E-Alert - Minnesota Enacts New Wage Theft Laws and Employee Notice Requirements

06/04/2019 / Dan Ballintine

The Minnesota legislature, at the end of its most recent session, passed sweeping new amendments to statutes which create criminal penalties for the failure to pay wages and impose requirements for employers to document the terms of employment with their employees.  The new amendments have not yet been signed into law by the Governor, but he has publicly indicated he will do so in the near future.  It is currently unclear whether the new requirements will take effect July 1 or August 1, 2019, so it is imperative that employers prepare now.

Wage Theft

Section 609.52 of the Minnesota Statutes (the criminal statute for theft) was amended to make clear that prison time can be imposed for wage theft.  “Wage theft” is defined as occurring “when an employer with intent to defraud”:

  1.  fails to pay an employee all wages, salary, gratuities, earnings, or commissions at the employee’s rate or rates of pay or at the rate or rates required by law, including any applicable statute, regulation, rule, ordinance, government resolution or policy, contract or other legal authority, whichever rate of pay is greater;
  2. directly or indirectly causes any employee to give a receipt for wages for a greater amount than that actually paid to the employee for services rendered;
  3. directly or indirectly demands or receives from any employee any rebate or refund from the wages owed the employee under contract or employment with the employer; or
  4. makes or attempts to make it appear in any manner that the wages paid to any employee were greater than the amount actually paid to the employee.

The statute defines the “employer” to mean “any individual, partnership, association, corporation, business trust, or any person or group of persons acting directly or indirectly in the interest of an employer in relation to an employee.”  In other words, individual employees of an employer who have control over the payment of wages can be prosecuted for a crime.  Wage theft is now punishable by imprisonment of up to twenty years and a fine of $100,000 for wage theft in excess of $35,000, ten years and a fine of $20,000 for wage theft exceeding $5,000, and five years and a penalty of $10,000 for wage theft exceeding $1,000.

Earnings Statement

As part of the new legislation, Section 181.032 of the Minnesota Statutes was amended to require that employers provide employees, at the end of each payroll period, an earnings statement which includes the following information (newly added requirements are italicized):

  1. the name of the employee;
  2.  the hourly rate or rates of pay and basis thereof, including whether the employee is paid by hour, shift, day, week, salary, piece, commission or other method;
  3. allowances, if any, claimed pursuant to permitted meals and lodging;
  4. the total number of hours worked by the employee unless exempt [from minimum wage/overtime];
  5. the total amount of gross pay earned by the employee during the period;
  6. a list of the deductions made from the employee’s pay,
  7. the net amount of pay after all deductions are made,
  8. the date on which the pay period ends,
  9. the legal name of the employer and the operating name of the employer if different from the legal name,
  10. the physical address of the employer’s main office or principal place of business, and a mailing address if different, and
  11. the telephone number of the employer. 

Information at Commencement of Employment

Section 181.032 was also amended to require that employers provide new employees similar information at the commencement of employment.  Specifically, at the “start of employment, an employer shall provide each employee a written notice containing the following information”:

  1. the rate or rates of pay and basis thereof, including whether the employee is paid by the hour, shift, day, week, salary, piece, commission or other method, and the specific application of any additional rates;
  2. allowances, if any, claimed pursuant to permitted meals and lodging;
  3. paid vacation, sick time or other paid time off accruals in terms of use;
  4. the employee’s employment status and whether the employee is exempt from minimum wage, overtime, and any other provisions of Chapter 177, and on what basis;
  5. a list of deductions that may be made from the employee’s pay;
  6.  the number of days in the pay period, the regularly scheduled pay date, and the pay day on which the employee will receive the first payment of wages earned;
  7. the legal name of the employer and the operating name of the employer if different from the legal name;
  8. the physical address of the employer’s main office or principal place of business, and a mailing address if different; and
  9. the telephone number of the employer.

Employers must also “keep a copy of the [above] notice … signed by each employee acknowledging receipt of the notice.”  They must also “provide the employee any written changes to the information contained in the notice . . . prior to the date the changes take effect.” The notice must be provided to each employee in English, and include text provided by the Commissioner of the Minnesota Department of Labor & Industry that informs employees they may request, the notice be provided in a language other than English.  If requested, employers must provide the notice in the language requested by the employee, but the Commissioner must assist employers with translation of the notice in the languages requested by their employees.

List of Personnel Policies

Section 177.30 of the Minnesota Statutes was also amended to require that employers maintain a “list of the personnel policies provided the employee, including the date the policies were given to the employee and a brief description of the policies” as well as “a copy of the notice provided to each employee as required by Section 181.032 . . .including any written changes to the notice.”  It is possible that providing a list of the table of contents of an employee handbook may suffice with respect to policies contained within the handbook.  Employers must keep these records “readily available for inspection by the Commissioner upon demand” and “must be kept either at the place where employees are working or kept in a manner that allows the employer to comply with this paragraph within 72 hours.”  Failure to keep the proper records allows the Commissioner, in a wage dispute, to make his or her own determination of any wages that are due “based on available evidence.” A $5,000 fine for “each repeated failure” may be levied.  The new legislation also imposes criminal penalties upon employers who hinder or delay the Commissioner in the performance of his or her duties.

To view additional information from the Minnesota Department of Labor and Industry please click here.

Contact an attorney in Larkin Hoffman’s Employment Law Group if you have questions regarding these changes in the law or if you need assistance to comply with them.