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Overtime Basics

What are the state overtime requirements?

Employees covered by the overtime provisions of the Minnesota fair labor standards act must be paid at least one and one-half times their regular wage rate for any hours over 48 in a work week.

What are the federal overtime requirements?

Employees covered by the overtime provisions of the federal Fair Labor Standards Act (FLSA) must be paid at least one and one-half times their regular wage rate for any hours over 40 in a work week. Note the primary difference between the substance of the state and federal overtime laws, which is that employees covered by the federal law must be paid overtime (time and a half) for all hours over 40 in a work week, whereas employees covered only by the state law must be paid overtime only after 48 hours.

Under federal Department of Labor "Fair Pay" regulations that went into effect in 2004, workers earning less then $455 per week ($23,660 per year) are guaranteed overtime protection under federal law.

Does federal law or state law limit the absolute amount of overtime an employer can require?

Nothing in federal or state law limits the amount of overtime that can be required, as long as the employer pays the required wage. In the case of an individual employee, there could be factors such as the accommodation of a disability or discrimination against members of certain groups in the assignment of overtime that could be relevant, but generally, what overtime laws require is just the payment of the appropriate wage.

Are employees covered by the state law, the federal law, or both?

The federal law covers all employees of establishments that have at least $500,000 in gross receipts per year. Furthermore, any employee of an establishment that does not meet the $500,000 minimum is covered if that employee’s individual work involves transactions that in some way touch interstate commerce. The way these provisions are interpreted, most employees are covered by the federal law. For example, under interpretations used by the Department of Labor, any employee that conducts business with interstate telephone calls or the U.S. Mail may be covered by the federal statute, irrespective of the size of the employer.

The state law is broader and covers the great majority of employees in Minnesota who are not specifically exempt. Therefore, unless they fit into one of the specific exemptions, most people who work in Minnesota are covered by both the state and federal law.

What are the state and federal exemptions from coverage?

Many of the specific exemptions from overtime requirements are the same in federal and state law. Some exemptions are broad, such as the one that applies to executive, administrative, and professional employees, which appears in both state and federal law. Some are narrow, such as the federal exemption of employees who work at home making evergreen wreaths.

For more information about exemptions, see the U.S. Department of Labor web site for FairPay Fact Sheets by occupations and exemptions.

Can an employee be given compensatory time off instead of overtime pay?

Private-sector employees who are covered by the federal and state laws cannot be offered compensatory time off in lieu of overtime pay. There are, however, provisions in both state and federal law allowing many public employers to offer their employees "comp time" by agreement in some circumstances in lieu of overtime pay.

Must an employer pay an employee extra for Sunday or holiday work?

Neither state nor federal law requires employers to pay a higher rate to employees who work on Sundays or holidays. Again, provisions relating to these issues are generally matters of policy or agreement, rather than legal requirements.

Who enforces overtime laws?

Overtime laws are enforced by the Minnesota Department of Labor and Industry and the U.S. Department of Labor.

August 2014