Minnesota has a two-tiered minimum wage. Large employers (with annual receipts of $625,000 or more) must pay workers $6.15 per hour. Small employers (with receipts of less than $625,000) must pay $5.25 per hour.
But many of those small employers must also comply with the federal Fair Labor Standards Act (have ), which requires paying a minimum wage of $5.85 per hour. Businesses that gross annual sales of more than $500,000 are subject to the FLSA. (Even if your business is smaller than this, it’s still likely you’re covered by the federal law. Contact your attorney to determine your status.)
Training wage: Minnesota employers may pay new employees under the age of 20 a training wage of $4.90 per hour during their first 90 days of employment. However, employers may not displace permanent or current workers with those earning the training wage.
Tipped employees: Unlike the FLSA and the laws in many other states, Minnesota employers may not use a tip credit. That means you must pay the minimum wage even to employees who receive tips.
Note: Under the FLSA, employers that claim a tip credit against their minimum-wage obligation must pay tipped employees a cash wage of at least $2.13 per hour. If an employee’s tips and cash wages don’t equal the minimum wage, the employer must make up the difference.
Like the minimum wage, Minnesota’s overtime regulations differ from the FLSA’s. If an employment situation falls within the jurisdiction of both state and federal law, an employer must comply with whichever law sets the higher standard.
Like the Minnesota , ’s law exempts executive, administrative, professional and outside sales personnel. However, computer specialists and highly compensated workers who meet the federal exemption may be entitled to overtime under Minnesota law.
While Minnesota law exempts fewer classes of workers from overtime, it does not require employers to pay overtime until workers have worked 48 hours in one week (compared to 40 hours per week under the FLSA).
To ensure overtime compliance, employers that fall within the jurisdiction of both state and federal law need to be familiar with both statutes and determine which provides the higher standard.
The Minnesota Department of Labor & Industry has developed a recommended analysis worksheet for employers to follow when determining whether employees are exempt or nonexempt from federal and state minimum-wage and .
To review the FLSA’s revised overtime regulations, go to www.dol.gov/fairpay.