North Dakota Overtime Laws

2024

North Dakota overtime laws are designed to protect employees and ensure fair compensation for their work beyond regular working hours. Under the provisions of North Dakota Labor Laws, employers are required to pay eligible employees at a higher rate for any hours worked beyond the standard 40 hours per week.

This article will provide information to successfully navigate North Dakota’s overtime regulations, whether you’re an employer aiming for compliance or an employee defending your rights.

This article covers:

North Dakota Overtime Rates

Employees in North Dakota who work more than 40 hours a week are entitled to receive overtime pay, which must be calculated at 1.5 times their regular rate of pay. Paid holidays, paid time off, and sick leave are not considered when determining overtime hours. 

Since the regular minimum wage in North Dakota is $7.25 per hour, North Dakota’s overtime minimum rate is $10.88 per hour. 

It’s important to note that overtime calculations should be done every week, regardless of how often an employee gets paid. 

Overtime Entitlement in North Dakota

According to North Dakota overtime laws, overtime pay is required for any non-exempt employees who work more than 40 hours per week. This work week is a consistent, consecutive 7-day period chosen by an employer. However, taxicab drivers are entitled to receive overtime compensation for any hours worked beyond 50 hours in a single work week. 

In the case of hospitals and residential care establishments, there is an option to establish a 14-day overtime period through mutual agreement with employees. During this period, if employees work more than 8 hours in a day or exceed 80 hours within the 14-day work period, they must be paid at a rate of at least one and a half times their regular rate of pay.

For employees who work multiple jobs under the same employer’s control, all the hours worked across these jobs must be counted towards calculating overtime.

Read more about Overtime Exceptions and Exemptions in North Dakota.

Compensatory Time in North Dakota

In North Dakota, the state or a division of the state can establish a system for compensatory time, “comp time”, calculation for its non-exempt employees. Comp time is time off given to employees as a substitute for monetary overtime payment.

Comp time can be provided as long as it meets the requirements of the Fair Labor Standards Act and the regulations set by the United States Department of Labor. 

It is important to note that private sector non-exempt employees are not allowed to receive comp time.

Overtime for Employees Covering Shifts in North Dakota

In North Dakota, if two employees working for the state or a government entity have similar job duties, they can agree to swap shifts during their scheduled work hours. The employer may not count these hours towards overtime calculations for the employee covering the shift. Both employees will be treated as if they worked their regular schedules. 

However, this agreement must be approved by the employer before the shift exchange occurs. Each employee has the freedom to decline participation, and their decision should be independent of any employer pressure. Additionally, the agency is not obligated to keep records of the substitute work hours in such cases.

Overtime for Tipped Employees in North Dakota

Employers in North Dakota have the option to pay tipped employees a minimum hourly wage of $4.86. However, it is crucial that the total earnings, including tips, reach or exceed the regular state minimum wage of $7.25 per hour. If the combined amount of wages and tips fall short of the regular minimum wage, the employer is obligated to compensate the employee for the difference.

Most tipped employees are eligible for overtime pay if they work more than a specific number of hours in a week. Overtime hours are compensated at 1.5 times the employee’s regular hourly wage. Their overtime rate must be determined based on the full minimum wage, rather than the lower cash wage provided by the employer. 

Overtime Exceptions and Exemptions in North Dakota

Employees in North Dakota can be exempt from overtime pay if they fall under certain categories defined in labor law. These categories include executive, administrative, and professional positions.

For an employee to be considered an executive, their primary duties must involve managing the enterprise or a recognized department or subdivision within it. They must also be responsible for directing the work of two or more employees and have the authority to hire or fire employees, or their suggestions hold significant weight.

In the case of administrative employees, their primary duties should be office or non-manual work directly related to management policies or general business operations. Additionally, they must regularly exercise discretion and independent judgment in their work.

Professional employees are those whose primary duties involve work requiring advanced knowledge in a specific field of science or learning. This knowledge is typically acquired through specialized intellectual instruction and study, differentiating it from general academic education or apprenticeships. They must consistently exercise discretion and judgment in their work, which is predominantly intellectual and varied, as opposed to routine tasks.  

