Employer of Record · Minnesota
Minnesota is home to Target, Best Buy, 3M, UnitedHealth Group, and US Bancorp - and its employment laws reflect that sophistication. The state banned non-compete agreements entirely in 2023, enacted a statewide paid sick leave mandate in 2024, and Minneapolis maintains its own wage floor above the state rate. WorkGenius becomes your legal employer and manages every Minnesota obligation from day one.
Facts reviewed against primary sources in September 2026
| Requirement | Minnesota | Detail |
|---|---|---|
| Minimum wage (large employers) | $11.41/hr | Single statewide rate since January 1, 2025 - the large and small employer tiers were eliminated. $11.41 from January 1, 2026; the 90-day training wage for workers under 20 is $9.31. Minneapolis is $16.37/hr and St. Paul reaches $16.37 for macro and large employers |
| State income tax (top rate) | 9.85% | Graduated state income tax with a top marginal rate of 9.85% - one of the highest in the US |
| ESST mandate | Required | Earned Sick and Safe Time: 1 hour accrued per 30 hours worked, up to 48 hours per year - effective January 1, 2024 |
| Final paycheck (termination) | Immediate | Final pay is due immediately on demand if the employee is discharged. On resignation it is due on the next regularly scheduled payday, and if that payday falls less than five calendar days after the last day worked the employer may wait until the second payday, but never more than 20 calendar days |
| Non-compete agreements | Banned | Minn. Stat. 181.988 voids any non-compete contained in a contract entered into on or after July 1, 2023. Agreements signed before that date remain governed by prior common law |
| MHRA coverage threshold | 1+ employee | The Minnesota Human Rights Act applies to employers with just one employee - one of the broadest anti-discrimination thresholds in the country |
The Defining Law
On July 1, 2023, Minnesota became one of only a handful of states to ban non-compete agreements for employees entirely. Under Minnesota Statutes 181.988, any covenant not to compete contained in a contract or agreement entered into on or after that date is void and unenforceable - regardless of how it is drafted, what consideration is offered, or how narrowly the restriction is scoped. Agreements signed before July 1, 2023 are unaffected and remain governed by prior Minnesota common law. For companies in the Twin Cities tech, healthcare, and professional services sectors, this fundamentally changes how intellectual property and competitive advantage must be protected.
Get Minnesota-Compliant TodayKey Requirements
Minnesota Coverage
Minnesota's ESST mandate, non-compete ban, immediate final pay requirement, and Minneapolis local wage floor create four distinct compliance layers that must be managed simultaneously.
WorkGenius tracks Earned Sick and Safe Time accrual for every Minnesota employee - 1 hour per 30 hours worked, up to 48 hours per year. Balances are maintained in real time, carryover rules are applied correctly, and employee ESST usage is recorded and reported as required.
Minnesota requires workers' compensation coverage for employers with one or more employees. WorkGenius obtains and maintains coverage through Minnesota's competitive private insurance market, ensuring every employee is covered from their first day of work.
The Minnesota Payment of Wages Act governs pay frequency, wage deductions, and final pay timing. WorkGenius manages all payroll obligations - including the immediate-upon-demand final pay requirement for terminated employees and the 5-day rule for resignations.
Minnesota SUTA contributions calculated and remitted on every payroll cycle. For 2026 the taxable wage base is $44,000 per employee, new employers are assigned a rate based on their industry rather than a flat rate, and every employer also pays the 0.40% base tax plus the 14.00% additional assessment. WorkGenius registers, files, and remits all contributions on your behalf.
The MHRA applies to employers with just one employee and prohibits discrimination based on race, color, creed, religion, national origin, sex, marital status, status with regard to public assistance, disability, sexual orientation, and age. WorkGenius employment agreements and policies reflect all MHRA requirements.
ACA-compliant health coverage, 401(k), and disability insurance - enrolled and administered. At termination, WorkGenius handles final pay (immediate upon demand), COBRA administration, and ensures no prohibited non-compete language appears in any separation documentation.
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Most EOR providers flag Minnesota as a standard Midwest state. It is not. Minnesota's Earned Sick and Safe Time law (effective January 1, 2024), its statewide non-compete ban, and Minneapolis's local wage floor create three distinct compliance layers. WorkGenius tracks ESST accrual, applies the correct wage rate per work location, and ensures employment agreements comply with the non-compete ban - automatically, on every payroll cycle.
Minnesota combines strong employee protections with a major corporate base - compliance requirements are detailed and actively enforced.
From January 1, 2026, Minnesota employers must give a paid rest break of at least 15 minutes for every four consecutive hours worked, and an unpaid meal break of at least 30 minutes when an employee works six or more consecutive hours. The paid rest break is working time and a real cost input for hourly contingent labour. WorkGenius builds both into Minnesota scheduling and pay calculations.
Minn. Stat. 181.173 requires employers with 30 or more employees at one or more Minnesota sites to include a good-faith starting salary range in every job posting. Open-ended ranges are prohibited, and where a fixed rate applies it must be stated as such. WorkGenius publishes a compliant range on every Minnesota posting.
Minnesota Paid Leave went live on January 1, 2026, with premiums and benefits starting together. The premium is 0.88% of taxable wages for 2026 and 2027 (0.61% medical plus 0.27% family) on wages up to $185,000, and the employer may deduct up to half of it, 0.44%, from the employee. Employers with 30 or fewer employees in each quarter pay a reduced 0.66%. Employees get up to 12 weeks of medical leave and up to 12 weeks of family leave, capped at 20 weeks combined per year. WorkGenius registers, withholds and remits the premium and administers claims.
