North Dakota — Wage & Hour

North Dakota requires employers to pay employees a minimum wage of $7.25 per hour, effective July 24, 2009. The statute does not provide for automatic increases or cost-of-living adjustments.

Source: N.D.C.C. § 34-06-22

North Dakota requires overtime at 1.5 times the employee's regular rate of pay for time worked over 40 hours in any workweek (any consecutive seven-day period defined by the employer). Overtime is calculated on a weekly basis only; the state does not require daily overtime. Paid holidays, paid time off, and sick leave are not counted in computing overtime hours.

Source: N.D. Admin. Code § 46-02-07-02(4)

North Dakota requires employers to provide a minimum 30-minute meal break in any shift exceeding five hours, but only when two or more employees are on duty. When a single employee works alone during a shift, no meal break is required under state law, even if that shift exceeds five hours. This two-employee threshold is a distinctive feature of North Dakota's meal-period rule and applies regardless of industry.

Unpaid vs. paid meal periods. The 30-minute meal break may be unpaid only if the employee is completely relieved of all job duties during the entire meal period. An employee is not completely relieved—and the break must be paid—if the employee is required to perform any duties during the meal period, including answering phones, monitoring a desk, or waiting for deliveries. The complete-relief standard tracks federal FLSA principles for bona fide meal periods.

Waiver by agreement. Employees may waive their right to a meal period upon agreement with the employer. North Dakota law does not specify whether the waiver must be in writing, but employer best practice is to document any waiver arrangement to avoid later disputes over whether the break was properly waived or improperly denied.

Rest breaks (short breaks). North Dakota law does not require employers to provide short rest breaks—such as 10-minute or 15-minute "coffee breaks"—at any point during the workday. However, if an employer voluntarily offers such breaks, they must be paid and counted as hours worked. This rule applies to any break shorter than 30 minutes; the employer cannot treat a short break as unpaid time even if the employee is relieved of duties.

Coverage and exemptions. The meal-break rule is codified in N.D. Admin. Code § 46-02-07-02(5), part of the state's general minimum wage and work conditions order. The regulation does not carve out exemptions for specific industries, though certain categories of employment (such as agricultural workers, casual babysitters working fewer than 20 hours per week for fewer than three consecutive weeks, and nonprofit educational youth camp employees) are excluded from the minimum wage and overtime provisions of the broader order and may not be subject to the meal-period requirement. Employers relying on such exemptions should verify coverage under N.D. Admin. Code ch. 46-02-07.

North Dakota meal-break law does not specify the timing of the break within the shift, leaving scheduling decisions to the employer so long as the 30-minute minimum is provided when the shift exceeds five hours and two or more employees are on duty.

Source: N.D. Admin. Code § 46-02-07-02(5) Source: North Dakota Department of Labor – Wage and Hour FAQ

North Dakota permits employers to pay tipped employees a minimum cash wage of $4.86 per hour, effective July 24, 2009, by claiming a tip credit of up to 33% of the state minimum wage. The maximum tip credit is $2.39 per hour. When the employer claims the full tip credit, the employee's total compensation—combining the $4.86 cash wage and tips—must equal at least $7.25 per hour (the state minimum wage). If an employee's tips do not bring total hourly compensation to $7.25, the employer must pay the difference.

Who qualifies as a tipped employee. Under N.D. Admin. Code § 46-02-07-01(19), a "tipped employee" means any service employee working in an occupation in which the employee customarily and regularly receives more than $30 per month in tips. A "service employee" is defined as an employee who provides direct service to customers and who may receive tips from customers in appreciation for services performed; the employee must regularly and customarily provide face-to-face service to customers that the customers would recognize as being performed on their behalf (N.D. Admin. Code § 46-02-07-01(14)).

Advance notice requirement. An employer who elects to use the tip credit provision must inform the employee in advance that the employer will pay the tipped minimum wage and claim a tip credit. North Dakota regulations do not specify whether the notice must be in writing, but best practice is to document the notice to avoid disputes.

Recordkeeping requirement. Employers who use the tip credit must maintain written records showing that each tipped employee receives at least the minimum wage when direct wages and the tip credit allowance are combined. The regulation does not prescribe a specific form for these records, but the employer must be able to demonstrate compliance upon inspection by the North Dakota Department of Labor and Human Rights.

