Payroll and Benefits Guide United States – Minnesota

Employer

Employer Payroll Contributions

Employee

Employee Payroll Contributions

Employee

Employee Income Tax

General

Minnesota has a state minimum wage law which is based on the value of the gross volume of sales:

For 500,000USD or more, the state minimum wage is 10.59 USD

For 500,000USD or less, the state minimum wage is 8.63 USD

Payroll Cycle

In general, employees in Minnesota are paid either semi-monthly or monthly, with payments on set dates as stipulated in the employee contract.

13th Salary

There is no legislation for 13th-month payments in Minnesota.

General

In Minnesota, the standard working week is a maximum of 40 hours per week, 8 hours per day.

Overtime

Minnesota adheres to the Fair Labour Standards Act (FLSA), with overtime paid when employees work more than 40 hours in a single working week. The employer must pay 150% of the regular salary  for the extra hours worked. Similarly, if employees are scheduled to work on weekends or rest days, no additional payment is required.

However, should an Employer request an employee to work in exceptional circumstances on these days, then overtime will be payable at 150% of the regular salary rate for the extra hours worked.

The Wage and Hour Division (WHD) of the Department of Labour (DOL) is responsible for the administration and enforcement of the FLSA.

Working Week

Monday-Friday

Paid Time Off

Minnesota does not have any state statute governing the amount and payment of vacation time, however it is common for employers to offer paid vacation leave.  This must comply with employment law and be stipulated in the employment agreement or collective bargaining agreement.

Public Holidays

There are 11 official holidays, however private employers are not required to provide either time off or overtime pay on these days.

Sick Days

It is common for an employer to follow the Family and Medical Leave Act (FMLA), which provides certain employees with up to 12 weeks of unpaid, job-protected leave per year for specific family and medical reasons (maternity leave, serious illnesses, or if the employee needs to care for a spouse or child).

In addition, the Minnesota Paid Sick and Safe Leave Laws apply to all employers who work in Duluth with five or more employees. This includes employees who work for the employer but outside the city.  Employers are required to give 1 hour paid leave for every 50 hours worked, with a maximum of 64 hours for the year. Employees are allowed to use a maximum of 40 hours of paid sick leave per year.

All employers who work in Minneapolis with six and more employees must provide employees with paid leave of 1 hour for every 30 hours worked (up to a maximum of 48 hours for the year), and employers with less than five employees must provide leave. Still, they can choose whether they want to pay it or not.

In St. Paul, employers of employees who worked for them 80 hours or more within one year are required to give 1 hour for every 30 hours worked (maximum of 48 hours of paid sick leave per year)

Employees are eligible for FMLA if they have worked for their employer for at least one year, completed a minimum of 1,250 hours over the past year, and worked at a location where the company employs 50 or more employees within 75 miles.

FMLA eligible employees are entitled to:

• Twelve working weeks of leave in any one year for a child’s birth and to care for the newborn child within one year of birth.
• The employee may be entitled to leave for the adoption or foster care of a child and care for the newly placed child within one year of placement.
• To care for the employee’s spouse, child, or parent who has a severe health condition.
• A serious health condition that makes the employee unable to perform the essential functions of their job.
• any qualifying exigency arising out of the fact that the employee’s spouse, son, daughter, or parent is a covered military member on “covered active duty.”

OR

• Twenty-six working weeks of leave during a single one-year period to care for a covered servicemember with a serious injury or illness if the eligible employee is the service member’s spouse, son, daughter, parent, or next of kin (military caregiver leave).

In addition, there is the Minnesota Pregnancy & Parental Leave Act, which requires employers (with 21 or more employees) to provide their employees with 12 weeks of unpaid parental leave.  Employees must give adequate notice before the leave dates (at least 30 days).

The Minnesota Human Rights Act was also introduced to provide protection against discrimination-based sex, including pregnancy, childbirth, and disabilities related to pregnancy or childbirth.

Maternity Leave

See Sick Leave above.

In addition, there is the Minnesota Pregnancy & Parental Leave Act, which requires employers (with 21 or more employees) to provide their employees with 12 weeks of unpaid parental leave.  Employees must give adequate notice before the leave dates (at least 30 days).

The Minnesota Human Rights Act was also introduced to provide protection against discrimination-based sex, including pregnancy, childbirth, and disabilities related to pregnancy or childbirth.

Paternity Leave

See Sick Leave above.

Parental Leave

See Sick Leave above.

In addition, there is the Minnesota Pregnancy & Parental Leave Act, which requires employers (with 21 or more employees) to provide their employees with 12 weeks of unpaid parental leave.  Employees must give adequate notice before the leave dates (at least 30 days).

Other Leave

Minnesota law requires all employers to provide their full-time employees job-protected but unpaid leave for their duty as jurors or as a witness in a case, responding to a subpoena: or acting as a plaintiff or defendant in the courts. Employees must provide a copy of the jury summons to the employer as evidence of requirement.

