North Dakota Minimum Wage: Rate, Tip Credit, Rules

The first North Dakota payroll question I ever got came from a woman running a small restaurant in Fargo. Her bookkeeper had set the tipped cash wage at $2.13 an hour, because that is the number every national payroll template opens with. In North Dakota that number is wrong by $2.73 an hour, on every tipped hour, for as long as nobody checks.

North Dakota writes its own minimum wage into statute rather than borrowing the federal one by reference. The headline figure happens to match, which makes the state look like a copy of federal law. It is not. The tip rule, the board and lodging credit and the training wage question all come out differently here.

So this page does two things. It gives you the numbers a North Dakota employer needs to run payroll, and it flags the three places where copying a federal default quietly underpays your staff.

The Current North Dakota Rate

The North Dakota minimum wage is $7.25 an hour, and it has been since July 24, 2009. The figure sits in North Dakota Century Code chapter 34-06, at section 34-06-22, as the last step of a three-year phase-in: $5.85 in 2007, $6.55 in 2008, then $7.25.

That is a real state number, not an adopted federal one, and the difference matters in one direction. If Congress raises the federal floor, every employer covered by the Fair Labor Standards Act pays the higher federal rate immediately, while section 34-06-22 would keep reading $7.25 until the Legislative Assembly changed it. The federal rate has not moved since 2009, which the federal minimum wage guide covers in full.

One more state-specific piece of arithmetic belongs in the same place. Board, lodging and similar facilities can count toward wages at the employer’s actual cost, capped at $18 a day, only with a written agreement and only where the employee’s acceptance is genuinely voluntary. Required uniforms may never push a paycheck below $7.25 for the pay period.

Is an Increase Scheduled?

No increase is scheduled in North Dakota. Section 34-06-22 lists three dated steps, the last of them July 24, 2009, and nothing after it. There is no cost of living index, so the rate does not drift upward on its own each January the way it does in a growing number of states.

Two levers exist inside the state. The Legislative Assembly can amend the statute, or the labor commissioner can adopt a rule setting a different state rate, an authority subsection 2 of the same section deliberately preserves. A third path runs through Congress, and the federal minimum wage increase tracker is where to watch that one.

For budgeting, treat the North Dakota wage floor as flat and let the labor market, not the statute, drive your hourly rates. If your posted rates already sit comfortably above $7.25, the practical work here is confirming that your tipped and licensed rates are right, not watching for a state increase that is not coming.

Tipped Employees and the 33 Percent Credit

North Dakota allows a tip credit of 33 percent of the minimum wage, and no more. At $7.25 that credit is $2.39, so the cash wage you owe a tipped employee is $4.86 an hour. The state labor department states the $4.86 figure directly on its Minimum Wage and Work Conditions poster, effective July 24, 2009.

This is the easiest way to get North Dakota payroll wrong. Federal law would let you pay a $2.13 cash wage against a $5.12 credit, and the national payroll templates default to it. The stricter rule governs, so in North Dakota the federal default underpays by $2.73 for every tipped hour worked.

Who counts as tipped is narrower than most owners assume. A tipped employee is a service employee who customarily and regularly receives more than $30 a month in tips, and a service employee has to provide personal face-to-face service the customer would recognize as performed for their benefit. Cooking and dishwashing are excluded by name.

Tips themselves belong to the employee and the employer may not retain them. Tip pooling is allowed only among tipped employees, and only after a vote in which 50 percent plus one of all tipped employees approve it, with a written record of the vote and the names. Our guide to tipped minimum wage works through the pay period arithmetic.

City and County Rates

There are no city or county minimum wages in North Dakota, and state law forbids them. Century Code section 34-06-23 prohibits a political subdivision from enacting, maintaining or enforcing a living wage mandate greater than the state minimum wage rate.

The prohibition is written broadly. It covers charters, ordinances, purchase agreements, contracts, regulations, rules and resolutions, and political subdivision is defined to include cities, counties, townships, school districts and any other local government. It also reaches employers that contract with a political subdivision or that received tax abatements, loan guarantees or other financial assistance from one.

For a small employer running two or three North Dakota locations, that is genuinely good news: one rate, one poster, one payroll configuration, and no local ordinance calendar to track. If you also employ people across the border in Minnesota or Montana, those states set their own rates and none of this applies to them.

Exemptions and Industry Carve-Outs

The North Dakota wage order exempts a short, specific list of workers from the minimum wage, and it is shorter than most states. Everyone not on the list is owed $7.25 unless the labor commissioner has issued a license for a lower rate.

Two industry questions come up constantly, and both have clean answers here. North Dakota has no fast food wage council and no healthcare minimum wage, so a restaurant chain and a clinic pay the same $7.25 floor as everyone else. Agricultural employment is exempt from state overtime, not from the state minimum wage.

The overtime side of the wage order does carry industry-specific rules worth knowing: taxicab drivers earn overtime after 50 hours rather than 40, and hospitals and residential care establishments may agree with their employees on a fourteen-day overtime period paying time and a half over eight hours in a day or 80 in the period. Classification questions belong in the exempt versus non-exempt guide.

