New Minnesota Wage Theft Law Imposes New Employer Requirements and Allows both Civil and Criminal Penalties for Violations

Minnesota’s new wage theft law, which went into effect on August 1, 2019, expands the required information that employers must disclose to employees upon hiring and throughout their employment. The law also requires employers to maintain additional records, clarifies time limits for when employees must be paid, provides the Attorney General with investigation and enforcement authority, protects employees against retaliation, and allows both civil and criminal penalties for violations. See Minn. Stat. § 181.101 (payment of wages); Minn. Stat. § 609.52 (criminal penalties); Minn. Stat. § 177.27, subd. 2 (civil penalties); Minn. Stat. § 181.03 (non-retaliation protections).

Information to Be Disclosed to New Employees (Minn. Stat. § 181.032)

Employers must provide to new employees a written notice of the following information:

  • employee’s employment status and whether he or she is exempt from minimum wage, overtime and other state wage and hour laws, and if so, on what basis
  • number of days in the pay period and the regularly scheduled payday
  • date the employee will receive the first payment of wages earned
  • employee’s rate or rates of pay and the basis thereof
  • applicable allowances that may be claimed for permitted meals and lodging
  • applicable paid vacation, sick time or other PTO, how the PTO will accrue and terms for its use
  • a list of deductions that may be made from the employee’s pay
  • physical address of employer’s main office or principal place of business and a mailing address, if different
  • employer’s telephone number
  • A statement, in multiple languages, informing employees they may request the notice be provided in another language

Once the notice has been provided, employees must sign the notice acknowledging that they have seen the information and the employer must retain a copy of the signed notice. If any of the information changes during the course of employment, the employee must be given notice of the change prior to implementation. The link to Minnesota Department of Labor and Industry’s sample Employee Notice form is available here.

Earnings Statement Disclosures (Minn. Stat. § 181.032)

The new law adds earnings statement disclosure requirements. Earnings statements must include the following:

  • employee name
  • total hours worked in the pay period
  • employee’s rate or rates of pay and basis thereof
  • allowances claimed for permitted meals and lodging
  • total amount of gross pay earned in the pay period
  • list of deductions made from the employee’s pay
  • net amount of pay after all deductions are made
  • date pay period ended
  • employer’s legal and operating name
  • physical address of employer’s main office or principal place of business and a mailing address, if different, along with employer’s phone number

If an employer normally provides electronic statements but receives at least 24 hours’ notice that an employee prefers to receive a hard copy of the earnings statement, the employer must provide the employee with a paper copy of the statement.

Maintaining Records (Minn. Stat. § 177.30)

Employers must maintain records for three years, and the new law requires that the records be kept where the employees are working or in a place where records may be accessible and deliverable to the Department of Labor and Industry within 72 hours of request. It also allows for a $5,000 fine for each repeated failure to maintain the required records.

Timing for Making Wage Payments (Minn. Stat. § 181.101)

The law specifies that employers must pay all wages (salary, earnings and gratuities) to employees at least once every 31 days. All commissions earned by the employee must be paid at least once every three months on a regular payday.

Suggestions

Because of the new law, employers should: 1) provide a compliant wage notice to newly hired employees, 2) review wage statements provided to all employees to ensure they are compliant, 3) review their record retention policies and practices, and 4) provide updated wage notices when any changes occur to employees’ original wages.

Please contact the attorney(s) at Monroe Moxness Berg with whom you work if you have any questions or would like us to review your employee documentation.

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Ansis Viksnins