Wage and Hour Blog
 
Dolley Law LLC

Minnesota

Minnesota Wage and Hour Law

Wage and hour laws vary across the United States, but they have many similarities. Dolley Law attorneys travel the country representing clients in connection with wage and hour matters. Our lawyers have in-depth substantive knowledge of wage and hour laws and extensive experience representing clients before both federal and state courts. No matter the wage and hour issue you face, reach out to an attorney with Dolley to discuss the potential for legal representation.

Minnesota Minimum Wages

Minnesota has a higher minimum wage rate than that provided for by the Fair Labor Standards Act (“FLSA”). See 29 U.S.C. § 206(a)(1)(C); Minn. Stat. § 177.24(f). Currently, the federal minimum wage rate is $7.25 per hour, whereas the applicable minimum wage rate in Minnesota varies depending on the gross annual income of the employer. See Minn. Stat. § 177.24(a)(1)-(2).

Currently, as of January 1, 2020, for large employers who gross $500,000 or more in sales or business annually, employees must be paid a minimum rate of $10.00 per hour. See Minn. Stat. §§ 177.24(a)(1)-(2), 177.24(f). For small employers who gross less than $500,000 annually, the minimum wage is only $8.15 per hour. Id. Like many other states, the minimum wage rates in Minnesota are generally scheduled by law to be adjusted annually to accommodate for increased costs of living due to inflation. See Minn. Stat. § 177.24(f).

Minnesota law and the FLSA differ with respect to how employers may pay tipped employees. Unlike Minnesota law, the FLSA allows for employers to pay tipped employees less than the applicable minimum wage, prior to counting tips toward their compensation. See 29 C.F.R. § 516.28 (2019); Minn. Stat. § 177.24(2). Under the FLSA, employers can pay tipped employees $2.13 per hour so long as the employee receives a regular rate above the minimum wage when all tips are counted toward weekly compensation. See 29 C.F.R. § 516.28 (2019).

Minnesota, on the other hand, does not allow employers to take such a tip credit toward the hourly wage rates paid to tipped employees. See Minn. Stat. § 177.24. As a result, employers must pay tipped employees either $8.15 or $10 per hour, depending on the annual revenue of the employer. See Minn. Stat. § 177.24(a)(1)-(2).

Minnesota Overtime

Minnesota overtime law differs from the FLSA in some significant respects. See Minn. Stat. § 177.25(1); 29 U.S.C. § 207(a)(1). Under the FLSA (and the laws of most states with their own overtime laws), employers must pay non-exempt employees an overtime premium of one-and-one-half times the employee’s regular rate for each hour worked over 40 hours in any given workweek. See 29 U.S.C. § 207(a)(1). However, under Minnesota’s overtime law, the standard measure for determining overtime hours is not a 40-hour workweek, but rather a 48-hour workweek. See Minn. Stat. § 177.25(1).

Minnesota also has an exception to its general overtime law that is applicable to health care facilities. See Minn. Stat. § 177.25. The FLSA uses a fixed and regularly occurring seven-day workweek as the baseline for determining when overtime hours have been worked. See 29 C.F.R. § 778.105.

Under Minnesota law, however, employers who operate health care facilities may use a different baseline—that is, a 14-day work period—for determining overtime hours. See Minn. Stat. § 177.25. However, to take advantage of this different baseline, employers must first satisfy several conditions, including establishing an agreement with the employee on this pay structure in advance and paying overtime premium rates on all hours worked in excess of 8 hours in a workday and in excess of 80 hours in the 14-day period. Id.

Meal and Rest Breaks

Minnesota is one of few states that mandate meal and rest breaks for employees; however, Minnesota statutes themselves does not specify the precise length or duration of the breaks that need to be given. See Minn. Stat. §§ 177.253, 177.254. In terms of rest or work breaks, for every four consecutive hours worked by an employee, the employer must allow adequate time for the employee to use the restroom. See Minn. Stat. § 177.253(1). Regarding meal breaks, Minnesota law provides that employees who work eight or more consecutive hours must have “sufficient time” for an unpaid meal break. See Minn. Stat. § 177.254(1-2).

