It is common for employees to work beyond their normal hours of work. However, according to Minnesota Labor Laws, employers are required to compensate employees for their overtime.
In Minnesota, you are entitled to time-and-a-half for every hour worked over 48 in a week.
This article will provide information to successfully navigate Minnesota’s overtime regulations, whether you’re an employer aiming for compliance or an employee defending your rights.
This article covers:
- Minnesota Overtime Rates
- Overtime Entitlement in Minnesota
- Mandatory Overtime in Minnesota
- Overtime for Tipped Employees in Minnesota
- Overtime for Salaried Employees in Minnesota
- Calculating Minnesota Overtime with Commission
- Overtime Exceptions and Exemptions in Minnesota
- Statute of Limitations For Unpaid Overtime Claims in Minnesota
- Retaliation for Reporting Overtime Violations in Minnesota
- Legal Cases Relating to Overtime Compensation in Minnesota
Overtime in Minnesota is set at 1.5 times the regular hourly rate for workers who exceed 48 hours a week. There are two different minimum wages for employees in Minnesota. This means that the minimum overtime wage will be calculated as follows:
- For large employers (revenue above $500,000) – The minimum wage is $10.85, which makes the overtime wage $16.28 per hour
- For smaller employers (revenue below $500,000) – The minimum wage is $8.85, which makes the overtime wage $13.28 per hour
According to Minnesota overtime laws, overtime pay is required for any non-exempt employees.
employees who earn below $684 a week ($35,568 yearly) and work in a non-exempt industry are entitled to overtime pay.
However, your overall eligibility for overtime pay will be based on what your job duties are as well as what type of business you are in.
Read more about Overtime Exceptions and Exemptions in Minnesota.
Employees in Minnesota have the authority to set work schedules for their employees and can determine the hours an employee works.
There are no restrictions that specify how much notice must be provided to the employee or the maximum number of hours that can be worked in a single shift.
Employees who refuse to work the hours that have been scheduled may be terminated.
A tipped employee in Minnesota is also entitled to overtime compensation. However, employers in Minnesota are not allowed to take a tip credit from their employee’s pay.
If a tipped employee works overtime hours, their wage will be calculated at a rate of 1.5 for each hour worked overtime.
Some salaried employees in Minnesota are entitled to overtime. A salaried employee is someone who receives a fixed amount of pay regardless of how many hours they work each week.
To determine their overtime rate, a salaried employee must divide their salary by the number of hours that salary compensates for to get their regular rate. Then, take the regular rate and multiply it by the overtime hours worked and the standard overtime rate of 1.5 per hour.
Overtime Rate for Salaried Employees = Normal rate x Overtime Hours x Overtime Rate (1.5)
Normal Rate = Salary / Hours Compensated
If an employee’s salary covers less than 48 (hours) in a workweek, their regular rate will be added for every subsequent hour working up to the 48. Only after 48 hours will time-and-a-half be counted.
If an employee’s salary covers 48 (hours) in a workweek, then time-and-a-half will be paid for any hours over 48.
Commission Workers’ Overtime Rate = Half of the normal rate
Normal rate = (total hours times hourly rate) plus the workweek equivalent of the bonus and/or commission, divided by the total hours in the workweek
This means that if you worked 55 hours in a week, your normal rate would be 55 hours multiplied by $10.85 (Minnesota minimum wage) which equals $596.75. Add that amount with a commission of let’s say $50 a week. The amount would then be $646.75. Divide that amount by the total of 55 hours worked in the week.
That would be $11.76 which will then be halved ($5.88) to get the hourly overtime rate for commissioned employees.
The amount will vary depending on the hourly rate, hours worked, and commission earned.
Under federal law, certain employees and professions in most US states are exempt from receiving overtime pay. These include:
- Highly compensated employees earning over $107,432 annually
- Executive and administrative employees earning at least $684 per week
- Professional employees like artists, researchers, scientists, and skilled computer professionals
- Outside salespeople
- Taxi drivers
- Seasonal employees
- Sugar beet hand laborers
- Agricultural technicians
According to Minnesota law, the statute of limitations for filing a complaint regarding overtime (or other unpaid wages) is 2 years.
For willful violations, the statute of limitations is 3 years.
According to the Minnesota Wage Theft Legislation, an employer is not allowed to retaliate against an employee for asserting their rights to overtime compensation. If an employee chooses to file a complaint or even tell their employer their intentions to file a complaint, they cannot be punished or terminated.
