JD Supra
June 12, 2019

In one of the most significant pieces of legislation affecting employers in many years, the Minnesota Legislature passed, and Governor Walz signed, the Jobs and Economic Development Omnibus bill that includes new wage theft protections for employees and new requirements for employers. The wage theft bill is one of the few pieces of bipartisan employment legislation that survived the 2019 legislative session. The law constitutes a very significant change in wage payment requirements and enforcement. It includes increased civil enforcement and recordkeeping requirements for employers, as well as new criminal penalties for intentional wage theft. These changes will go into effect on July 1, 2019.

What is Wage Theft?

The Omnibus bill includes two separate areas of enforcement. The first area concerns civil enforcement of wage payments. It increases the penalties for failure to pay wages and creates certain notice and recordkeeping requirements. The second area concerns criminal penalties for intentional wage theft. While both areas are referred to colloquially as wage theft, the statutory definition of wage theft applies only to intentional wage theft under the criminal statute. The law, however, increases potential exposure for employers that do not pay employees properly.

Civil Enforcement

The bill allocates over $2 million annually to civil enforcement of wage theft issues through the Minnesota Department of Labor and Industry and the Attorney General’s Office. It provides greater enforcement mechanisms including the authority to inspect places of employment “without unreasonable delay” and gives the Commissioner of Labor the ability to obtain an inspection order from the court if the employer refuses. It also makes it a misdemeanor to hinder or delay the Commissioner in the performance of his duties.

The new law gives the Commissioner the right to interview non-management employees in private regarding matters under investigation. It also increases the penalty for repeat failures to provide the records required by the Department of Labor to $5,000 per repeated failure. The law gives the Department the ability to share data with other public agencies, including licensing agencies. The data sharing will likely have implications for government contractors that run afoul of these new requirements. Finally, the law includes a retaliation prohibition, which includes a private right to bring a lawsuit, as well as a civil penalty in an amount between $700 and $3,000 per violation.

Timing of Payment of Wages

The law amends Minnesota Statute § 181.101 regarding the timing of wage payments. The statute now explicitly includes salary, earnings, and gratuities within the types of wages that must be paid at least once every 31 days. The law also states that all commission earned by an employee must be paid at least once every three months. The law removes the 15-day cap on penalties for late payment of wages. The law now explicitly includes commissions in the types of wages that may be demanded for payment; if the commission is not paid within 10 days of a demand for payment, the Department may charge and collect the commission earned along with a penalty equal to 1/15 of the commissions earned but unpaid for each day beyond the 10-day limit.

Notice and Recordkeeping Requirements

The law requires that employers include additional information in the earning statements provided to employees at the end of each pay period. In addition to the information previously required under Minnesota Statute § 181.032, employers must now also include 1) the rate or rates of pay including the basis of that rate, i.e., whether the employee is paid hourly, by shift, day, week, salary, piece, commission, or other method; 2) allowances claimed pursuant to permitted meals and lodging; 3) the physical address of the employer’s main office or principal place of business including a mailing address if different; and 4) the employer’s telephone number.

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