Paying Overtime – Minnesota Law

The Minnesota Fair Labor Standards Act requires employers to pay overtime for all hours worked over 48 per workweek, unless the employee is exempt under Minnesota Statutes 177.23, subdivision 7.

Overtime pay must be at least 1.5 times the employee’s regular rate of pay. This is calculated by dividing the total pay in any workweek by the total number of hours worked in that week.

Overtime is based on actual hours worked in a seven-day workweek, so holiday hours, vacation time, and sick leave are not counted.

Minnesota Fair Labor Standards Act (Minnesota Statutes 177.21 through 177.35)

Minimum Wage, Overtime Exemptions

Both federal and Minnesota wage and hour laws allow employers to make certain employees exempt from overtime and minimum wage requirements. Employers must follow both state and federal laws.

Types of Employees that May Be Designated as Exempt Under Minnesota Law

The Minnesota Fair Labor Standards Act, which includes workers’ rights to minimum wage, overtime, and other workplace protections, contains exemptions for more than 20 types of workers, including:

  • Nonprofit volunteers;
  • Elected officials;
  • Police and firefighters;
  • Seasonal fair, carnival, and ski facility workers (overtime exempt only);
  • Clergy working in schools, hospitals, or nonprofits operated by a church or religious order;
  • Certain agricultural workers, if paid on a salary basis;
  • Outside salespersons; and
  • Executive, administrative, and professional employees.

Executive, Administrative, and Professional Exemptions

Positions designated under one of these common exemptions must be paid a guaranteed and predetermined weekly salary and perform certain job duties to be exempt from Minnesota’s overtime law. Paying an employee a salary or using a certain job title, such as supervisor, does not make a worker exempt without meeting the “duties tests.”

The duties tests and salary amounts can be found in Minnesota Rules 5200.0180: Executive, Administrative, and Professional Personnel and:

Employee Notice Requirements

Minnesota’s employee notice law requires employers to provide certain information to employees in writing, including the basis for designating an employee as exempt. Employers can satisfy this requirement by citing the specific Minnesota law or rule that allows the exemption or by citing the type of exemption for which the employee qualifies, such as an executive exemption.

A Guide to Minnesota’s Overtime Laws

State Law

The Minnesota Fair Labor Standards Act requires all employers, regardless of gross annual revenue, to pay overtime for all hours worked in excess of 48 hours in a seven-day period.

Federal Law

The federal Fair Labor Standards Act requires some employers to pay overtime for all hours worked in excess of 40 hours in a seven-day period. These employers include:

  • businesses whose employees produce or handle goods for interstate commerce;
  • businesses with gross annual sales of more than $500,000;
  • certain other businesses, including hospitals, nursing homes, schools, and government agencies.

What is The Overtime Rate?

Overtime rates must be at least one-and-a-half times the employee’s regular rate of pay. The regular rate of pay is determined by dividing the employee’s total pay in any workweek by the total hours worked in the workweek. An employee’s pay includes credits allowed against the minimum wage for meals and/or lodging.

Who Must Pay?

Overtime pay is not discretionary. Both state and federal laws prohibit any agreement to not pay overtime to employees. All firms must pay Minnesota’s overtime wage regardless of:

  • the firm’s size, location, or gross sales;
  • the method of compensation (hourly, salary, commission, piece rate, or other); or
  • designations such as part-time, temporary, seasonal, or contract.

What is a Salary?

A salary is defined as a guaranteed, predetermined wage for each seven-day workweek that does not vary based on productivity or how many hours the employee works. It is not an hourly rate.

Who is Exempt?

Some employees are exempt from Minnesota’s overtime wages. The following is a partial list:

  • executive, administrative, or professional employees who meet the salary and duty requirements of the department’s rules;
  • an outside salesperson;
  • a salesperson, partsperson, or mechanic for a vehicle dealership who sells or services automobiles, trailers, trucks, or farm implements, and is paid on a commission or incentive basis, and is employed by a dealer selling to the consumer;
  • an agricultural worker paid a salary of at least $724.71 a week for large employers grossing $500,000 a year or more, or $590.94 a week for small employers grossing less than $500,000 a year.

How are The Hours Counted?

Except for rest periods of 20 minutes or more, all hours the employee is required to be on the premises of the employer or performing work-related tasks are counted for overtime purposes. Employees working more than one job under the control of the same employer must have all hours worked counted toward overtime. Holiday hours, vacation time, or sick leave are not counted in figuring overtime hours. Overtime is computed on a seven-day workweek basis regardless of the length of the pay period. Hours worked may not be averaged over the pay period or used to offset shorter workweeks. The workweek can be any consecutive seven-day period that the employer chooses, but may not vary once chosen.

