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What are the overtime rules in Minnesota?

On Behalf of | Jan 12, 2021 | Employment Law |

Overtime can be a challenge as an employer. While your business has specific needs, overtime adds up quickly and can get expensive.

When your employees know they can count on you to pay overtime wages, they are more likely to agree to work extra hours. As an employer, you have important obligations to your employees to follow federal and state overtime rules.

Here is what you should know about the overtime rules in Minnesota:

Minnesota Overtime Laws

In some states, there is a maximum number of hours an employee can work before requiring overtime pay. Minnesota does not have a daily maximum of working hours.

Keep in mind that your employees can work more efficiently when they are well-rested than when they become exhausted. When you provide reasonable shifts and break periods, your employees will be more successful.

Employers are responsible for following both the Minnesota overtime rules and the federal Fair Labor Standard Act. The Minnesota Department of Labor maintains a summary of the applicable statutes and requirements here.

When does overtime start?

In Minnesota, an employee is not entitled to overtime pay if they do not work more than 48 hours in a seven-day work week. Overtime hours are based on actual hours worked in a seven-day workweek so holiday hours, vacation time and sick leave are not counted. Keep in mind that even though you, as the employer, can decide what seven-day period counts as a workweek, but your chosen days must be consistent week to week.

Some employers in Minnesota may be required to follow the more stringent requirements of the federal Fair Labor Standards Act which says that employees who work more than 40 hours in a seven-day work week are entitled to overtime pay. These employers include:

  • Employers that produce or handle goods for interstate commerce;
  • Businesses with gross annual sales of more than $500,000; and
  • Hospitals and nursing homes, private and public schools, federal, state and local government agencies.

It is important to know when you will need to begin calculating and paying your employees for overtime, so be sure to know whether you are required to being counting overtime hours at 40 or 48 hours in a seven-day work week.

Compensation for overtime

Overtime pay is not discretionary. Both Minnesota and Federal law prohibit any agreement to not pay overtime to employees. Employees must be compensated appropriately for overtime, even if you did not authorize extra hours. It is essential to discuss overtime with your employees so that they understand your policies and when overtime applies.

Employees are entitled to be paid time and a half for any overtime hours they work. In other words, they must be paid one-and-one-half times their regular rate of pay. The overtime rate can be calculated by dividing the total pay in any work week by the total numbers of hours worked in that week.

Some employees are exempt from Minnesota and Federal overtime wages these include, but are not limited to the following:

  • Executive, administrative or professional employees who meet the salary and duty requirements of the department’s rules;
  • An outside salesperson;
  • A salesperson, parts person 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; and
  • 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.

The failure to pay overtime wages in Minnesota can be considered wage theft and subject an employer to civil and criminal penalties. Therefore, it is important to ensure that all of your employees are properly classified and that you are properly tracking overtime.

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