Paying below $7.25 legally requires paperwork. Section 34-06-15 lets the commissioner license a subminimum wage for a worker whose productive capacity is impaired by a physical or mental disability, and for a student or learner in a career and technical education program. The vocational student license, form SFN 51370, cannot go below 85 percent of the state minimum, which is $6.17 an hour rounded up at a $7.25 floor.

The disability license, form SFN 51371, is heavier. It requires a commensurate wage rate documented against the prevailing wage for the same work and the worker’s own productivity, physician verification of the disability in relation to the job duties, reevaluation every six months, and renewal at least yearly. The state process references the parallel federal certificate program for community rehabilitation programs.

Youth and Training Wage

North Dakota has no training wage and no youth wage. The state poster says it in a single line: North Dakota does not have a training wage. Neither the statute nor the wage order creates a lower rate based on age or on length of service.

That closes off the federal youth minimum wage of $4.25 an hour, which normally applies to employees under 20 for their first 90 consecutive calendar days. State law here requires $7.25 for every covered employee and creates no age-based exception, and where a state standard is higher, the state standard is what an employer has to meet. A 17-year-old on their first shift in Bismarck earns $7.25.

Young workers do bring separate obligations. Employment and age certificates are required for 14 and 15 year olds, and their hours are capped at three per school day, eight per non-school day, 18 per school week and 40 per non-school week, between 7 a.m. and 7 p.m., extended to 9 p.m. from June 1 through Labor Day. Hiring mechanics for the state sit in our North Dakota hiring guide.

The Poster Requirement

Every affected employer must keep the labor commissioner’s summary of the wage rules posted in a conspicuous place in a commonly frequented area in which employees work. That duty is in section 34-06-04, alongside the commissioner’s obligation to send the summary to every employer the rules affect.

The document is the North Dakota Minimum Wage and Work Conditions Summary Poster, and the Department of Labor and Human Rights publishes it free on its required employer posters page in English and Spanish. The department states outright that you are not required to buy posters from any commercial source or vendor, which is worth remembering the next time a compliance poster invoice arrives in the mail.

The federal Fair Labor Standards Act poster is a separate requirement and the state summary does not substitute for it. Remote and hybrid staff need electronic access to both, in a place they actually open rather than a shared drive nobody visits. Keeping those documents with the rest of your onboarding paperwork is exactly the kind of thing FirstHR was built to stop you from losing track of.

What to Do When a Rate Rises

Because North Dakota sets a fixed figure with no index, the trigger for action is a change in federal law or an amendment to state law, not an automatic January adjustment. When one arrives, the sequence below is short enough to finish in an afternoon.

Set a recurring reminder for early January even though North Dakota itself is static. That is when most state and local rates move nationally, and one reminder covers you if you ever hire across state lines. The North Dakota HR compliance guide covers the rest of the state picture, including final paychecks, paid time off payout and the state workers compensation fund.

Frequently Asked Questions

What is the minimum wage in North Dakota?

It is $7.25 an hour, in effect since July 24, 2009 under Century Code section 34-06-22. The figure matches the federal minimum wage but is a separate state law, so a federal increase would raise your effective floor immediately while the state statute kept reading $7.25 until the Legislative Assembly amended it.

Is North Dakota’s minimum wage going up?

No increase is scheduled. The statute lists three dated steps ending on July 24, 2009 and contains no index. A change would take an amendment by the Legislative Assembly, a rule adopted by the labor commissioner under subsection 2, or an act of Congress raising the federal floor above $7.25.

What is the tipped minimum wage in North Dakota?

The cash wage is $4.86 an hour. The wage order caps the tip credit at 33 percent of the minimum wage, which is $2.39, so the federal $2.13 cash wage is not available here. You must tell the employee in advance that you are taking the credit and keep written records showing that wages plus tips reach $7.25 for all hours worked.

Can a North Dakota city set its own minimum wage?

No. Section 34-06-23 bars any political subdivision from enacting, maintaining or enforcing a living wage mandate above the state rate, and the definition covers cities, counties, townships and school districts. Fargo, Bismarck, Grand Forks, Minot, West Fargo, Williston and Dickinson all operate at $7.25.

Does North Dakota have a training wage or a youth wage?

No. The state poster states that North Dakota does not have a training wage, and no youth rate exists in the statute or the wage order. Because state law requires $7.25 for every covered employee with no exception based on age, the federal $4.25 youth rate for employees under 20 cannot be used here.

Can I ever pay less than $7.25 an hour in North Dakota?

Only under a license from the labor commissioner or a listed exemption. Section 34-06-15 covers workers whose productive capacity is impaired by a disability and students or learners in career and technical education programs. Student licenses stop at 85 percent of the state minimum, and disability licenses require a documented commensurate wage rate reviewed every six months.

Do I have to post a minimum wage notice in North Dakota?

Yes. Section 34-06-04 requires the commissioner’s summary to be posted in a conspicuous place in a commonly frequented area in which employees work. The Department of Labor and Human Rights publishes the poster free in English and Spanish, and the federal Fair Labor Standards Act poster remains a separate requirement.