1.1 	A bill for an act
1.2 	relating to employment; proposing an amendment to the
1.3 	Minnesota Constitution, article XIII, adjusting the
1.4 	minimum wage rate to account for annual inflation;
1.5 	amending Minnesota Statutes 2004, section 177.24,
1.6 	subdivision 1.
1.7 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.8 	Section 1. CONSTITUTIONAL AMENDMENT.
 1.9 	An amendment to the Minnesota Constitution is proposed to
1.10 	the people.  If the amendment is adopted, a new section shall be
1.11 	added to article XIII, to read:
1.12 	Sec. 13.  The minimum wage rates in Minnesota shall be
1.13 	adjusted each year on January 1 to account for inflation, as
1.14 	provided under Minnesota law.  The legislature may not enact a
1.15 	law that lowers a minimum wage rate or expands the definition of
1.16 	a small employer for minimum wage purposes.  However, the
1.17 	legislature may enact a law that raises a minimum wage rate or
1.18 	expands the definition of a large employer for minimum wage
1.19 	purposes.  If the legislature enacts a law that raises a minimum
1.20 	wage rate, that rate shall be used as the basis for the next
1.21 	annual adjustment to account for inflation.

1.22 	Sec. 2. QUESTION SUBMITTED TO VOTERS; SCHEDULE.
 1.23 	The proposed amendment shall be submitted to the people at
1.24 	the 2006 general election.  The question submitted shall be:
1.25 	"Shall the Minnesota Constitution be amended to provide for
1.26 	minimum wage rates that will be adjusted annually for inflation? 
2.1 	Yes .......
2.2 	                                   No ........" 

2.3 	Sec. 3. Minnesota Statutes 2004, section 177.24,
2.4 	subdivision 1, is amended to read:
2.5 		Subdivision 1.Amount.  (a) For purposes of this
2.6 	subdivision, the terms defined in this paragraph have the
2.7 	meanings given them.
2.8 	(1) "Large employer" means an enterprise whose annual gross
2.9 	volume of sales made or business done is not less than $500,000
2.10 	(exclusive of excise taxes at the retail level that are
2.11 	separately stated) and covered by the Minnesota Fair Labor
2.12 	Standards Act, sections 177.21 to 177.35.
2.13 	(2) "Small employer" means an enterprise whose annual gross
2.14 	volume of sales made or business done is less than $500,000
2.15 	(exclusive of excise taxes at the retail level that are
2.16 	separately stated) and covered by the Minnesota Fair Labor
2.17 	Standards Act, sections 177.21 to 177.35.
2.18 	(b) Except as otherwise provided in sections 177.21 to
2.19 	177.35, every large employer must pay each employee wages at a
2.20 	rate of at least $5.15 an hour beginning September 1, 1997.
2.21 	Every small employer must pay each employee at a rate of at
2.22 	least $4.90 an hour beginning January 1, 1998. Every employer
2.23 	must pay each employee at least the current adjusted minimum
2.24 	wage rate applicable to that employer, as calculated under
2.25 	paragraph (d), beginning January 1, 2008.
2.26 	(c) Notwithstanding paragraph (b), during the first 90
2.27 	consecutive days of employment, an employer may pay an employee
2.28 	under the age of 20 years a wage of $4.25 an hour. Beginning
2.29 	January 1, 2008, every employer paying an employee under this
2.30 	paragraph shall pay the employee the current adjusted wage rate,
2.31 	as calculated under paragraph (d).No employer may take any
2.32 	action to displace any employee, including a partial
2.33 	displacement through a reduction in hours, wages, or employment
2.34 	benefits, in order to hire an employee at the wage authorized in
2.35 	this paragraph.
2.36 	(d) No later than November 1 of each year, beginning in
3.1 	calendar year 2007, the commissioner shall calculate an
3.2 	adjustment of the wage rates specified in paragraphs (b) and (c)
3.3 	to account for the percentage increase in the rate of inflation
3.4 	during the most recent 12-month period for which data is
3.5 	available.  The commissioner shall determine the percentage
3.6 	increase in the rate of inflation by consulting the Consumer
3.7 	Price Index for all urban consumers, United States city average,
3.8 	as prepared by the United States Department of Labor.  The
3.9 	commissioner shall then increase the current minimum wage rates
3.10 	by the same percentage, rounding to the nearest cent.  Each
3.11 	adjustment to the minimum wage calculated under this paragraph
3.12 	takes effect on the following January 1.

3.13 	Sec. 4. EFFECTIVE DATE.
 3.14 	Section 3 is effective upon ratification of the amendment
3.15 	proposed in section 1.