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MAT Staff October 23, 2019

Wage Theft Law & Processsing Payroll Without a Meeting

Good News … one of townships’ concerns with the new Wage Theft Law can be managed without adding more township board meetings. The Wage Theft Law, Minn. Stat. 181.101, requires employers to pay employees at least once every 31 days. This affects townships that have employees, but also townships that have elected officials perform work that is beyond the duties of the elected office. For example, supervisors who perform manual labor, operating duties, or serve as election judges, are performing work that is beyond the scope of the elected duties. The safe option is to treat the officers as employees for those duties.

Minn. Stat. 471.38, subd. 1, says except as a allowed in the next subdivision, if a claim against a town can be itemized, then the board “shall not audit or allow the claim” until the claimant provides a written, itemized, and signed claim. The statute prohibits the claim from being considered or paid, until the claim is received in the way described by the statute. The process provides the safeguard to taxpayers that all claims are reviewed by the board before payment is authorized.

The exception to that general rule is found in Minn. Stat. 471.38, subd. 2, where is explains the general rule does not apply to any claims for salary or wages of an employee whose salary or wages have been fixed on an hourly, daily, weekly, or monthly basis by the township board. This exception is referred to as paying on a ‘payroll basis’.

To setup payment of wages on a payroll basis, the township board identifies one or more individuals who are authorized to receive the reports of hours worked from employees, and process payroll on a timely basis. This is done without a board meeting. MAT recommends townships pay employees at least twice a month to avoid concerns with the 31-day rule.

At each meeting, the board reviews the payroll already processed to ensure it is within the rules and expectations of the township board. This should allow townships to easily comply with the 31-day payment requirement.

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