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- Minimum Wage Requirements: As of January 1, 2024, Minnesota mandates a minimum wage of $10.85 per hour for large employers and $8.85 per hour for small employers, with annual inflation adjustments.
- Overtime Pay: Employees are entitled to overtime pay at 1.5 times their regular hourly rate for hours worked over 48 in a workweek. Exemptions may apply based on job duties and employment type.
- Earned Sick and Safe Time (ESST): Effective January 1, 2024, employees earn one hour of paid ESST for every 30 hours worked, up to 48 hours per year. This leave can be used for illness, medical care, or safety-related issues.
Minnesota's payroll laws require compliance with both state and federal standards. Employers must withhold state income taxes, ranging from 5.35% to 9.85%, based on employee income. Employers are also responsible for unemployment insurance taxes, which range from 0.1% to 9.0%, depending on the employer's experience rating. Compliance with overtime regulations for work exceeding 48 hours per week and annual updates to minimum wage rates is mandatory. Employers must maintain accurate payroll records and ensure timely payment of wages to meet Minnesota's legal standards.
Access competitive benefits like health insurance and retirement plans, often at a lower cost through a PEO. Leverage its pooled volume for enterprise rates—resold to PEO customers, with no employment minimums in Minnesota.
- Health Insurance Continuation: Minnesota employers with fewer than 50 employees must comply with state continuation rules, similar to COBRA, allowing employees to maintain health coverage under specific conditions.
- Paid Family and Medical Leave: Beginning January 1, 2026, Minnesota will provide up to 12 weeks of paid leave for qualifying family or medical reasons, requiring adjustments to payroll systems for compliance.
- Pregnancy and Parental Leave: Effective August 1, 2024, the Pregnancy and Parenting Leave Law expands protections, including increased leave durations and broader eligibility criteria.
Check out our comprehensive state hiring guide.
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Understand employer tax implications and payroll requirements.
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Review state specific employment laws and regulations.
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Get insights on payroll, benefits, and employee classification.
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