Any employer who violates this law is liable for a penalty of not less than $700 and not more than $3,000 per violation.
Below, we present law cases relating to fair overtime compensation for employees in Minnesota:
1. Court Argument Between Employee and Employer Differ Regarding Overtime Eligibility
In the case of Grage v. Northern States Power Co., Veronica Grage filed a lawsuit against her employer, Northern States Power Company-Minnesota (NSP), for allegedly violating the Fair Labor Standards Act (FLSA). Grage claimed that NSP failed to provide her with overtime compensation.
Grage had worked for NSP as a supervisor for their service center. Due to that, NSP had classified her as exempt from overtime pay under the administrative exemption of the FLSA. Grage argued that her main duty was to schedule and dispatch NSP’s work crews, but NSP mentioned that her duties involved developing and managing daily work plans, assigning tasks, and overseeing NSP’s operations.
The initial ruling of the court was a summary judgment in favor of the plaintiff. However, the appellate court decided that there were significant differences in Grage’s job description as provided by both Grage and NSP.
Therefore, the appellate court reversed the initial ruling that granted summary judgment in favor of Grage. The case was remanded. The ultimate ruling is undetermined.
Key lessons from this case:
- An administrative exemption applies to employees whose duties are in the office or non-manual work that is directly related to the management or general operation of the company.
- The employer must provide enough evidence to show that their employee is exempt if they refuse to pay overtime.
- A court’s ruling can be reversed if one side of the party chooses to appeal the case.
2. Attorney General Investigates Complaint Regarding Unpaid Overtime Wages
In the case of Madison Equities v. Office of Atty. Gen., The Minnesota Attorney General had received complaints from security guards who were employed by Madison Equities (real estate developer). The guards had claimed that they were not being paid overtime wages as Madison Equities used different subsidiaries to issue their paychecks.
The Attorney General sent a request to Madison Equities, asking for their payment practices, properties, and the wages of the security guards. Madison Equities refused to provide the requested information and asked the court to stop the investigations.
The district court denied Madison Equities’ request and ordered them to comply with the Attorney General’s request. Still refusing to comply, Madison Equities appealed this decision, having the court of appeals partially agree with them.
The case was then taken to the Minnesota Supreme Court and Madison Equities was once again ordered to comply with the Attorney General’s demand.
The final ruling of the overtime wage case for the guards is undetermined.
Key lessons from this case:
- The Minnesota Attorney General has the authority to investigate allegations of wage violations and enforce compliance with wage and hour laws, including overtime provisions.
- Employers are required to cooperate with investigations conducted by the Attorney General’s office.
- The Attorney General can order employers to provide information and clarify the scope of investigations when necessary.
3. Subcontractor Held Equally Responsible for a Worker’s Overtime Back Wages
In the case of Padilla v. Caliper Building System, LLC., Gilbert Padilla filed a lawsuit against Caliper Building System (Caliper) and his direct employer, JMC Contracting (JMC), for violating labor laws. Caliper was a subcontractor for construction projects and hired laborers, such as Padilla, through JMC.
Padilla claimed to have often worked more than 50 hours per week but was only paid the regular hourly rate. Padilla also claimed that Caliper controlled his work and kept employment records. At work, Caliper had significant control over workers. Padilla claimed that Caliper’s foremen inspected their work, gave instructions, and even provided materials for work. That being said, Padilla’s direct employer, JMC, had set the same pay rate for all workers and did not provide overtime pay.
Padilla argued that Caliper should also be held responsible as a joint employer. Caliper tried to dismiss this case, but the court disagreed, stating that Padilla’s allegations were believable.
Caliper’s motion to dismiss the case was denied by the court.
Key lessons from this case:
- If two entities qualify as “employers” of the same employee and share responsibility for the employee’s working hours, they can be held jointly liable for overtime wages.
- Employers should be aware of their obligations and responsibilities when utilizing subcontractors or working with other entities.
- The control an employer has can be a determining factor in establishing an employment relationship and potential liability.
Learn more about Minnesota Labor Laws through our detailed guide.
Important Cautionary Note
When making this article we have tried to make it accurate but we do not give any guarantee that the information provided is correct or up-to-date. We therefore strongly advise you seek advice from qualified professionals before acting on any information provided in this article. We do not accept any liability for any damages or risks incurred for use of this article.