View/print a flyer about Minnesota’s overtime law

Agricultural Workers Overtime Information

Agricultural Workers

Definition of Agriculture

Under Minnesota rule, “agriculture” means farming in all its branches and includes but is not limited to:

  • Dairying;
  • The field production, cultivation, growing, and harvesting of any agricultural or horticultural commodity; and
  • The raising of livestock, bees, fur-bearing animals, and poultry.

Agriculture also includes cleaning, processing, preserving, loading, and transporting to market or storage of a farmer’s own agriculture products, as well as repair, maintenance, and construction work that is connected to or incidental to agriculture operations.

Recruited Migrant Agricultural Workers in Minnesota

Recruited migrant agricultural workers are individuals at least 17 years of age who travel more than 100 miles to Minnesota from another state to work in agriculture based on an offer or the possibility of employment.

Required Employment Statement:

Under Minnesota law, at the time a migrant agricultural worker is recruited, the employer must provide a written employment statement in English and Spanish, or English and the worker’s preferred language. In the past, this employment statement was only required for migrant cannery workers, but now it is required for all recruited migrant agricultural workers.

Note: An employee wage notice, which is required for all employees in the state of Minnesota, must also be provided at the time of hire.

Seventy Hour-Pay Guarantee: Recruited Migrant Agricultural Workers’ Rights

Under Minnesota law, employers are required to pay recruited migrant agricultural workers at least every two weeks, except upon termination, when the employer must pay within three days. Recruited migrant agricultural workers are also guaranteed a minimum of 70 hours pay for work in any two successive weeks.

Overtime for Agricultural Workers

Under Minnesota law, agricultural workers are entitled to overtime pay except in limited circumstances. Agricultural employees in Minnesota must be paid overtime at the rate of time-and-a-half the employee’s regular rate of pay for all hours worked in excess of 48 hours in a workweek.

Agricultural workers are exempt from Minnesota overtime requirements if they are paid a salary greater than a certain minimum amount each week (see below). “Salary” is defined as a guaranteed predetermined wage for each workweek.

Provision Current Law
Large-employer salary $797.48 a week
Small-employer salary $650.48 a week

Minimum Wage for Agricultural Workers

Agricultural workers are entitled to the Minnesota minimum wage, which is higher than the federal minimum wage.

Youth in Agriculture

Minor agricultural workers ages 12 to 15 years old may work:

  • In agriculture if they have parental or guardian consent; and
  • More than eight hours in a day and more than 40 hours in a week only if they have parental or guardian consent.

These minors may not work during school hours on school days without an employment certificate.

Minor agricultural workers ages 16 and 17 years old are allowed to work in agriculture during school hours on school days.

More Information

Most people are familiar with basic overtime laws – if you work more than 40 hours in one work week, you are entitled to pay of time-and-a-half for all hours exceeding 40. People who work in management, professional, and other fields may be exempt from overtime requirements. Some employers will try to classify employees as exempt from overtime pay who are entitled to it, however. Employers may also argue that time preparing for work should not be included in overtime calculations. There are many situations where employees may be entitled to seek overtime pay:

  • Employee is incorrectly categorized as exempt from overtime pay. One example from the legal field is paralegals. Many law firms argued that they have the type of specialized training and duties that make them exempt from overtime pay. The Department of Labor has issued opinions that paralegals and legal assistants are not exempt from overtime pay, however. Incorrect classification is a common occurrence in other industries as well, such as mortgage and banking.
  • Employee did not have permission to work overtime. Generally, your employer cannot refuse to pay you overtime just because you did not have advance permission to complete the work.
  • Employee is salaried. Just because you are paid a salary rather than on an hourly basis, that does not mean you are exempt from overtime. It depends on the details of your work based on specific guidelines set by statute.
  • Employee is misclassified as an independent contractor. A true independent contractor is probably not entitled to overtime pay. Sometimes employers will call employees independent contractors to avoid overtime and other expenses, but the relationship is really one of employer/employee.
  • Employee is reclassified as non-exempt. If your employer changes your classification from exempt to non-exempt, you may be entitled to recover up to two years of overtime pay if you were misclassified as exempt.
  • Employee falls below the minimum salary. If you earn less than $455 per week, you are automatically entitled to overtime protection.
  • Employee is required to work off the clock. Often employees have to set up before beginning work or clean up after work. You are generally entitled to credit for that time as working time.
  • Many aspects of overtime laws and employee rights are governed by the Fair Labor Standards Act.

