Cash overtime and compensatory time • In the private sector , overtime generally must be paid in cash wages ; true “comp time” banking across pay periods is not permitted as a substitute for FLSA overtime, except under very narrow arrangements that still result in timely payment within the same pay period. • In the public sector , certain public employers may provide compensatory time off instead of cash, accruing at 1.5 hours of comp time for each overtime hour worked, subject to maximum accrual limits and detailed FLSA rules. Federal exemptions from overtime are discussed in your Exemptions section; this cross reference is appropriate and should remain. Minnesota overtime pay requirements (Minn. Stat. § 177.25) Under the Minnesota Fair Labor Standards Act, employers covered by the state law must pay non exempt employees time and one half their regular rate of pay for all hours worked over 48 in a workweek , unless a Minnesota specific exemption applies. • As under federal law, the workweek is a fixed, recurring 168 hour period, and each workweek stands on its own; hours may not be averaged over multiple weeks. • Minnesota overtime is owed only on hours actually worked ; paid but non working hours such as vacation, sick leave, and holidays are not counted toward the 48 hour threshold. Special Minnesota overtime rules • Hospitals and health care: Minn. Stat. § 177.25, subd. 2, contains special overtime provisions for hospitals and certain health care fields. Employers in these sectors should review that statute and DLI’s overtime guidance or consult counsel for details. • Prevailing wage projects: Under the Minnesota Prevailing Wage Law (Minn. Stat. § 177.41– .44), employees working on state funded construction projects must generally receive t ime and one half for all hours worked over eight in a day or 40 in a week , which is stricter than the general 48 hour state rule. Interaction of federal and state overtime When both federal and Minnesota overtime laws apply: • For most FLSA covered employees, overtime will be due after 40 hours in a workweek (federal standard), even though Minnesota’s general overtime trigger is 48 hours. • For employees not covered by the FLSA but covered by Minnesota law, overtime will be due after 48 hours in a workweek. • On prevailing wage projects or in other special contexts, daily or lower weekly thresholds may apply. Employers must apply whichever rule (federal, state, or project specific) is most protectiv e of the employee in each situation.
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