Employment News

Overtime and Wage Law Changes Effective January 2020


Jan 24, 2020

January 24, 2020 – Minnesota employees and employers should be aware of new changes to federal overtime and state wage laws that went into effect this month. While employers want to remain in compliance, employees should be aware of their rights and be prepared to assert their rights in the event that they are being underpaid.

Here are a few specific changes that have gone into effect in the new year:

  • Federal Threshold for Overtime Pay Raised from $455 to $684 a week: As of January 1, employees earning $684 per week or less at an employer covered under the Federal Labor Standards Act (FLSA) are entitled to overtime pay. This is a $129 increase that the U.S. Department of Labor (DOL) estimates will make 1.3 million Americans eligible for overtime pay. The change updates the earnings threshold necessary to exempt executive, administrative and professional employees from the FLSA minimum wage and overtime pay requirements. In effect, any employee making $35,568 annually ($684 per week) or less is considered nonexempt and entitled to overtime pay. Conversely, employees earning more than $35,567 per year may be exempt from overtime under the executive, administrative, professional, outside sales or computer professional duties tests. You should consult an attorney about whether you meet an exemption.
  • “Highly Compensated Employee” Minimum Threshold Raised to $107,432: In addition, the DOL has raised the total annual compensation requirement for “highly compensated employees” from $100,000 per year to $107,432 per year. A highly compensated employee may be considered exempt from overtime if they meet this compensation threshold, their primary duties involve office or non-manual work and they regularly perform duties in one or more of the exempt duties of an executive, administrative or professional employee.
  • Regular Rate of Pay for Overtime Calculation Under FLSA Updated: As of January 15, a revised rule by the DOL went into effect clarifying which perks and benefits must be included in an employee’s rate of pay when calculating overtime for nonexempt employees, as well as perks and benefits that may be provided without inclusion in the regular rage of pay. Under the new rule, employers may now exclude: the cost of providing certain parking benefits, wellness programs, gym access, and certain tuition benefits; payments for unused paid leave; reimbursed expenses for cellphone plans, credentialing exam fees and organization membership dues; and certain sign-on bonuses and discretionary bonuses. This list is not exhaustive. More information about the DOJ rule changes can be found here.
  • Minnesota Minimum Wage Increased to $10 an hour ($8.15 for Small Employers): To adjust for rising inflation the minimum-wage rate in the state of Minnesota was raised to $10 an hour for large employers and $8.15 an hour for small businesses. Small employers have gross revenues of less than $500,000. The minimum wage is adjusted every year in accordance with Minnesota State Law to account for inflation. Youth minimum wages and training wages also both set at $8.15 an hour.

Are minimum wages different in St. Paul and Minneapolis?

Minnesotans generally enjoy higher minimum wages that the national average. Wages are also higher in Minneapolis and St. Paul than in Minnesota, generally.

Minneapolis has set the minimum wage at $12.25 for large employers (more than 100 employees) and $11.00 for small employers. This will continue to rise, with the next increase beginning on July 1, 2020 at $13.25 for large businesses and $11.75 for small businesses. By July 1, 2024, the minimum wage will be $15 for all employers.

In St. Paul, the minimum wage is set to increase to $11.50 for large employers (101-10,000 employees) and $10.00 for small businesses (6-100 employees) beginning on July 1, 2020. Micro-businesses (5 or fewer employees) will receive $9.25 an hour beginning July 1, 2020. These rates are also scheduled to rise yearly until the minimum wage reaches $15 across all employers by July 1, 2028. A schedule of showing the Minneapolis and St. Paul annual wage increases can be found on through the Minnesota Department of Labor.

Contact Our Experienced Wage and Overtime Claims Lawyers

Do you have questions about minimum wage requirements? Are you a resident of St. Paul or Minneapolis and have been denied overtime or you haven’t received a proper minimum wage? Are you owed unpaid overtime or a victim of wage theft? Our attorneys at Baillon Thome Jozwiak & Wanta LLP are highly experienced in handling wage and hourly claims on behalf of employees in Minneapolis, St. Paul and throughout Minnesota. We will review your claims, give you a clear assessment and help you protect your rights to wages and overtime. Contact us for a free case evaluation.


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