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MAT Staff August 13, 2019

New Wage Theft Law In Effect

Amendments to the Wage Theft Law Affects all Townships with Employees
The 2019 Legislative Session included amendments to Minnesota’s Wage Theft law. See Minn. Session Laws 2019, First Special Session Ch. 7, Art. 3. The Wage Theft law protects employees from an employer’s failure to pay wages, withholding wages, demanding rebate of wages owed, or attempts to show wages were paid in an amount greater than the employee received.

The Wage Theft law is not new. The former version required townships to keep certain records about employees and their earnings, issue statements of earnings with paychecks, pay wages at least once every 31 days, and other requirements. The new version requires townships to add additional information to paychecks, include more information in employment records, and issue all newly hired employees a document containing certain information. The amendment adds a criminal wage theft offense.

MAT understands the definition of “employee” to exclude elected officials who are compensated for their elected activities. The definitions also exclude people serving on a board, commission or committee, and people who volunteer services to the township without pay. See Minn. Stat. § 177.23, subd. 7(8). However, any township officer who is also serving as an employee is subject to the law for the part of their earnings that are attributed to work as an employee.

The new provisions are effective July 1, 2019, except for the criminal wage theft provision, which is effective August 1, 2019. The amendments are summarized below:

1. Statements of Earnings: Per Minn. Stat. § 181.032(b), employers were already required to issue an earnings statement to employees, but the new amendments require additional information be shown on every earnings statement. Effective July 1, 2019, in addition to the items already required, the statement must also now include the following:

  • The rate or 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 a mailing address if different;
  • the telephone number of the employer.

2. New Hire Notice: All new employees must receive a written notice 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; and
    • the telephone number of the employer.

Minn. Stat. § 181.032(d). The employer must keep a copy of the notice signed by the employee to acknowledge his or her receipt of it. Minn. Stat. § 181.032(e) & 177.30(a)(5). The employer must provide an updated notice to the employee if any of the information in the notice changes. Minn. Stat. § 181.032(f). The Minnesota Department of Labor and Industry has provided a sample Employee Notice, available at this link: https://www.dli.mn.gov/business/employment-practices/employee-notice .

3. Additional Record Keeping: Changes to Minn. Stat. § 177.30(a) now require the employer to keep a list of the personnel policies provided to each employee. The records must be readily available for inspection by the Commissioner of Labor and Industry. Failure to maintain the records as required can result in a fine of up to $1,000, and a $5,000 fine for each repeated failure. Failure to keep the records can also be prosecuted as a misdemeanor under Minn. Stat. § 177.32.

4. Pay Employees at least every 31 Days: Employers were already required to pay all wages due to employees at least once every 31 days, but the new law allows enforcement of it by the Attorney General in addition to the Department of Labor. Townships must ensure their employees are paid within the time provided by Minn. Stat. § 181.032. This section does not apply to payments owed to contractors, which fall under different statutes, nor to the township’s elected officials.

5. New Crime of Wage Theft: Beginning August 1, 2019, the new crime of Wage Theft occurs when an employer, with intent to defraud, does any of the following:
i. 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, including any applicable statute, regulation, rule, ordinance, government resolution or policy, contract, or other legal authority, whichever rate of pay is greater;
ii. 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;
iii. 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
iv. 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.

The penalty for the crime varies depending on the circumstances of the theft, but penalties can include up to 20 years in prison and a fine of up to $100,000.

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