Introduction to employment laws in Minnesota
Overview
Minnesota currently ranks near the top in worker protection and wage standards compared to other US states.
Employers navigating the employment landscape in Minnesota must familiarize themselves with its unique blend of federal, state, and local employment laws. In this guide, we’ll help you to stay compliant while hiring and manage employees in the state.
Employing in Minnesota: Key employment laws and practices
Standard work hours
Minnesota law does not define employees as full-time or part-time employees, but full-time employees in Minnesota typically work 40 hours per week. However, the exact number of hours may vary depending on the specific industry or collective bargaining agreements.
Self-employed individuals or independent contractors set their own work hours. However, it’s essential to classify such professionals correctly to avoid misclassification penalties under Minnesota HR compliance laws.
Minimum wage and overtime
Minnesota’s minimum wage rates vary based on the size of the employer. Large employers (those with annual gross revenue of $500,000 or more) must pay a minimum wage of $10.85 per hour, while small employers must pay a minimum wage of $8.85 per hour.
A training wage of $8.85 per hour applies to employees under 20 years old during their first 90 days of employment. The minimum wage is different in Minneapolis and in St. Paul, two major municipalities in the state.
For overtime, Minnesota law requires employers to pay employees one-and-one-half times their regular rate of pay for all hours worked over 48 in a workweek. This is in contrast to the majority of other states, where the overtime threshold is 40 per week. Certain exemptions apply for specific roles, such as retail or service employees paid on a commission basis and airline employees.
Insurance and benefits
Employers in Minnesota are required to provide certain benefits to their employees. These include health insurance, unemployment insurance, workers’ compensation, and family leave benefits.
Employers with two or more employees may qualify for continued health insurance coverage under Minnesota’s health care continuation requirements, which differ in ways from the federal Consolidated Omnibus Budget Reconciliation Act (COBRA).
There are also specific regulations around retirement benefits and 401k contributions. For example, employers who offer 401k plans are required by the Employee Retirement Income Security Act (ERISA) to meet certain fiduciary responsibilities.
Benefit type | Applicable law | Details |
Health insurance | Minnesota Health Care Continuation | Similar to COBRA; certain conditions apply |
Unemployment insurance | Minnesota Unemployment Insurance Law | Employers must pay taxes to fund unemployment benefits |
Workers’ compensation | Minnesota Workers’ Compensation Law | Provides benefits for work-related injuries and illnesses |
Family leave benefits | Minnesota Family and Medical Leave Act | Set to commence in 2026, provides job-protected leave for certain family and medical reasons |
Paid sick leave | Minnesota Sick Leave Law | Employers must provide paid sick leave to eligible employees |
Minimum wage | Minnesota Fair Labor Standards Act | Sets the minimum wage that employers must pay their employees |
Overtime pay | Minnesota Overtime Law | Requires overtime pay for hours worked over a certain threshold |
Child labor protections | Minnesota Child Labor Law | Regulates the employment of minors to ensure their safety and well-being |
Meal and rest periods
In Minnesota, employment laws mandate that employees who work for eight hours or more are entitled to sufficient time to eat a meal, typically lasting 30 minutes or more. This meal period is not required to be paid unless the employee is required to remain on duty on the premises or at a prescribed workplace.
Employees must be allowed adequate time to use the nearest restroom once every four consecutive hours worked. The law does not specify the length of the break, but it must be reasonable.
Employers that fail to provide these breaks may be subject to penalties under state law. It’s also important to note that these requirements apply to all Minnesota employers, regardless of their size or industry.
Multiplier makes it easy to manage benefits for Minnesota employees.
Anti-discrimination laws
In addition to federal anti-discrimination laws, Minnesota has established its own protections under the Minnesota Human Rights Act (MHRA). This legislation prohibits
employment discrimination based on protected characteristics such as race, color, creed, religion, national origin, sex
(including pregnancy, childbirth and related disabilities), marital status, status with regard to public assistance,
membership or activity in a local commission, disability, sexual orientation, age (18 and older), and familial status.
The MHRA applies to employers in Minnesota with one or more employees. It also protects employees from harassment and
retaliation. Employers must ensure their employment practices align with these regulations to avoid possible legal
consequences.
Leave policies
Minnesota employment laws have several provisions related to leave policies. Under Minnesota’s Pregnancy and
Parenting Leave Act, additionally, qualifying employers must provide eligible employees with up to 12 weeks of
unpaid leave for birth or adoption of a child, prenatal care, and incapacity due to pregnancy or childbirth.
