New wage notice, earnings and recordkeeping requirements; civil and criminal sanctions for wage theft.
The Minnesota Department of Labor and Industry (DLI) estimates that “up to 40,000 Minnesota workers pursue complaints of wage theft each year.”1 In an effort to mitigate the effects of wage theft, $3.1 million in funding over the next two years will go towards enforcing the state’s amended wage and hour laws.2 Among the changes to the existing law are: 1. written notice requirements at the start of employment, 2. additional information included on earning statements, along with 3. recordkeeping requirements, and 4. increased civil penalties for repeated violations, in addition to 5. criminal sanctions for “wage theft.”3 All of the new provisions are effective as of July 1, 2019 with the exception of the “criminal wage theft” provisions, which go into effect August 1, 2019.4
Written Notice Requirements
The new law requires Minnesota employers provide employees, at the start of their employment, written notice regarding wage and payment information.5 The notice must include the following:
- Employee’s rate or rates of pay and basis, 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;
- Paid vacation, sick time or other paid time-off accruals and terms for their use;
- Employment status and whether the employee is exempt from minimum wage, overtime, and other provisions of Minn. Stat., Chapter 177 (Minnesota Fair Labor Standards Act) and on what basis;
- List of deductions that may be made from employee’s pay;
- Number of days in the pay period, the regularly scheduled payday and the payday on which the employee will receive the first payment of wages earned;
- Legal name of the employer and the operating name, if different;
- Physical address of the employer’s main office or principal place of business and a mailing address, if different; and
- Telephone number of the employee.
Minn. Stat. § 181.032 (d)-(f).
The DLI provides a written notice example that employers may use or create their own as long as it contains the required information. The notice must be in English and include a statement, in multiple languages, that informs employees they may request the notice in another language, as provided by the DLI.6 Employers must keep a copy of the notice on file, signed by the employee and “acknowledging receipt.” Any changes to the notice information must also be provided in writing to the employee prior to their effective date.7
Earnings Statement Amendments
The new legislation also requires the following new specified information be included on each employee’s pay period earnings statement:
- Employee’s rate or rates of pay and basis, including whether the employee is paid by hour, shift, day, week, salary, piece, commission or other method;
- Allowances, if any, claimed pursuant to permitted meals and lodging;
- Physical address of the employer’s main office or principal place of business, and a mailing address, if different; and
- Telephone number of the employer.
Minn. Stat. § 181.032 (b)
The existing recordkeeping statute that requires employers retain certain specified information was amended to include the following:
- 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 provided to and signed by each employee as required by section 181.032 (d) and a copy of any written changes to the notice under section 181.032 (f).
(f). Minn. Stat. § 177.30 (a).
The amendment includes a new timing requirement which states all records must be “readily available for inspection by the commissioner upon demand,” and “must be either kept at the place where employees are working or kept in a manner that allows the employer to comply with this paragraph within 72 hours.”8
Under the previous law, an employer could be fined “up to $1,000 for each failure to maintain records as required by [the recordkeeping statute],” and the new law provides that employers may be fined up to $5,000 for each repeated failure.9 Further, an employer may not “retaliate” against an employee for asserting a right or remedy, filing a complaint, or telling the employer of the intention to file a complaint under section 177 (Minnesota Fair Labor Standards Act) or section 181 (Minnesota Employment Code).10 In addition to any other remedies as provided by law, “an employer who violates [the retaliation subdivision] is liable for a civil penalty of not less than $700 nor more than $3,000 per violation.” 11
Section 181.101 on wages also now requires that all “salary, earnings, and gratuities earned by an employee” must be paid by an employer at least once every 31 days, and all “commissions” at least once every three months.12 After ten days of service of demand to comply with this provision, the commissioner may charge the wages earned at the employee’s rate or rate required by law, whichever is greater, and a penalty at the employee’s average daily earnings at the same rate for each day beyond the ten-day limit.13 The provision struck the previous fifteen-day limit, and provides no limit on penalties resulting from failure to pay wages. Additionally, the commissioner may collect the commissions earned and “a penalty equal to 1/15 of the commissions earned but unpaid for each day beyond the ten-day limit.”14
Criminal “Wage Theft”
Effective August 1, 2019, the new legislation adds “wage theft” to the criminal definition of theft, and occurs when any Minnesota 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 that the wages paid to any employee were greater than the amount actually paid to the employee.
9 Minn. Stat. § 177.30 (c).
11 Minn. Stat. § 181.03 subd. 6.
12 Minn. Stat. § 181.101.
15 Minn. Stat. § 609.52 subd. 1.