In addition to the federal law USERRA, Minnesota law provides Protection against discrimination for members of U.S. armed forces, reserves, National Guard, commissioned corps of the Public Health Service, and any other category of persons designated by the president in a time of war or emergency.

Employers must grant up to one day of unpaid leave per calendar to an employee who is an immediate family member of a member of the U.S. armed forces that has been ordered to active service. The employer must grant ten working days of unpaid leave to an employee who is an immediate family member of a member of the U.S. armed forces that have been injured or killed while engaged in active service.

Minnesota law requires all employees registered to vote to take a reasonable amount of paid leave to vote in any municipal, county, state, or federal primary or general election. Employees must provide reasonable notice to their employers to take time off to vote.

Termination Process

Except in mass dismissals or as provided for in an employment contract or a collective bargaining agreement, U.S. law does not impose a formal “notice period” to terminate an individual employment relationship, and employment is stipulated “at will.”

This means that either the employer or the employee may end the employment relationship without giving either notice or reason, provided it is not illegal, notable discrimination on the grounds of a category protected by law, etc., and as per the Federal Worker Adjustment and Retraining Notification Act (WARN).

The employment contracts of executives and other highly skilled individuals often incorporate a “just cause termination” clause which mandates that the employer may only terminate the employee for “cause” and lists the permissible grounds. In such cases, the parties negotiate the foundations for a “just cause” termination case-by-case.

Notice Period

In Minnesota, most employees are employed “at-will,” and either party can terminate the employment relationship without notice. In Minnesota, pay out of unused vacation time is not required by law.

Still, generally, employers will pay an employee for unused vacation days, provided the employee gave some advanced notice of resignation; there is no official notice period. Still, in general practice, two weeks’ notice is a minimum requirement.

In mass dismissal cases the Worker Adjustment and Retraining Notification Act (WARN Act) must be followed, and employers must give 60 days’ notice to impacted employees.

Severance Pay

Except as otherwise provided in an employment contract or collective bargaining agreement, employers need not make severance payments to terminated employees. Employers who choose to offer severance would need to have the provisions within the employee’s contract and agreed by both parties, many employers choose to offer severance payment linked to the employee’s length of service.

Most common in Minnesota is one week pay for every year of service.

Probation Period

No legal provision governs a formal “trial /probation period.” However, it is common practice for employers to set a performance evaluation after an initially stated period of employment of 90 days.

VISA

Foreign nationals without permanent resident status or a work visa are not permitted to work in the United States. An employer seeking to hire a foreign national may file a petition with the United States Department of Homeland Security/ United States Citizenship and Immigration Services (“USCIS”) for an employment visa on behalf of the prospective employee.

If the petition is approved, the prospective employee must obtain a “visa stamp” from a United States embassy or consulate (Canadian citizens are exempt from this requirement).  To get a temporary U.S. work visa, an employer must file a petition with U.S. Citizenship and Immigration Services (USCIS). An approved petition must be part of the visa request; the types of visas include:

• H-1B – for applicants with a college degree hired to do specialised work. The visa is valid for three years and can be extended for an additional three years. The visa is connected to the employer that filed the petition. If there is a change of employer, the new employer must repeat the process. There are 65,000 H-1B visas available each year.
• H-1B1 – for applicants with a college degree from Chile and Singapore. The US government grants up to 1,400 visas to Chilean citizens and 5,400 from Singapore each year.
• H-2A – for temporary or seasonal agriculture work. It is limited to citizens of qualified countries. Usually valid for up to 1 year and can be extended to a maximum of 3 years.
• H-2B – for temporary non-agricultural work. These visas are limited to citizens of qualified countries. Usually valid for up to 1 year and can be extended to a maximum of 3 years.
• L – for intercompany transfers (people transferred from a foreign company to a US branch of the company.) The applicant must have been employed at the company for a year before the transfer and work in a managerial level position or higher with specialised knowledge.
• 0 – for people with extraordinary ability in science, arts, education, business, or athletics.

The standard procedure is to obtain a short-term work visa and then apply for an immigrant visa after the employee has started working in the United States.

For those seeking employment-based immigrant visas:

• E-1 – Highest priority employment for those with extraordinary ability in science, arts, education, business, and athletics.
• E-2 – for those with advanced degrees or exceptional ability.
• E-3 – for skilled workers and professionals, as well as unskilled workers.
• E-4 – Members of certain immigrant groups.
• E-5 – Immigrant investors in US companies (substantial investment)

Alternatively, an employer may sponsor a potential employee’s application for permanent resident status, referred to as a “green card,” if the employee can establish that the potential employee is a multinational executive/manager transferee, has unique skills, or has been offered a job in the United States.

The employer must have been unable to recruit a U.S. worker who meets the position’s minimum requirements.

All employers are obligated to verify that all individuals they employ are authorised to work in the United States.

General

Minnesota has a minimum combined 2023 Sales Tax Rate of 7.43% (State tax at 6.88% and Local tax at 0.55% USD)