What is Wage Theft?
The Omnibus bill includes two separate areas of enforcement. The first area concerns civil enforcement of wage payments. It increases the penalties for failure to pay wages and creates certain notice and recordkeeping requirements. The second area concerns criminal penalties for intentional wage theft. While both areas are referred to colloquially as wage theft, the statutory definition of wage theft applies only to intentional wage theft under the criminal statute. The law, however, increases potential exposure for employers that do not pay employees properly.
The bill allocates over $2 million annually to civil enforcement of wage theft issues through the Minnesota Department of Labor and Industry and the Attorney General’s Office. It provides greater enforcement mechanisms including the authority to inspect places of employment “without unreasonable delay” and gives the Commissioner of Labor the ability to obtain an inspection order from the court if the employer refuses. It also makes it a misdemeanor to hinder or delay the Commissioner in the performance of his duties.
The new law gives the Commissioner the right to interview non-management employees in private regarding matters under investigation. It also increases the penalty for repeat failures to provide the records required by the Department of Labor to $5,000 per repeated failure. The law gives the Department the ability to share data with other public agencies, including licensing agencies. The data sharing will likely have implications for government contractors that run afoul of these new requirements. Finally, the law includes a retaliation prohibition, which includes a private right to bring a lawsuit, as well as a civil penalty in an amount between $700 and $3,000 per violation.
Timing of Payment of Wages
The law amends Minnesota Statute § 181.101 regarding the timing of wage payments. The statute now explicitly includes salary, earnings, and gratuities within the types of wages that must be paid at least once every 31 days. The law also states that all commission earned by an employee must be paid at least once every three months. The law removes the 15-day cap on penalties for late payment of wages. The law now explicitly includes commissions in the types of wages that may be demanded for payment; if the commission is not paid within 10 days of a demand for payment, the Department may charge and collect the commission earned along with a penalty equal to 1/15 of the commissions earned but unpaid for each day beyond the 10-day limit.
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