Compliance Countdown: An Employer's Guide to Minnesota's New Wage Theft Law

Minnesota has recently enacted what is being called the Wage Theft Law and set a tight timeline for employers to comply. The provisions of the law primarily relate to new disclosure and record-keeping requirements for new and existing employees, which go into effect on July 1, 2019. The law also creates the crime of "wage theft," effective August 1, 2019. To assist you, a summary of the most significant changes affecting Minnesota employers is provided below with links to key related documents provided by the Minnesota Department of Labor and Industry (DOLI).

CHANGES EFFECTIVE JULY 1, 2019:

Wage Notice

The new law amends Minnesota Statutes § 181.032 to require employers to provide employees with the following information at the start of employment (and to existing employees if and when the required information changes):

• rate(s) of pay and the basis of that pay, 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 claimed for meals and lodging;
• paid vacation time, sick time, or other PTO accruals and terms of use;
• employee's employment status, including whether the employee is exempt and on what basis;
• the 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 payday on which the employee will receive the first payment of wages earned;
• the legal name of the employer and, if different, the operating name of the employer;
• the physical address of the employer's main office or principal place of business and, if different, a mailing address; and
• the telephone number of the employer.

The wage notice must be provided in English and must include wording provided by the DOLI stating that the employee may request the notice in another language. For your convenience, the DOLI website provides copies of the notice translated into Minnesota's 13 most commonly spoken languages.

The wage notice must be given to the employee on their start date, and the employer must keep a signed copy. A wage notice must also be provided to existing employees the first time any information required on the wage notice changes for them (e.g., when their compensation changes). Once an employee has received their first wage notice, you must simply provide them with written notice of any change to the relevant information before it takes effect. These subsequent notices can be in any written form in the language requested by the employee, and they do not need to be signed.

Additional Resource: MN DOLI Q&A for Employers on Minnesota's New Wage Theft Law

KEY TAKEAWAY: Review the DOLI Sample Wage Notice. Maslon's Labor & Employment group can help you tailor this notice to better suit your needs.

Statement of Earnings

The following additional information must be included in the regular statement of earnings (aka pay stub) provided to every employee, in addition to the information already required by Minnesota Statutes § 181.032:

• the basis for rate(s) of pay, including whether the employee is paid by the hour, shift, day, week, salary, piece, commission, or other method;
• allowances claimed for permitted meals and lodging;
• the physical address of the employer's main office or principal place of business and a mailing address (if different); and
• the telephone number of the employer.

Timing of Payment of Wages

Under the new law, all wages—including salary, earnings and gratuities, but not commissions—must be paid at least once every 31 days. All commissions earned by an employee must be paid at least once every 3 months.

KEY TAKEAWAY: If you have employees who earn commissions, make sure your policies clearly state when those commissions are "earned" for purposes of payment.

Additional Record-Keeping Requirements

Employers must also keep records of:

• for employees paid on a piece rate basis, 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 signed copy of the wage notice discussed above.

These new record-keeping requirements apply to all employees, not just new employees. Records must be kept for a minimum of 3 years and available for inspection by the DOLI.

KEY TAKEAWAY: Employers should create or revise a policy acknowledgement form that satisfies the new law's requirements.

CHANGES EFFECTIVE AUGUST 1, 2019:

Crime of "Wage Theft" and Criminal Sanctions for Committing "Wage Theft"

The new law also amends Minnesota Statutes § 609.52 to create the crime of "wage theft," which is punishable by fines and imprisonment. The crime of wage theft occurs when an employer does any of the following, with intent to defraud:

• fails to pay an employee all wages, salary, gratuities, earnings, or commissions at the employee's rate(s) of pay or at the rate(s) required by law, whichever is greater.
• directly or indirectly causes any employee to give a receipt for wages for an amount greater than what was 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.
• 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.

Employers found guilty of wage theft may be liable for a fine of up to $100,000 and can be imprisoned for up to 20 years, depending on the value of the stolen wages. The law allows for the amount of stolen wages to be aggregated over a six-month period.

OPPORTUNITY TO REVIEW EMPLOYEE CLASSIFICATIONS: In addition to ensuring employees receive their wages in full and on time, employers should take this opportunity to ensure they have properly classified their employees as either exempt or non-exempt.

Please contact Maslon's Labor & Employment group for help to ensure compliance with these requirements.