Minnesota
Make employment in Minnesota easy. Let us handle payroll, benefits, taxes, compliance, and even stock options for your team in Minnesota, all in one easy-to-use platform.
- Capital City
St Paul
- Currency
United States Dollar ($, USD)
- Population size
5,700,000
Facts & Stats
- Capital City
St Paul
- Currency
United States Dollar ($, USD)
- Population size
5,700,000
- VAT - standard rate
7% (Additional local taxes apply)
From the shores of Lake Superior to the vibrant Twin Cities of St Paul and Minneapolis, The North Star State boasts a rich tapestry of history, culture, and natural beauty.
With a thriving economy, diverse employment opportunities across multiple industries, and a high quality of life, Minnesota is an attractive destination for job seekers.
Grow your team in Minnesota with Remote
If you want to hire in Minnesota, you’ll need to own a legal entity there — or partner with a global employment solutions provider, like Remote.
We can employ top talent in Minnesota on your behalf and manage complex HR tasks such as onboarding, payroll, benefits, and taxes. You can also manage and pay your contractors in Minnesota through Remote.
Risks of misclassification
Minnesota, like many other countries, treats self-employed individuals or contractors and full-time employees differently. Misclassification of contractors in Minnesota may lead to fines and penalties for the offending company.
Employing in Minnesota
In Minnesota, workers’ rights are protected by numerous employment and labour laws, at both the state and federal level. As a result, employees enjoy protection from discrimination based on age, religion, sexual orientation, gender, and race.
Here are the key things you need to know about hiring in Minnesota.
Hours of work in Minnesota
Work and overtime laws in Minnesota are governed by the state’s Department of Labour and Industry.
What is considered full-time employment in Minnesota?
Full-time employment is generally considered to be 40 hours per week, although this is not enshrined in law.
Do pay employees get overtime in Minnesota?
Under the federal Fair Labour Standards Act, non-exempt employees are entitled to overtime pay of 1.5x their regular pay rate if they work more than 40 hours in a week.
Employees are generally (but not always) exempt from overtime if they:
Earn more than the specified state or federal exemption threshold
Perform a role with duties that are considered executive or managerial
Work in a certified or licensed profession, such as law, accounting, architecture, or engineering
In Minnesota, the pay threshold for exemption is currently $684 per week, which is the federal minimum.
Note that the federal pay threshold for exemption is currently being reviewed in the US.
Minimum wage in Minnesota
The minimum state wage for small business employees (i.e. companies with a gross annual revenue of $500,000 or less) is $8.85 per hour. For companies with gross annual revenue above $500,000, the minimum wage is $10.85 per hour.
Onboarding timeline in Minnesota
We can help you get your new employee started in Minnesota fast, with a minimum onboarding time (MOT) of just 2 working days. Note that the MOT is dependent upon registration with the local authorities, and begins after the employee has submitted all the required information on the Remote platform.
For non-citizens of the US, a work eligibility assessment may be required, and can add three extra days to the onboarding time. If a follow-up is needed, there may be additional delays.
Please note that payroll cut-off dates can impact the actual first day of employment. Remote’s payroll cut-off date is the 10th of the month, unless otherwise specified.
Payroll cycle in Minnesota
Under state law, employees must be paid at least once every 31 days.
For Remote customers, employee payments are made twice per month in equal instalments, payable in arrears. The first payment is made on the 15th of the month and the second payment is made on the final day of the month. If relevant, bonus payments, commissions, and expense reimbursements are included in the second payment of the cycle.
Competitive benefits package in Minnesota
Remote can help you craft a competitive benefits package to attract and retain the best global talent. Our benefits experts understand the trends, requirements, and expectations of the Minnesota labour market, allowing your employees to feel appreciated and thrive.
Our benefits packages in Minnesota usually include some or all of the following:
Pension / 401k retirement plan
Medical Insurance
Vision insurance
Health Saving Plan (HSA)
Long term disability insurance (LTD)
Dental insurance
Life insurance
Flexible Spending Account (FSA)
Are employers required to provide health insurance in Minnesota?