Other exemptions include:

  • An employee involved in agricultural work, which includes activities such as cultivating, raising, processing, or delivering agricultural products for sale.
  • An employee who dedicates a majority (at least 51%) of their working hours to directly caring for clients in a shelter, foster care, or similar establishment.
  • An employee working in domestic service who lives in the same household where they are employed.
  • A salesperson in retail automotive, trailer, boat, aircraft, truck, or farm implement dealerships who earn commissions and is not required to be present on the premises for more than forty hours per week.
  • A computer professional who uses their judgment and decision-making skills to design, develop, analyze, test, or modify computer programs, or is paid at least $27.63 per hour.
  • An employee who regularly works outside the employer’s premises to make sales or take orders. Non-sales work should not exceed 20% of the total weekly working hours.
  • A mechanic receiving payment based on a commission system using a fixed rate schedule.
  • A retail worker who earns more than 1.5 times the minimum hourly wage and makes over 50% of their total monthly income from sales commissions.
  • Announcer, news editor, or chief engineer for a radio or television station.
  • An employee engaged in an artistic profession that involves original and creative work or relies on the employee’s invention, imagination, or talent.
  • Employees of covered motor carriers as specified by the Motor Carriers Act.
  • A teacher, instructor, tutor, or lecturer who is involved in educational instruction within a school or educational system.
  • A highly compensated employee who earns an annualized compensation of $100,000 or more, including a salary or fee of at least $844 per week.
  • An employee who offers companionship services to elderly or disabled individuals, providing fellowship, care, or protection. Household work, such as cleaning, laundry, or meal preparation, should not exceed 20% of their total working hours in a week.

Penalties for Unpaid Overtime in North Dakota

Not paying employees the appropriate wages is considered a criminal offense in North Dakota. In addition to facing civil penalties, individuals who violate wage laws can be charged with a Class B misdemeanor. Class B misdemeanors carry a maximum penalty of 30 days’ imprisonment and up to a $1,500 fine.

North Dakota law provides workers with the ability to initiate class action lawsuits against employers who fail to properly compensate their employees. There are no requirements for employees to opt in to these class actions, ensuring that all affected individuals have the opportunity to participate in seeking justice.

To protect employees, North Dakota explicitly prohibits any form of retaliation against workers who assert their rights under wage and hour laws. Employers are prohibited from taking actions such as termination, demotion, denial of promotion, or any form of discrimination against employees who exercise their right to make a claim or assert their rights under these laws.

Statute of Limitations For Unpaid Overtime Claims in North Dakota

In North Dakota, there are time limits that govern the filing of unpaid overtime claims. Typically, the statute of limitations for such claims is two years. This means that individuals must initiate legal proceedings within this timeframe to pursue their right to unpaid overtime wages.

However, if an employer intentionally and knowingly violates the law by withholding payment for overtime hours worked, the statute of limitations is extended to three years. This grants individuals an additional year to bring legal action against their employer and seek the rightful compensation for the unpaid overtime wages they are owed.

Legal Cases Relating to Overtime Compensation in North Dakota

Below, we present law cases relating to fair overtime compensation for employees in North Dakota: 

1. Truck Drivers Seek Overtime Compensation Despite Potential Exemption

In the case of Fenlon v. Nickelback Transport, Inc., Derek Fenlon filed a lawsuit against Nickelback Transport (Nickelback) for unpaid overtime wages under the Fair Labor Standards Act (FLSA) and North Dakota labor laws.

Fenlon, a former truck driver and manager for Nickelback, hauled various materials to and from oilfield locations within the state. He alleged that he and other employees were not properly compensated for overtime hours worked. Fenlon further claimed that Nickelback manipulated the overtime hours to reduce or eliminate its overtime payment obligations.

Nickelback claimed that the Motor Carrier Act (MCA) exemption applied to truck drivers. This exempted them from FLSA’s overtime provisions. The court considered a motion to dismiss filed by Nickelback, which included a declaration supporting their position. However, the court determined that the motion should be treated as a motion for summary judgment and denied it because discovery had not yet taken place.

