Understanding your rights regarding overtime pay ensures you receive fair compensation for your hard work. In Minnesota, both state and federal laws govern overtime pay.
This guide will help you better understand Minnesota’s overtime and labor laws, identify eligibility, and outline the steps you should take if you believe you have overtime pay due.
In Minnesota, overtime pay occurs at 1.5 times the regular hourly rate for workers who exceed 48 hours in a week. Moreover, the state has two different minimum wage rates for employees, leading to varied overtime pay calculations:
For large employers (with revenue above $500,000), the minimum wage is $10.85, resulting in an overtime rate of $16.28 per hour.
For small employers (with revenue below $500,000), the minimum wage is $8.85, resulting in an overtime rate of $13.28 per hour.
Minnesota Overtime Rate and Calculation
In Minnesota, the overtime pay rate is one and a half times (1.5x) your regular hourly rate for any hours worked over 48 in a workweek. However, federal law applies for hours worked over 40 in a workweek.
To calculate your overtime pay, use the following formula: Overtime Pay = (Regular Hourly Rate) x 1.5 x (Overtime Hours Worked)
Example: If your regular hourly rate is $15, and you worked 50 hours in a week, your overtime pay would be calculated as follows:
Regular Pay for 40 hours = 40 x $15 = $600
Overtime Pay for 10 hours (federal law) = 10 x ($15 x 1.5) = 10 x $22.50 = $225
Total Pay for the week = $600 + $225 = $825
Who Is Entitled to Overtime Pay?
Most employees in Minnesota qualify for overtime pay under both state and federal laws.
Here’s a breakdown of overtime eligibility:
Hourly Employees: In Minnesota, hourly employees typically receive overtime pay for working beyond the standard 40-hour workweek under federal law and over 48 hours under state law.
Non-Exempt Salaried Employees: Salaried employees may qualify for overtime if they don’t meet the exemption criteria. Therefore, this applies to employees earning below a specific salary threshold or whose job duties don’t match the executive, administrative, or professional exemptions.
Exemptions and Exceptions
Certain employees are exempt from overtime pay under Minnesota law. In addition, common exemptions include:
Executive, Administrative, and Professional Employees: These employees are exempt if they meet the salary and duties tests as defined by law. Therefore, must receive a salary of at least $684 per week.
Outside Sales Employees: Employees primarily engaged in sales work outside the employer’s place of business.
Specific Industry Workers: Certain industries, such as agriculture, seasonal amusement or recreational establishments, and specific transportation jobs, have exemptions under state law.
Tests to Determine Employment Type
To determine if a salaried employee is exempt from overtime, Minnesota uses specific tests based on both state and federal guidelines:
Salary Basis Test: You must be paid a fixed salary that does not fluctuate based on the number of hours worked.
Salary Level Test: Your salary must meet a minimum threshold set by law.
Duties Test: Your job duties must primarily involve executive, administrative, or professional tasks as defined by the law.
Overtime Pay for Tipped Employees in Minnesota
In Minnesota, employees who regularly earn more than $30 in tips each month qualify as tipped employees.
Tipped employees in Minnesota follow the state’s minimum wage laws.
As of 2023, the minimum wage in Minnesota varies depending on the employer’s size:
Large employers (annual gross sales of $500,000 or more): $10.33 per hour
Small employers (annual gross sales of less than $500,000): $8.42 per hour
However, employers are allowed to pay tipped employees a lower direct cash wage, which must still comply with minimum wage laws.
Tip Credit
Employers can apply for a tip credit against the minimum wage for tipped employees. Therefore, the tip credit is the difference between the state minimum wage and the direct cash wage paid to the tipped employee. Additionally, the employer uses the employee’s tips to make up the difference between the tipped minimum wage and the standard minimum wage.
Legal Requirements
According to the Fair Labor Standards Act (FLSA), employers can take a tip credit toward their minimum wage and overtime obligations for tipped employees, as specified in Section 3(m)(2)(A).
Therefore, employers who claim a tip credit must ensure that the employee’s total earnings from tips and direct cash wages equal at least the state minimum wage for all hours worked in a workweek.
In addition, if the combined total falls short, the employer must make up the difference to meet the minimum wage requirement.
