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November 2019
Overtime laws in Minnesota
It’s that time of year again, and for many workers the holiday season brings an increase in work hours and questions about being paid for overtime hours.
Navigating state and federal overtime requirements
Employers are subject to both state and federal overtime requirements. Employers should carefully review the federal Fair Labor Standards Act to determine if they may be exempt from those requirements before concluding only state law applies.
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; and
- certain other businesses, including hospitals, nursing homes, schools and government agencies.
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. State law does allow employers to designate certain employees as exempt from overtime, based on job duties, salary requirements and other criteria. Information about exemptions can be found in the Minnesota Fair Labor Standards Act and Minnesota Rules 5200.
New federal salary threshold for exempt employees
Employers who are subject to federal overtime requirements should be aware that the minimum weekly salary for exempt employees is schedule to increase to $684 per week on January 1, 2020. See the US DOL's Final Rule website for more information.
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. There are some exclusions from wages employers can make when determining the regular rate.
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