Wage Theft: Continuing Legislation
By Kevin M. Mosher • Oct 4, 2019
More information on the increasing Wage Theft legislation! As we previously discussed, following Minnesota’s recent (and surprising) adoption of a comprehensive wage theft law, Minneapolis passed an ordinance adopting portions of the Minnesota Wage Theft Law (MWTL). Although very similar, the Minneapolis ordinance adds some additional requirements that employers should be aware of!
SUMMARY OF MN’S NEW WAGE THEFT LAW
The MWTL touches on several criminal and employment laws with the idea that more information to employees regarding their wages will result in fewer incidents of wage theft by employers. The new law does several things: it makes clear earned commissions need to be paid at least every three months; it clarifies the definition of wages to include salary, earnings, and gratuities; and it requires employers to provide notice to new employees of several details regarding their wages and benefits. Moreover, wage statements must have even more information on them beyond what was previously required, and more records are now required to be kept for three years by employers.
Finally, not to be understated, but if the employer commits “wage theft” it could lead to imprisonment and a fine for any person directly or indirectly working in the interest of the employer (yikes). The State of Minnesota has put aside $3 million dollars in funding to implement an investigative program. These teams will be conducting on site-investigations and in-person interviews to find employees working “under the table.”
SUMMARY OF NEWER MINNEAPOLIS WAGE THEFT LAW
Minneapolis hopes that by attempting to address these issues locally they will be able to combat wage theft on a larger scale. The city is hoping additional resources for this investigative team will be included in the 2020 budget.
In addition to the adoption of some portions of the MWTL, Minneapolis will also require employers to include a balance of the employee’s current sick and safety time earnings on each statement and give notice to new and current employees of their sick and safety time rights and the date in which they will start accruing this time.
Although Minnesota only requires the notice to be given to new employees, Minneapolis is requiring that notice of the act must be posted in the workplace (in various languages) and notice must also be given to all current employees. Employers will need to have new employees sign-off on receipt of this information. Based on the nature of the notices, doing this at the offer of employment stage seems to make the most sense.
Under the Minneapolis Ordinance, employers must adhere to regularly scheduled paydays and provide pre-employment notices to employees of their employment terms and conditions. Employers must additionally provide a statement of their earnings at the end of each pay period and provide a current balance of the employee’s sick and safety leave.
The Minneapolis pre-employment notice mirrors the Minnesota law and requires employers give notice of:
The employee’s rate(s) of pay, the basis for the pay, the measurement of pay (hourly, shift, day, week, salary, piece rate, commission, or some other method);
Allowances for meals and lodging, if any;
Paid vacation, sick time or other forms of PTO, how the PTO will accrue and terms for its use;
Whether the employee is exempt, and the basis for the exemption;
A list of deductions that may be made from the employee’s pay;
The number of days in the pay period, the regularly scheduled payday and the day the employee will receive the first payment of wages;
The legal name of the employer;
The employer’s physical address; and
The telephone number of the employer.
The requirements for a company to be liable for one’s actions, even without having any connections to the violations, is now very low. HR professionals, in-house attorneys and risk managers should take note of what Minnesota and Minneapolis have done because other states are certain to follow their lead on this subject. If you have any questions, please contact us at 651-389-5000 or email@example.com to discuss with an attorney.
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