Overtime for Tipped Employees
Tipped employees qualify for overtime pay at one and a half times their regular rate for any hours worked over 40 in a workweek. Remember, the calculation for overtime pay must include both the direct cash wage and the tips received to ensure compliance with the law.
Example Calculation: Assume a tipped employee works 50 hours a week and receives a direct cash wage plus tips. In Minnesota, the tipped minimum wage is $8.42 per hour.
Step 1: Calculate Regular Gross Pay
Regular Gross Pay = Tipped Wage x Hours Worked
Tipped Wage (direct cash wage) in Minnesota: $8.42
Hours Worked: 50
Regular Gross Pay = $8.42 x 50 = $421
Step 2: Calculate Overtime Pay
Overtime Pay = Tipped Overtime Wage x Overtime Hours Worked
Overtime Wage is typically calculated at 1.5 times the tipped minimum wage:
Overtime Wage = $8.42 x 1.5 = $12.63
Overtime Hours Worked: 10 (hours over 40 in a workweek)
Overtime Pay = $12.63 x 10 = $126.30
Step 3: Calculate Total Gross Pay
Total Gross Pay = Regular Gross Pay + Overtime Pay
Total Gross Pay = $421 + $126.30 = $547.30 + tips
If the tips do not bring the employee’s earnings to at least the standard minimum wage ($10.33 per hour for large employers and $8.42 for small employers). Therefore, employers must make up the difference. Consequently, this ensures compliance with the minimum wage laws.
Ensuring Compliance
Employers must ensure that tipped employees receive at least the full minimum wage when combining their direct cash wages and tips. Also if a shortfall occurs, the employer must compensate for the difference.
Steps to Take if You Believe You Are Owed Back Overtime Pay
If you suspect your employer owes you back overtime pay, act promptly. Here are the steps you should take:
Document Your Hours
Maintain detailed records of all your work hours and any communications with your employer regarding overtime.
Review Your Job Classification
Ensure your job classification (exempt vs. non-exempt) is correct.
Contact Your Employer
Start by discussing your concerns with your employer or HR department.
File a Complaint
If your employer does not address the issue, file a complaint with the U.S. Department of Labor’s Wage and Hour Division or the Minnesota Department of Labor and Industry.
Consult an Attorney
For legal advice and to explore your options, consider consulting with an employment attorney specializing in wage and hour laws.
Statute of Limitations
In Minnesota, the statute of limitations for filing an overtime claim is generally two years from the date the wages were due. However, if the violation is deemed willful, the statute of limitations extends to three years.
Minnesota Labor Laws on Mandatory Overtime
Minnesota labor laws regarding mandatory overtime align with the federal FLSA. Employers in Minnesota can require employees to work overtime. Therefore, employers must compensate employees who work overtime at 1.5 times their regular hourly rate for hours worked beyond 40 in a workweek.
Certain employees are exempt from overtime pay: salaried professionals, executives, administrators, and some agricultural and seasonal workers.
Employers do not need to notify employees in advance about mandatory overtime. However, collective bargaining agreements may include specific provisions regarding overtime notice. Therefore, employers and employees must always follow these contractual terms.
Think You Have a Case? Contact Lemberg Law for Assistance
If you believe your employer has violated overtime laws and you are owed back pay, Lemberg Law can help. Our experienced legal team will evaluate your case for free. Call us at 475-277-2200 or complete our online form to get started.
About the Author:
Sergei Lemberg is an attorney focusing on consumer law, class actions related to automotive issues, and personal injury litigation. With nearly two decades of experience, his areas of practice include Lemon Law (vehicle defects), Debt Collection Harassment, TCPA (illegal robocalls and texts), Fair Credit Reporting Act, Overtime claims, Personal Injury cases, and Class Actions. He has consistently been recognized as the nation's "most active consumer attorney." In 2020, Mr. Lemberg represented Noah Duguid before the United States Supreme Court in the landmark case Duguid v. Facebook. He is also the author of "Defanging Debt Collectors," a guide that empowers consumers to fight back against debt collectors and prevail, as well as "Lemon Law 101: The Laws That Lemon Dealers Don't Want You to Know."