Effective January 1, 2024, all Minnesota employers must provide paid sick and safe leave to employees. Employees accrue 1 hour of ESST for every 30 hours worked, up to 48 hours per year. ESST can be used for the employee's own illness, a family member's illness, or absences related to domestic violence, sexual assault, or stalking. The 48 hours is the annual accrual cap; separately, Minn. Stat. 181.9446 caps the total accrued but unused balance at 80 hours. Unused balances carry over year to year, subject to the 48-hour cap unless the employer provides a higher limit.
Minnesota prohibits all post-employment non-compete agreements for employees entered into on or after July 1, 2023. The statute voids any covenant that restricts an employee from working for a competitor or starting a competing business after leaving employment. Companies must rely on confidentiality agreements, trade secret law, and non-solicitation provisions - not non-competes - to protect their competitive interests in Minnesota.
The Payment of Wages Act requires employers to establish regular paydays and pay all earned wages on those dates. Final pay upon involuntary termination is due immediately upon the employee's demand. For voluntary resignations, Minn. Stat. 181.14 makes wages due on the next regularly scheduled payday; if that payday is less than five calendar days after the last day worked, the employer may defer to the second regularly scheduled payday, but no more than 20 calendar days after the last day of work. Late or withheld wages can result in penalty wages equal to the employee's average daily earnings for each day of default, capped at 15 days.
The Minnesota Human Rights Act is one of the most expansive state anti-discrimination laws in the country. It covers employers with just one employee, prohibits a broader range of protected classes than federal law (including sexual orientation, marital status, and status with regard to public assistance), and is enforced by the Minnesota Department of Human Rights. WorkGenius ensures all employment practices, policies, and agreements are MHRA-compliant.
Simple Process
Once the offer is signed, your new hire is set up and payroll-ready within 24 hours.
Workers, roles, locations, and start dates. We tailor the setup to your needs.
Our AI runs every worker through Minnesota's classification and compliance rules. We prepare compliant contracts and payroll setup.
Onboarded with Minnesota-compliant contracts, benefits enrolled, payroll running from day one.
Payroll runs on Minnesota rules. Taxes filed. Compliance monitored. One weekly invoice.
No. Minnesota banned post-employment non-compete agreements for employees entered into on or after July 1, 2023 under Minnesota Statutes 181.988. Any non-compete signed on or after that date is void and unenforceable - regardless of how it is worded, what the employee was paid to sign it, or how narrowly it restricts competition. The ban applies to employees working in Minnesota even if the employer is based elsewhere. However, non-solicitation of clients, non-solicitation of employees, and confidentiality agreements remain enforceable. WorkGenius ensures no Minnesota employment agreement includes a prohibited clause.
Effective January 1, 2024, Minnesota requires all employers to provide paid Earned Sick and Safe Time to employees. Employees accrue 1 hour of ESST for every 30 hours worked, up to 48 hours per year. ESST can be used for personal illness, caring for a sick family member, or absences related to domestic violence or sexual assault. Unused ESST carries over to the next year, subject to the 48-hour annual cap unless a higher limit is provided. WorkGenius tracks accrual balances and administers ESST usage as part of the standard payroll cycle.
Minnesota eliminated the large and small employer tiers on January 1, 2025. There is now a single statewide minimum wage: $11.41/hr from January 1, 2026, adjusted annually for inflation. A 90-day training wage of $9.31/hr applies to workers under 20. Two cities set their own higher floors: Minneapolis is $16.37/hr from January 1, 2026, and St. Paul runs a tiered schedule where macro and large employers are at $16.37/hr, small employers reach it on July 1, 2026, and micro employers are at $14.25. WorkGenius applies the correct rate based on the employee's actual work location.
Minnesota's final pay rules are among the most employee-protective in the country. If an employee is fired, laid off, or involuntarily terminated, their final paycheck is due immediately upon the employee's demand - there is no grace period. If an employee resigns voluntarily, wages are due on the next regularly scheduled payday under Minn. Stat. 181.14. The five-day rule works the other way to how it is often described: if that payday falls less than five calendar days after the last day worked, the employer may defer payment to the second regularly scheduled payday, but never beyond 20 calendar days after the last day of work. Late payment can result in penalty wages equal to the employee's average daily earnings for each day the payment is delayed. WorkGenius processes final pay within the required timeframes on every termination.
Minnesota has one of the highest top marginal state income tax rates in the US at 9.85%. The rate is graduated, so not all income is taxed at the top rate, but high earners - common in Minneapolis's corporate and tech sectors - will see significant state withholding. This affects total compensation planning: a $150,000 salary in Minnesota carries a meaningfully higher state tax burden than the same salary in Texas or Florida. WorkGenius handles all federal and Minnesota state income tax withholding, ensuring accurate remittance to the Minnesota Department of Revenue on every pay cycle.
The Minnesota Human Rights Act (MHRA) is Minnesota's state anti-discrimination law, and it applies to any employer with one or more employees, among the broadest coverage thresholds in the country - several other states, including Michigan and Connecticut, use the same one-employee trigger. Federal anti-discrimination laws (Title VII, ADEA, ADA) typically require 15 or more employees before they apply. The MHRA also covers a broader set of protected classes than federal law, including sexual orientation, marital status, and status with regard to public assistance. For companies engaging even a single worker in Minnesota through an EOR, full MHRA compliance is required from day one. WorkGenius builds MHRA-compliant policies into every Minnesota employment relationship.
WorkGenius handles worker classification, Minnesota payroll, benefits, and every other compliance requirement so you don't have to. Get started today.
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