The court also determined that Fenlon needed an opportunity to gather evidence and respond to the motion effectively. The court stated that Nickelback’s motion was premature and could be renewed after adequate discovery had been conducted.

Key lessons from this case:
  • Motor Carrier Act (MCA) exemption under the FLSA exempts certain employees in the motor carrier industry from overtime pay requirements.
  • The employer must provide evidence that an employee and other truck drivers fall within the exemption’s scope.
  • Lawsuits involving overtime claims should adhere to pleading requirements by providing a clear statement of the claim and grounds for relief.

2. Employer Misclassified Employees as Independent Contractors Resulting in Unpaid Overtime Hours

In the case of Eastep v. KRH, Inc., John Eastep filed a lawsuit that claimed that he and other similarly situated individuals were misclassified as independent contractors and were not paid overtime wages. Eastep was a flowback operator for KRH (a corporation that provided oil and gas well monitoring services).

KRH counterclaimed against Eastep by asserting that he lacked standing and requested attorney’s fees under a North Dakota statute for filing a frivolous claim. Eastep moved to dismiss KRH’s counterclaim for failure to state a claim. The court applied the standard of review under the Federal Rules of Civil Procedure, which required a claim to contain sufficient factual matter that stated a plausible claim for relief. The court also considered the conflict between the North Dakota statute allowing attorney’s fees for frivolous claims and Rule 11 of the Federal Rules of Civil Procedure, which addressed sanctions for frivolous claims.

The court relied on the Supreme Court’s decision in Burlington N. R. Co. v. Woods, where it was held that a state statute imposing mandatory penalties on unsuccessful appeals was supplanted by a federal rule allowing costs and fees for frivolous appeals. Based on this precedent, the court concluded that KRH’s counterclaim for attorney’s fees under the state statute failed to state a claim upon which relief could be granted.

The court further noted that since Eastep’s claim had been conditionally certified as a class action, it could not be considered frivolous or lacking factual and legal basis. Consequently, KRH’s counterclaim would not survive a motion for summary judgment if Eastep were to make one.

Key lessons from this case:
  • The Federal Rules of Civil Procedure mandate the dismissal of a claim if it fails to state a claim upon which relief can be granted.
  • When a conflict arises between a state law and a Federal Rule, the court must determine whether the Federal Rule is sufficiently broad to control the issue.
  • Employers can choose to counterclaim an overtime lawsuit but must provide enough evidence to support their claim.

3. Employee Files Lawsuit for Unpaid Overtime Despite Prior Arbitration Agreement

In the case of Davis v. ConocoPhillips Company, John Davis filed a lawsuit against ConocoPhillips for improper classification as an independent contractor and failing to pay overtime wages. Davis sought to certify a class action for similarly situated individuals. 

ConocoPhillips argued that Davis and the putative class members were subject to a valid arbitration agreement. Davis filed a motion to dismiss ConocoPhillips’ defense, arguing that it was not properly stated. He claimed that the defense lacked specific details and did not adequately prove the existence of the arbitration agreement. Davis believed that ConocoPhillips should provide more information and evidence to support their defense.

The court considered the standard for pleading affirmative defenses, which required providing notice without unfair surprise. The court noted that the higher pleading standards applied in other cases might not be necessary for affirmative defenses. As long as ConocoPhillips asserted its defense in the answer, it would be sufficient to inform Davis about the arbitration agreement.

The court concluded that ConocoPhillips’ answer met the requirements for stating an affirmative defense. It provided notice to Davis, even though it did not include extensive factual allegations or present the arbitration agreement itself. Therefore, the court denied Davis’ motion to dismiss the arbitration defense.

Key lessons from this case:
  • Misclassification can lead to legal disputes and potential liability for unpaid wages and benefits.
  • Arbitration is when both parties choose to settle disputes outside the judiciary courts.
  • Employees who are subject to an arbitration agreement cannot file lawsuits but must opt to handle disputes based on the agreement.

Learn more about North Dakota Labor Laws through our detailed guide.

Important Cautionary Note

This content is provided for informational purposes only. While we make every effort to ensure the accuracy of the information presented, we cannot guarantee that it is free of errors or omissions. Users are advised to independently verify any critical information and should not solely rely on the content provided.