Minnesota Overtime Laws: A Complete Guide

For workers across the nation, the federal Fair Labor Standards Act (FLSA) requires that employers pay fairly and count every hour of work properly. The FLSA also guarantees most employees overtime wages, at time-and-a-half, for the extra work they put in. But some states have instituted more “generous” wage and hour laws, regulations that entitle the majority of workers to higher wages for their labor. Minnesota is one of them.

Wage & Overtime Pay Laws In Minnesota

Minnesota law outlines different minimum wages, depending on the size of the business you work for.

Minimum Wage Laws

For workers at “small” employers, the state minimum wage for 2018 is $7.87, more than $0.50 higher than the federal minimum wage.

This wage also applies to all “youth” workers who are under the age of 18. Under Minnesota law, employees under 18 are currently entitled to $7.87 an hour, no matter how big their employer is. The same can be said of “trainees,” people who are just starting out in a new field. Large employers can start by paying trainees the lower minimum wage for their first 90 days on the job. After that, trainees become entitled to the general minimum wage for large employers.

Do I Work For A Large Employer?

Minnesota’s minimum wage changes for the majority of people who work at “large” employers.

While many sources define a business’ size based on the number of its employees, Minnesota doesn’t care about that. Size in Minnesota is based on how much money a business pulls in, its annual gross revenues:

Annual gross revenue – “raw” income, how much customers actually pay for goods and services, before taking out expenses.

If an employer makes $500,000 or more in annual gross revenues, they must pay workers at least $9.65 an hour. Again, employers who make less than $500,000 in annual gross revenues are required to pay workers at least $7.87 per hour.

For large employers, there’s no excuse for not paying workers covered by the state’s wage and hour law $9.65 an hour. When a state minimum wage is different from the FLSA’s minimum, the Act says employers have to pay covered workers the higher rate.

To learn more about large companies in Minnesota, check out this infosheet from the state’s Department of Labor & Industry.

Minnesota’s Minimum Wage Changes Every Year

We’ve already mentioned that the minimum wage rates set by Minnesota State law changed on January 1, 2018. They’re also likely to change in 2019, 2020 and every year after that. Since a 2014 law was passed, the State’s minimum wage has been pegged to inflation, the rate at which dollars lose their value because the prices of goods and services tend to increase year-on-year.

That means workers will have to be extra vigilant around the New Year. Pay careful attention to your paychecks (or cash if you’re paid off the books; wage and hour laws protect everyone, regardless of how you’re paid) in January. It’s your employer’s responsibility to stay on top of this change. If they fail to increase your hourly wage after January 1, 2018, they’re stealing from you.

To find the 6 most common wage and hour violations, click here.

No Tip Credits Allowed

For employees who regularly receive tips, some states allow employers to take a “tip credit,” essentially lowering their wage obligations below the minimum. The FLSA allows this, too.

Minnesota does not.

No matter how much you make in tips, all covered employers have to pay at least the applicable minimum wage. And unless you’re part of a valid tip pool, those tips are your property.

If a Minnesota employer is reducing your wage in light of how much you make in tips, you are the victim of wage theft and have every right to demand the money you’ve earned.

Minnesota Overtime Laws

Unlike the state’s minimum, Minnesota’s explicit overtime laws are not as “generous” as those enshrined in the FLSA. But again, since the more generous law takes precedence over the less generous one, more workers than not should be entitled to overtime pay at one-and-one-half their “regular rate” for hours worked over 40 in a week.

Employees in Minnesota who are not covered by the FLSA are entitled to overtime wages after working 48 hours in a workweek.

To learn if you’re job is covered by the FLSA, click here.

Who’s Not Covered By Minnesota’s Wage & Hour Laws?

Some employees are considered “exempt” from the state’s minimum wage and overtime employees. These workers are not entitled to the state’s wage and hour protections, and most won’t be covered by the FLSA, either.

Here’s a basic list of exempt workers:

• outside salespeople: Minnesota defines these employees as people who “conduct[…] no more than 20 percent of their work on the premise of the employer.”
• Salespeople, mechanics and auto parts sellers at car dealerships, but only employees who work on commission, or some other incentivized basis
• Some agricultural workers
• Some seasonal workers at carnivals, circuses, fairs and ski areas

For a more detailed look at employees who may be exempt under Minnesota’s Fair Labor Standards Act, take a look at Statute 177.23, subdivision 7.

But the vast majority of Minnesota’s workers are covered, either by the state’s specific laws, the FLSA or both.

Do You Deserve Back Pay?

Many workers are shocked to learn that they’re being underpaid. But they shouldn’t be.

Employers frequently break state and federal wage and hour laws, stealing money straight from their employees’ pockets. Whether intentional or not, wage and overtime violations are theft, plain and simple.

Contact the experienced Minnesota overtime attorneys at WageAdvocates.com to find out if you’re making all the money you’ve earned.