Tip ownership. Gratuities offered to an employee by a customer belong to the employee and may not be retained by the employer. The employer may consider tips as part of wages for purposes of the tip credit calculation, but the tip credit itself must not exceed 33% of the minimum wage.

Distinction from federal tip credit. Federal law under the FLSA permits a maximum tip credit of $5.12 per hour (reducing the federal cash wage to $2.13 per hour), but North Dakota's 33% cap results in a higher minimum cash wage ($4.86) and a smaller maximum tip credit ($2.39). When state and federal law conflict, the law more favorable to the employee applies—here, North Dakota's higher cash-wage floor controls for employees working in North Dakota.

Source: N.D. Admin. Code § 46-02-07-03 Source: N.D. Admin. Code § 46-02-07-01 Source: North Dakota Department of Labor — Minimum Wage Poster

North Dakota exempts employees employed in a bona fide executive, administrative, or professional capacity from its overtime requirements under N.D. Admin. Code § 46-02-07-02(4)(a). The state's regulations establish duties tests for each exemption category but do not specify a minimum salary threshold; employers must therefore comply with the federal Fair Labor Standards Act (FLSA) salary requirements in addition to the state's duties tests.

Executive exemption — duties test. Under N.D. Admin. Code § 46-02-07-01(6), an "executive" means an employee paid on a salary or fee basis and employed in a bona fide executive capacity whose primary duty consists of:

• Management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof;
• Directing the work of two or more other employees therein; and
• Authority to hire or fire other employees, or whose suggestions as to the hiring or firing and as to the advancement and promotion or any other change of status of other employees will be given particular weight.

Administrative exemption — duties test. Under N.D. Admin. Code § 46-02-07-01(1), an "administrative" employee means an employee paid on a salary or fee basis and employed in a bona fide administrative capacity whose primary duty consists of:

• Office or nonmanual work directly related to management policies or general business operations of the employer or the employer's customer; and
• Who customarily and regularly exercises discretion and independent judgment.

Professional exemption — duties test. Under N.D. Admin. Code § 46-02-07-01(10), a "professional" means an employee paid on a salary or fee basis and employed in a bona fide professional capacity whose primary duty consists of:

• Work requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study as distinguished from a general academic education and from an apprenticeship, and from training in the performance of routine mental, manual, or physical processes;
• Work requiring the consistent exercise of discretion and judgment in its performance; and
• Work that is predominately intellectual and varied in character (as opposed to routine mental, manual, mechanical, or physical work) and is of such character that the output produced or the result accomplished cannot be standardized in relation to a given period of time.

Salary-basis requirement; North Dakota defers to federal FLSA threshold. Each of North Dakota's regulatory definitions requires that executive, administrative, and professional employees be "paid on a salary or fee basis," but the state regulations do not specify a minimum salary dollar amount. Because North Dakota law is silent on the salary threshold, employers must apply the federal FLSA minimum salary requirement for white-collar exemptions. The North Dakota Department of Labor confirms that executive, administrative, and professional exemptions each have their own requirements that must be met for an employee to be exempt from overtime.

Highly compensated employee alternative. North Dakota Admin. Code § 46-02-07-01(7) defines a "highly compensated employee" as an employee who is paid total annualized compensation of $100,000 or more, which includes at least $455 per week paid on a salary or fee basis, and whose primary duty includes performing office or nonmanual work. This state regulatory threshold is lower than the federal FLSA highly compensated employee threshold under 29 C.F.R. § 541.601. When state and federal law conflict, the law more favorable to the employee applies; therefore, an employer relying on the highly compensated employee exemption in North Dakota must satisfy the higher federal FLSA threshold in addition to the primary-duty requirement.

Duties tests align with federal FLSA framework. North Dakota's duties tests for the executive, administrative, and professional exemptions closely parallel the federal FLSA white-collar exemption criteria in 29 C.F.R. Part 541. The state regulations do not establish materially different or more restrictive duties requirements than the federal standard. Because the state law does not specify a salary threshold and the duties tests mirror federal requirements, North Dakota employers in practice apply the federal FLSA white-collar exemption tests—both the salary threshold and the duties tests—when determining whether an employee is exempt from overtime.

Source: N.D. Admin. Code § 46-02-07-01 Source: N.D. Admin. Code § 46-02-07-02(4) Source: North Dakota Department of Labor — Wage and Hour FAQ