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January 2020
Exemptions from overtime, minimum wage
Consider state and federal exemption requirements
Most Minnesota employers are subject to both federal and state wage and hour laws. Because both the federal Fair Labor Standards Act and the Minnesota Fair Labor Standards Act (MFLSA) allow certain workers to be exempt from minimum wage and overtime laws, employers must review both laws to ensure compliance. It is important to note that paying an employee a salary or using a certain job title does not make a worker exempt from overtime and minimum wage requirements.
Minnesota Fair Labor Standards Act worker exemptions
The Minnesota Fair Labor Standards Act contains exemptions for more than 20 types of workers. Exempt worker types include:
- 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 agriculture workers;
- outside salespersons; and
- executive, administrative and professional employees.
Salaries and exceptions to the salary guarantee
An exempt workers' salary must be a guaranteed predetermined weekly wage. If an exempt salaried employee misses an entire workday, the employer may deduct a proportional amount of that employees' salary (example: one-fifth of the weekly salary for workers who work a five-day workweek).
The federal exempt salary amount was increased to $684 a week Jan. 1, 2020. Additionally, while federal law allows some additional partial-day salary deductions for missed work hours due to FMLA leave, illness or disability, Minnesota law does not allow these same salary deductions.
Executive, administrative and professional exemptions
Positions designated under one of these common exemptions must be paid a minimum salary and meet certain duties requirements. The duties tests and salary amounts can be found in Minnesota Rules 5200.0180 -- Executive, administrative and professional personnel and:
Reminder: Check federal law to ensure compliance those requirements at well at www.dol.gov/agencies/whd/flsa.
Computer and highly compensated employee exemptions
Federal exemptions exist for “computer” and “highly compensated” workers, but similar exemptions do not exist under Minnesota law. Workers who qualify for one of these federal exemptions must also qualify for an MFLSA exemption for that worker not to be subject to Minnesota minimum wage and overtime requirements.
Include exemption basis on the employee notice
Minnesota's employee notice law requires employers to state on the employee notice 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 (example: executive exemption).
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