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An astounding 39,000 Minnesota employees per year file claims against employers seeking unpaid wages of up to $12 million. To help counteract “wage theft,” the Minnesota Legislature in May enacted a sweeping wage theft statute, signed into law by Governor Walz in July.  The new law beefs up enforcement, appropriating over $2 million to fund wage theft prevention, and adds new criminal penalties. Key provisions include the following:

1. Notices to Employees

At the start of employment, the employer must now give employees a written notice outlining, among other things, the rate of pay, manner of payment, manner in which vacation and sick time accrues and terms of usage, number of days in pay period, deductions to pay that may be made, and allowances for meals and lodging. The notice must be in English, but if so requested by the employee, it must be printed in any other language. The notice must be signed by each employee, and maintained by employer in a file for inspection by the Commissioner of Labor. Going forward, the employer must also provide employees a written notice of any changes to the information in these disclosures before they go into effect.  Penalties for failing to keep proper records are $1,000 for each violation, and $5,000 for any subsequent violation.

2. Timing of Payment of Commissions

Wages still must be paid once every 31 days, now defined to include “earnings and gratuities” in addition to salary. For the first time, payment of commissions is regulated. They must be paid at least once every three months.

3. Removal of 15-Day Cap on Late Payment Penalty

Under the predecessor law, employers were subject to a penalty for non-payment of wages capped at 15 days of additional pay for each day that payment was made late. In other words, the employee at trial could recover his/her full unpaid wages, plus up to an additional 15 days worth of pay. That cap has been lifted so in theory, an employee may recover up to a year or more in pay if the employer refuses to make it, depending on how long it takes for the case to go to trial.

4. Anti-Retaliation

The new law prohibits retaliation against employees who assert their rights under this section, with civil penalties up to a maximum of $3,000 per violation.

5. Criminal Penalties

Wage theft is now a crime punishable by up to 20 years in prison, with a fine of up to $100,000 where stolen wages exceed $35,000.  Lesser penalties of 10 years and 5 years in prison apply for lesser amounts of stolen wages, with correspondingly lesser fines.