises to $9.68 an hour in 2027, up from $9.31 in 2026. Beyond that training period, the same $11.87 floor applies to every worker regardless of age, matching the single-rate structure the state adopted for its standard minimum wage in 2025.
What a full-time paycheck looks like at the new rate
At $11.87 an hour, a standard 40-hour week comes to $474.80 before taxes, up from $456.40 at the current $11.41 rate — a difference of $18.40 a week for a worker who gets a full schedule. The training wage moves by less in dollar terms: a 40-hour week at $9.68 comes to $387.20, compared with $372.40 at $9.31, a $14.80 weekly difference for workers still inside their first 90 days on the job.
Where local rates already run higher
Minnesota’s statewide figure is not the last word for every worker. When the Department of Labor and Industry announced the unified $11.13 rate for 2025, it also noted that Minneapolis and St. Paul maintain their own minimum wages — then $15.97 an hour — that supersede the state rate inside city limits. Those two cities set their own annual increases on a separate track from the statewide DLI process that produced the $11.87 figure for 2027, so workers there will continue to see a different number on their pay stubs than the state rate that applies everywhere else.
What happens between now and January 1
No further state action is required before the $11.87 rate takes effect; it is already set under the same annual review the department has used since consolidating the wage into a single statewide figure. The Department of Labor and Industry’s minimum-wage page is the same page employers and workers can expect to see updated again next year, when the next inflation adjustment is calculated.
The Part a Wage Notice Never Covers
Minnesota’s minimum-wage adjustment changes the number on a pay stub, not what happens if that same account gets frozen by a creditor or a bank error — a gap the state’s wage notice does not address.
The Bank Account & Debt Protection Kit includes the frozen-account response and a protected-funds and dispute log, for organizing what to do if an account is frozen and tracking how it gets resolved.
Compare the frozen-account response in The Bank Account & Debt Protection Kit.
This article was produced with AI assistance and reviewed by a human editor. Figures are linked to their primary sources.