Under the federal Affordable Care Act, organisations with a headcount of 50 or more must offer statutory health insurance to their full-time employees.
Many employers also offer some level of supplemental health insurance. While this can lead to a relative rise in employment costs, it’s an essential benefit that ensures your people have access to routine care and are covered in the event of an emergency.
Because Remote is the employer of record (EOR), it’s important for us to offer the same core benefits to all employees to ensure fair and non-discriminatory hiring practices. This protects both your business and ours.
Note that we do not add a markup on any benefits premiums or administration costs.
Are employers required to offer 401k in Minnesota?
The state is currently in the process of mandating qualified savings plans for private sector employees.
Under this legislation, you will need to enrol your employees into the state-sponsored Minnesota Secure Choice Retirement Program (or another recognised retirement plan).
Note that this will only apply if your business:
Has five or more employees
Has been a registered business for at least 12 months
This program is set to go live in early 2025.
Taxes in Minnesota
Employment taxes and statutory fees affect both your payroll and your employees’ paychecks in Minnesota.
Note that your employees may be liable for additional local taxes in certain areas.
Employer taxes
Employment Tax | |
|---|---|
6% | Federal unemployment insurance tax (FUTA) (charged on the first $7,000 an employee earns per year) |
Up to 8.9% | State unemployment insurance tax (SUTA) |
6.2% | FICA (Social security) |
1.45% | FICA (Medicare) |
Employee taxes
Payroll Tax | |
|---|---|
10% to 37% | Federal income tax |
5.35% to 9.85% | State income tax |
6.2% | FICA (Social security) |
1.45% | FICA (Medicare) |
Types of leave
Holiday | In Minnesota, there is no state or federal law that requires employers to provide paid or unpaid holiday leave to their employees, although many organisations do. |
Sick leave | Under state law, employees based in St Paul, Minneapolis, and Duluth are entitled to paid sick leave, subject to the size of the business and the number of hours worked. Can an employer deny sick time in Minnesota? Under the federal Family and Medical Leave Act (FMLA), eligible employees are entitled to up to 12 weeks of unpaid sick leave per year, provided they: Have worked for the same employer for at least 12 months Work in a location where at least 50 people are employed by the company within a 75-mile radius |
Parental and maternity leave | Under both state and federal law, employees are entitled to up to 12 weeks of unpaid maternity or paternity leave. Some organisations opt to pay a reduced pay during this period. |
Bereavement leave | Employers are not legally required to provide bereavement leave to their employees, although most organisations offer unpaid leave. |
Jury duty | Employees must report for jury duty if summoned (unless exempt). Jurors are typically on call for two weeks. Do employers have to pay for jury duty in Minnesota? No. Private sector employers are not required to pay employees on jury service, but they must provide unpaid leave, and cannot penalise or terminate an employee on jury duty. Some employers provide paid leave. |
Military leave | Under state and federal law, employers must grant unpaid leave to employees who are members of the military or the National Guard for military duty or training. These employees have the right to take time off for their military obligations, and employers are prohibited from discriminating against them based on their military service. Under state law, employees who are direct family members of active military personnel are also entitled to one annual day of unpaid leave, as well as additional unpaid leave if the family member is injured or killed. |
Employment termination
Termination process
Like nearly all US states, Minnesota is an at-will state. This means both employers and employees can end the employment relationship without reason, provided it is legal.
Remote’s legal experts can help you navigate terminations to ensure employees are only let go fairly, negating any potential legal complications.
Notice period
Employers and employees are not required to provide notice of termination, unless otherwise stated in the employment contract.
Despite this, it's usually customary for employees to provide two weeks' notice when leaving an organisation.
Severance pay
Employers are not legally required to provide severance pay (unless it is stipulated in the employee's contract or in the company policy).
Employers are also not required to pay any accrued but unused holiday time or sick leave, unless stipulated in the employment agreement.
Probation periods
There is no requirement to provide a probation period for employees, although many companies implement internal probation policies. These policies typically involve a formal performance evaluation after a specified period, such as three or six months.