I can help you evaluate whether you have a claim for overtime wages. Keep in mind that there are strict time limits for filing a claim for overtime wages.

Video Transcript

Think about this. One missed hour on a timesheet, multiplied across dozens of employees over several years, can produce a lawsuit that threatens your entire company. Wage and hour claims are among the most expensive types of employment litigation. And the most common cause? The employer failed to track all hours worked by non-exempt staff.

I’m Aaron Hall, an attorney for business owners. Let’s walk through why tracking hours for non-exempt employees is so critical and what you can do to protect your business.

Under the Fair Labor Standards Act, employers are required to pay non-exempt employees for all hours worked, including overtime at 1 and 1/2 times the regular rate for anything over 40 hours in a work week. The key point here is that the burden of tracking those hours falls on the employer, not the employee. If there is a dispute and the employer cannot produce accurate records, courts will typically accept the employee’s estimate, even if that estimate is generous.

The financial consequences are real. An employer found in violation may owe back wages, an equal amount in liquidated damages, which effectively doubles the liability, plus the employee’s attorney fees. When these claims become collective actions, the numbers multiply quickly. A company with 50 non-exempt employees and a pattern of missed overtime could face six or seven figures in liability.

Before you can determine your timekeeping obligations, every position must be correctly classified as either exempt or non-exempt. Non-exempt employees are entitled to minimum wage and overtime protections, and the employer must track every hour they work. Exempt employees are excluded from overtime, but only if they meet specific criteria related to their job duties and salary level. Here’s where many employers make a costly mistake. Giving someone a salary or a managerial title does not make them exempt. The classification depends on the actual duties performed. If an employee is classified as exempt but does not genuinely meet the legal criteria, the employer may owe back pay for the entire period of misclassification.

One of the greatest risks is off-the-clock work, time that non-exempt employees spend performing job duties without recording those hours. If the employer knows or has reason to know that work is happening, those hours must be counted and compensated. Common examples include checking emails before a shift, completing paperwork after clocking out, taking work calls during lunch, and attending mandatory training that is not logged. A policy prohibiting off-the-clock work is helpful, but it does not eliminate liability on its own. The employer must also enforce the policy and maintain systems that capture all hours accurately.

Overtime must be calculated on a workweek basis. A workweek is a fixed period of 168 hours, or seven consecutive 24-hour days. You cannot average hours across two weeks. If someone works 50 hours one week and 30 the next, you owe 10 hours of overtime for that first week. The overtime rate is 1 and 1/2 times the regular rate of pay, which may include bonuses and commissions beyond the base hourly wage. Compensatory time off in place of overtime pay is generally not permitted for private sector employers.

Meal and rest breaks present another area of risk. Rest breaks of 20 minutes or less are generally compensable work time. Meal breaks of 30 minutes or more may be unpaid, but only if the employee is completely relieved of all duties. If a worker monitors a phone or stays at a workstation during a meal break, that time must be paid.

Remote work has added a new layer of complexity. When employees work from home, the risk of untracked hours increases. The employer’s legal obligation to track time does not change based on the employee’s physical location. For non-exempt remote staff, you should implement digital timekeeping tools, require logging of start times, end times, and breaks, establish clear expectations about availability, and prohibit work communications outside of logged hours.

The FLSA also imposes specific record-keeping requirements. Employers must maintain records of hours worked each day, total hours each work week, pay rates, overtime earnings, and wage deductions for at least 3 years. The Department of Labor may inspect these records at any time without advanced notice. Incomplete or missing records create a presumption against the employer.

What should you do? First, audit your employee classifications to confirm every exempt position meets the current duties and salary tests. Second, implement a reliable digital timekeeping system. Third, create and enforce a clear written policy prohibiting off-the-clock work. Fourth, train your managers. Supervisors are often the source of violations, whether by explicitly asking employees to work without clocking in or by implicitly rewarding those who do. Finally, conduct regular audits of timekeeping records to spot patterns that suggest unreported work.

I started by talking about how one missed hour multiplied across your workforce can turn into a massive liability. The single most important thing to remember is this. The law places the burden of accurate record-keeping on the employer, not the employee. Investing in the right systems and training now is far less costly than defending a wage and hour lawsuit later.

What we talked about today is not a replacement for an attorney. Instead, use what you learned to spot legal issues that you can discuss with your company’s attorney to avoid legal problems and strengthen your business. I’m Aaron Hall, attorney for business owners. Learn more at aaronhall.com.