June 12, 2023
City employees are no longer subject to Minnesota’s compensation limits.
Since 1983, Minnesota Statutes, section 43A.17, subdivision 9 has restricted the total compensation (salary, deferred compensation and certain benefits not provided to a majority of other full-time employees) that can be provided to city, county, and other defined local government employees. Minnesota Session Laws 2023, Chapter 62, Article 3, Section 22, signed into law on May 24, 2023, repeals the law restricting total compensation effective May 25, 2023.
Until this year’s repeal, the law limited the compensation for an employee of a political subdivision to no more than 110% of the governor’s salary in 2005, adjusted annually by an inflation adjustment. For 2023, the limit was set at $206,939 per year, beginning January 2023. The compensation limit applied to employees of statutory and home rule charter cities, counties, town, metropolitan, and regional agencies, and other political subdivisions but did not apply to employees of school districts, hospitals, clinics, or health maintenance organizations owned by a governmental unit, or to medical doctors, doctors of osteopathy and most recently, employees of the Metropolitan Airports Commission.
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