During Minnesota’s 2019 legislation session, Governor Walz signed a new law that criminalizes wage theft. The law also requires new notice and recordkeeping requirements.
Effective July 1, 2019, Minnesota employers are required to provide a written notice to employees at the start of their employment. The notice must include the following information, which is in addition to the information required to be provided to employees under existing law:
- the employee’s 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;
- allowances, if any, that may be claimed for permitted meals and lodging;
- the physical address of the employer’s main office or principal place of business, and a mailing address, if different; and
- the telephone number of the employer.
Employers must also provide employees with a written notice of any changes to the information above before the changes take effect. Furthermore, employers must keep the following records:
- hours worked for employees paid at piece rate and the number of pieces completed at each piece rate;
- a list of the personnel policies provided to the employee, including the date the policies were given to the employee and a brief description of the policies; and
- a copy of the notice that is required to be provided to and signed by each employee at the start of employment and a copy of any written changes to the notice that were subsequently provided to employees.
If an employer fails to pay wages, the commissioner may order the employer to:
- pay wages or commissions owed to an employee;
- pay an amount equal to the wages or commissions owed as liquidated damages;
- pay compensatory damages incurred by an employee;
- cease and desist in the violative practice; and/or
- pay a civil penalty for repeated or willful violations.
Then, starting August 1, 2019, employers who commit wage theft will be guilty of a crime. Wage theft occurs when an employer, with intent to defraud:
- 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, whichever is greater;
- 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;
- directly or indirectly demands or receives from any employee any rebate or refund from the wages owed the employee under contract of employment with the employer; or
- makes or attempts to make it appear in any manner the wages paid to any employee were greater than the amount actually paid to the employee.
The sanctions for committing wage theft are as follows:
- Imprisonment for not more than 20 years, payment of a fine of not more than $100,000 or both if the value of the wages stolen is more than $35,000.
- Imprisonment for not more than 10 years, payment of a fine of not more than $20,000 or both if the value of the wages stolen exceeds $5,000.
- Imprisonment for not more than five years, payment of a fine of not more than $10,000 or both if the value of wages stolen is more than $1,000 but not more than $5,000.
- Imprisonment for not more than one year, payment of a fine of not more than $3,000 or both if the value of the property or services stolen is more than $500 but not more than $1,000.
Minnesota employers should review this new wage theft law, as it imposes additional obligations. Employers may want to seek guidance from the Minnesota Department of Labor and Industry or from their payroll providers to ensure they are compliant. All provisions of the law, except for the criminal wage theft and sanctions, are effective now.