Compliance With Minnesota and Minneapolis Wage Theft Laws

October 1, 2019Alerts

Minnesota employers working to comply with the recently enacted Minnesota Wage Theft Law should be aware of its recently passed Minneapolis counterpart: the Minneapolis Wage Theft Prevention Ordinance, which applies to employers with employees who work at least 80 hours per year in the City of Minneapolis. Passed by the Minneapolis City Council, this ordinance introduces a number of wage reporting, recordkeeping and documentation obligations that become effective January 1, 2020.

The Minnesota Wage Theft Law, which became effective on July 1, 2019 and applies to all Minnesota employers, provides employees with substantive legal rights relative to the payment of wages and commissions and adds to employers’ recordkeeping obligations. The Minneapolis Ordinance generally mirrors the Minnesota law, but demands that certain employers further enhance their wage reporting and documentation practices.

Below is a summary of the key compliance obligations for employers under both the Minnesota Wage Theft Law and Minneapolis Ordinance. Employers should audit their pay practices and recordkeeping protocols to ensure compliance.

Earnings Statements

Employers are now required to add the following additional information to the earnings statements provided to employees at the end of each pay period:

  • 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;
  • Allowances, if any, claimed pursuant to permitted meals and lodging;
  • Physical address of the employer’s main office or principal place of business, and a mailing address if different; and
  • Telephone number of the employer.

Recordkeeping

In addition to records employers are already required to keep for three years under the Minnesota Fair Labor Standards Act, employers must now keep these additional records:

  • Hours worked each day and each workweek by the employee;
  • For all employees paid at piece rate, the number of pieces completed at each piece rate;
  • List of the personnel policies provided to the employee, including the date, policies given to the employee and a brief description of the policies; and
  • A copy of the written notice provided to each employee at the start of employment (addressed in further detail below), including any written changes to the notice.

Employers are required to store these records so that they are readily accessible for inspection by the Department of Labor and Industry (DLI) Commissioner on demand, either at the place of the employee’s work or in a manner that allows the employer to produce the records within 72 hours.

Written Notice to New Employees

Employers are now required to give new hires at the start of their employment a written notice containing the following information:

  • 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 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;
  • Employment status, specifically whether the employee is exempt from the minimum wage, overtime and other provisions of Chapter 177, and on what basis;
  • List of deductions that may be made from the employee’s pay;
  • 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;
  • Legal name of the employer and the operating name of the employer if different from the legal name;
  • Physical address of the employer’s main office or principal place of business, and a mailing address if different; and
  • Telephone number of the employer.

Employers must provide a copy of this notice to each employee in English and include specific language on the notice (provided by the commissioner) which informs employees that they may request that the notice be provided to them in a particular language. Employers must keep a copy of this notice signed by each employee acknowledging receipt and must provide employees with written notice of any changes to the information included in the notice before the changes take effect. While the Minnesota law does not require the administration of this notice to all current employees, the DLI has recommended doing so as a best practice.

Additional Obligations Under the Minneapolis Ordinance 

Employers with employees that work at least 80 hours per year in the City of Minneapolis also need to include the following information on the written notice to new employees described above:

  • Date on which employment is to begin;
  • Notice of the employee’s rights under the Minneapolis Sick and Safe Time Ordinance, including the date on which the employee will begin to accrue sick and safe time;
  • Employer’s policy regarding gratuities, if applicable to the position;
  • Overtime policy applicable to the employee’s position, if any, including when overtime shall be paid and the applicable rate or rates of pay; and
  • Date this notice was received by the employee.

In addition, employers subject to the Minneapolis Ordinance must provide employees with written notice of any changes to the information included in this notice and the employee must sign such notice before the changes go into effect.

Significantly, the Minneapolis Ordinance also provides that this written notice should be provided to all current employees (not just new employees) as of January 1, 2020, which is the effective date of the Ordinance, if the information contained in the notice has not already been provided to the employee.

With respect to the earnings statement, in addition to the requirements of the Minnesota Wage Theft Law, employers subject to the Minneapolis Ordinance must include the number of hours of sick and safe time accrued and unused by the employee pursuant to the Minneapolis Sick and Safe Time Ordinance. Employers are required to provide earnings statements to the employees in written form, rather than electronic, if so requested. Employers must also provide employment notices provided by the Minneapolis Department of Civil Rights.

Finally, employers are prohibited from retaliating against employees for the assertion of any right protected under both the Minnesota Wage Theft Law and the Minneapolis Ordinance.

Looking Ahead

Given the enhanced enforcement mechanisms the Minnesota Wage Theft Law granted to the DLI to investigate wage theft violations, along with the $3.1 million in new DLI funding that allows the agency to increase targeted workplace enforcement, there may be an uptick of recordkeeping audits and other enforcement activities in the coming months. Minnesota employers should contact employment counsel to review their payroll and recordkeeping practices to ensure compliance.

If you have any questions about this alert or about wage law compliance, please contact Jenny H. Fuller at 612.607.7083 or [email protected], or any member of Fox Rothschild’s Labor & Employment Department.