Focus On New Laws: Wage Theft Law Changes

June 24, 2019

The changes in the wage theft law bring several new requirements for employers, including cities.

In the 2019 special session, important changes were made to wage theft laws, impacting employer record requirements, statement-of-earnings content, and written notifications for new hires. These law changes, effective July 1, were included in Article 3 of the jobs, commerce, and energy bill (First Special Session Chapter 7).

The crime of wage theft occurs when an employer, with an intent to defraud, fails to pay wages due, demands a refund or rebate for wages owed, or otherwise attempts to show that wages paid are greater than the actual amount paid.

The sanctions for wage theft are steep and include imprisonment of up to 20 years and fines up to $100,000. Additionally, an employer found hindering or delaying a wage theft investigation can be guilty of a misdemeanor. Employers are also explicitly prohibited from retaliating against employees asserting rights under the wage theft law.

The new law also provides for attorney general enforcement of not only the new wage theft law but all sections of Minnesota Statutes, chapters 181 and 177 (state Fair Labor Standards Act).

Required statement of earnings

Employers were already required to provide employees an earnings statement each pay period by written or electronic means. The following are newly required items to include in the paystub information as of July 1:

  • Rates of pay and basis thereof, 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.
  • The physical address of the employer’s main office or principal place of business and the telephone number of the employer.

Notice to workers at the start of employment

Effective July 1, at the start of employment, employers are required to provide a written notice to each employee (including temporary employees, according to the Department of Labor and Industry (DLI)) containing the following information:

  • 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.
  • Allowances, if any, claimed pursuant to permitted meals and lodging.
  • Paid vacation, sick time, or other paid-time-off accruals and terms of use.
  • The employee’s employment status and whether the employee is exempt from minimum wage, overtime, and other provisions of chapter 177, and on what basis.
  • A list of deductions that may be made from the employee’s pay.
  • The number of days in the pay period, the regularly scheduled pay day, and the pay day on which the employee will receive the first payment of wages earned.
  • The legal name of the employer and the operating name of the employer if different from the legal name.
  • The physical address of the employer’s main office or principal place of business, and a mailing address if different.
  • The telephone number of the employer.

The employer must keep a copy of the notice provided to the new hire and signed by each employee acknowledging receipt. The notice must be provided to each employee in English and include text that informs employees that they may request the notice be provided in a particular language. The DLI will make available to employers the English version of the text and assist employers with translation of the notice in requested languages.

Employers may choose the format of the written notice, and some cities may choose to incorporate the information into their new hire letter. DLI has a model notice cities can use.

—View DLI’s model notice

How often wages are paid

While the law already provided for payment of wages to employees at least once every 31 days, the amendments require commissions earned by an employee to be paid at least once every three months. In the event an employer fails to make the required payments, the DLI may charge and collect wages.

Maintaining records

Effective July 1, employers are required to keep documentation of the following items:

  • The name, address, and occupation of each employee.
  • The rate of pay and the amount paid each pay period to each employee.
  • (New) The hours worked for each day and each workweek by an employee.
  • (New) A list of personnel policies provided to the employee, the date the policies were given to the employee, a brief description of the policies, and a copy of notice provided to workers at the start of employment.

These documents are subject to certain access requirements to make state inspections easy, with penalties up to $5,000 for repeated noncompliance.