Minnesota Minimum Wage 2026: What Employers Owe

The Minnesota minimum wage in 2026 is $11.41 per hour, above the federal minimum wage of $7.25, according to the U.S. Department of Labor.

Minnesota's rate moves annually, and 2026 brings a new statewide paid leave program on top of the existing earned sick and safe time law. Employers running payroll in Minnesota need to track both.

Minnesota Minimum Wage vs. Federal Minimum Wage

Employers should not assume the $11.41 figure carries into 2027 unchanged. Because Minnesota recalculates the rate on a statutory formula rather than through periodic legislative action, the update can happen quietly relative to states where a wage increase is a headline news event. Building an annual rate-check into your payroll calendar, rather than relying on catching a news story, is the more reliable approach.

Overtime Rules in Minnesota

Minnesota's state overtime standard triggers at weekly over 48 hours, different from the federal 40-hour threshold. Employers in Minnesota must apply whichever rule, state or federal, is more generous to the employee, which in practice usually means overtime kicks in after 40 hours under the federal FLSA.

This dual-standard structure is a common point of confusion. Because the state standard alone would allow eight more hours before overtime applies, employers sometimes mistakenly configure payroll systems to the 48-hour state threshold instead of the more protective 40-hour federal threshold. The correct approach is to apply the federal 40-hour rule for virtually all Minnesota nonexempt employees, reserving the state's 48-hour standard only for the narrow circumstances where federal FLSA coverage does not apply.

Paid Sick and Safe Time, Plus a New Paid Leave Program

Minnesota requires earned sick and safe time statewide. On top of that, a state paid leave program is launching in 2026, adding a new layer of payroll contributions and administration. Employers need both programs configured correctly and should not assume the existing sick and safe time law covers the new paid leave requirements.

These are two distinct obligations with different funding structures. Earned sick and safe time is typically an employer-administered accrual benefit tied to hours worked. The new paid leave program functions more like a payroll tax, with contributions calculated, withheld, and remitted to the state on a defined schedule. Employers that treat the new paid leave program as simply an extension of existing sick and safe time policy risk missing the contribution and remittance requirements entirely, since those obligations exist independent of whatever sick leave policy the employer already has in place.

Tipped Wages and Local Ordinances

Minnesota tipped wage treatment and any local ordinances can differ by city and can change. Before running payroll for tipped employees or assuming no local minimum wage applies, verify current details through the U.S. DOL state labor office contacts directory.

Because Minnesota's wage rate itself resets annually, tipped wage calculations and any applicable tip credit rules should be re-verified at the same cadence rather than assumed to carry forward from the prior year without change.

What This Means for Payroll Compliance

An annually adjusted wage rate, a non-standard overtime trigger, and a brand-new paid leave program launching in the same year is a heavy compliance load for Minnesota employers to track manually. Getting the new paid leave program wired into payroll correctly from day one avoids costly corrections later.

Employers with a multi-state workforce face an added risk: applying Minnesota's 48-hour overtime concept to employees in other states, or vice versa, by mistake. Each state's overtime standard needs to be tracked and applied independently.

BEG runs payroll for Minnesota employers with current wage rates, correct overtime calculations, and both earned sick and safe time and the new paid leave program built into every run, all included in a single all-inclusive PEPM rate.

Frequently Asked Questions