Under the state’s Earned Sick and Safe Time law, employers are required
to offer paid sick leave for reasons such as illness or injury, domestic abuse or stalking, and inclement weather or
public emergency.
| Leave Type | Duration | Paid/Unpaid | Qualifying Reasons |
| Pregnancy and parenting leave | Up to 12 weeks | Unpaid | Birth or adoption of child, prenatal care, incapacity due to pregnancy or childbirth |
| Sick and safe time | Varies based on hours worked | Paid | Illness, injury, domestic abuse, inclement weather |
Termination laws
Termination of employment in Minnesota is governed by several laws. The state follows the “at-will” employment doctrine,
which allows employers to terminate employees for any non-discriminatory reason and without notice.
There are exceptions under federal and state law for unlawful discrimination, retaliation, and violation of written
contracts or collective bargaining agreements.
While Minnesota law does not require employers to provide severance pay upon termination, if an employer has a policy or
contract that promises severance pay, they must honor it.
Easily onboard employees in Minnesota?
Safety and health
Minnesota has comprehensive safety and health regulations to protect workers. The Minnesota Occupational Safety and Health Act (MNOSHA) requires employers to provide a workplace free from recognized hazards that could cause death or serious physical harm to employees.
The law covers industry-specific safety standards and mandates regular training for employees on these standards. Employers are also required to report workplace injuries and illnesses as per the guidelines laid out by MNOSHA.
Taxes in Minnesota
Employers in Minnesota bear certain tax responsibilities. They must withhold state income tax from employee wages and remit these taxes to the Minnesota Department of Revenue. Minnesota’s withholding tax rates range from 5.35% to 9.85%, depending on the employee’s income level. In addition to state taxes, employers must withhold federal income tax and contribute to Social Security and Medicare.
Tax type | Employer contribution | Employee contribution |
Federal income tax | Varies | Varies |
State income tax | As per MN withholding tables | 5.35% – 9.85% |
FICA (Social Security and Medicare) | 7.65% of employee wages | 7.65% of employee wages |
The state also imposes unemployment insurance tax on employers, which is used to fund unemployment benefits for workers who lose their jobs. The tax rate varies from 0.1% to high of 8.9%, depending on the organization’s experience rating.
Managing Minnesota employees with an Employer of Record (EOR)
Navigating the complex landscape of Minnesota employment laws can prove challenging. However, with Multiplier’s Employer of Record (EOR) solution, you can legally hire full-time employees in the state without setting up a U.S. entity. This allows your business to minimize legal risks and maintain HR compliance.
Our Global Payroll offering ensures you can pay your employees on-time, while handling local taxes, contributions, and withholdings seamlessly. The Multiplier all-in-one platform allows you to hire, onboard, pay, and manage your Minnesota-based employees from a single interface.
To see how Multiplier can streamline your HR processes and help you remain compliant with Minnesota employment laws, book a demo today.
FAQs
Minnesota has laws that provide greater protections to employees than federal law, including pregnancy accommodation rights, a higher minimum wage, health care continuation coverage obligations for smaller employers and bone marrow donation leave. Employers must comply with both federal and state law, in addition to applicable municipal law obligations impacting the employment relationship.
The MHRA prohibits discrimination on several bases including race, color, creed, religion, national origin, sex (including pregnancy, childbirth, and related disabilities), marital status, status with regard to public assistance, membership or activity in a local commission, disability, sexual orientation, age (18 and older), and familial status. The MHRA applies to all employers in Minnesota with one or more employees.
Minnesota has two minimum wage rates based on the size of the employer. Large employers, defined as those having annual gross sales over $500,000, must pay a minimum wage rate of $10.85 per hour, while small employers must pay a minimum wage rate of $8.85 per hour. A training wage of $8.85 per hour may be paid to employees under 18 years of age and during the first 90 days of employment for employees under 20 years of age. Additionally, the municipalities of Minneapolis and Saint Paul have local minimum wages that differ from the statewide regulation.
Employers are required to provide health care continuation, payment of wages, pay frequency, pay statements, wage notices and wage deductions. An employer may make deductions from employees’ wages that are required by federal or state law or that are expressly authorized in writing by the employee for specific items.
Under Minnesota law, non-exempt employees must be paid overtime at a rate of one and one-half times their regular rate of pay for all hours worked over 48 in a workweek. This is in addition to federal Fair Labor Standards Act (FLSA) requirements, which mandate overtime pay for hours worked over 40 in a workweek for non-exempt employees. Employers must comply with both state and federal overtime laws and apply the law most beneficial to the employee.
Under the Bullard-Plawecki Employee Right to Know Act, Michigan employers with four or more employees must allow their employees to inspect their personnel records at reasonable intervals and at a location reasonably near the employee’s place of employment.