While Minnesota’s statutes do not dictate precise lengths or durations for these breaks, Minnesota regulations provide additional information to fill in the gaps. Per Minnesota regulation, meal breaks must be 30 minutes unless the employer can show a “special condition” where a shorter break is appropriate. See Minn. R. 5200.0120(4) (2018); Frank v. Gold’n Plump Poultry, Inc., No. 04-CV-1018(PJS/RLE), 2007 WL 2780504 at *9 (D. Minn. Sept. 24, 2007).

Independent Contractor Status

The applicability of minimum wage and overtime compensation laws depends upon whether a worker qualifies as an “employee.” See Minn. R. 5200.0221 (2018); 29 U.S.C. § 203(e)(1). Simply classifying a worker as an independent contractor does not mean a worker is not an “employee” under the law.

The distinction between an employee and an independent contractor relies on a multitude of factors that can vary depending on the jurisdiction and appropriate laws. Courts interpreting the FLSA have outlined criteria for determining the status of an employee through what has become known as the “economic realities test.” See, e.g., Karlson v. Action Process Serv. & Private Investigations, LLC, 860 F.3d 1089, 1092 (8th Cir. 2017). This test considers factors such as the degree of control exercised by the employer, the degree of opportunity for employee’s profit or loss, and the skill required to do the job. Id. at 1093.

Relatedly, the Minnesota Department of Labor and Industry has outlined a general test for determining independent contractor status which primarily focuses on who has the right to control the means and manner of performance. See Minn. R. 5224.0330(1) (2018); Hunter v. Crawford Door Sales, 501 N.W.2d 623, 624 (Minn. 1993).

Because the factors for determination of employment status can seem inconclusive, and thus can make classification decision-making difficult, Minnesota provides more specific rules regarding this issue. See Minn. R. 5224.0330 (2018). In Minnesota, factors such as the location of the work being done, amount of training required, and compliance with a supervisor’s instructions all get considered when determining who has the right to control performance. See Minn. R. 5224.0330 (2018).

Wage Payment

In Minnesota, employers must pay employees at least once every 31 days, on a regular schedule. See Minn. Stat. §181.101(a). Failure to make timely payments may result in employer liabilities. Id.

Potential Liabilities for Wage and Hour Violations

Violating state or federal wage and hour laws can have serious consequences. See Minn. Stat. §§ 177.27(8), (10); 29 U.S.C. § 216(b). Employers who violate Minnesota’s minimum wage and overtime laws may owe the employee for unpaid wages, liquidated damages equal to unpaid damages, and attorney’s fees. See Minn. Stat. §§ 177.27(8), (10). These are generally the same types of damages owed for FLSA violations. 29 U.S.C. § 216(b).

However, the FLSA allows for employers to present a defense to paying liquidated damages, even though it is a difficult defense to raise. See 29 U.S.C. § 260. Under the FLSA, if the employer can show it took both objectively and subjectively reasonable efforts to comply with the FLSA, a court has the discretion to deny or reduce liquidated damages. See Chao v. Barbecue Ventures, LCC, 547 F.3d 938, 941 (8th Cir. 2008). However, this defense is not available under Minnesota law, so prevailing employees always receive liquidated damages. See Bot v. Residential Services, Inc., No. C8-96-2545, 1997 WL 328029 at *5 (Minn. Ct. App., June 17, 1997).

Minnesota and federal law both restrict the amount of time an employee has to file a minimum wage or overtime claim. See 29 U.S.C. § 255(a); Minn. Stat. § 541.07(5). Both have a statute of limitations of two years which extends to three years if the employee can show that the employer willfully violated the statute. Id.

Contact Us

Our experience in wage and hour matters includes representing clients across the country. Our attorneys handle a wide gamut of legal services in the wage and hour context, from helping answer questions or concerns regarding state and federal wage and hour requirements to litigating disputes. If you are in or around Hennepin, Ramsey, Dakota, Anoka, Washington, St. Louis, Stearns, Olmsted, Scott, Wright, or Carver counties and need legal advice or guidance on a wage and hour matter, please feel free to contact our attorneys at 314-645-4100 or by email at kevin@dolleylaw.com to discuss potential legal representation.