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What you need to know about Minnesota’s new wage laws in 2019

Jul 04, 2019

Two new wage laws went into effect this month in Minnesota, which may change what information you share with your employees and how.

The first makes it a crime for an employer to practice wage theft with an intent to defraud the employee.

The second dictates what information employers must provide on paycheck stubs.

Both laws went into effect July 1, 2019, and could mean strengthening your business’s need for enhanced recordkeeping and payroll administration to ensure compliance.

What is the new wage theft law?

Wage theft occurs when employers do not pay their workers what is owed them for the work they have performed.

Every Minnesota employer is required to follow all parts of the Wage Theft Law, which includes:

  • Notice requirement: Employers are required to provide all employees with a written notice at the start of their employment that includes the rate and basis of their pay, paid time off accruals and terms of use, employment status and pay deductions. If anything changes, the employer must also provide written notice to an employee before it takes effect. These notices must be signed by the employee and retained by the employer.
  • Recordkeeping requirements: In addition to retaining copies of the signed wage notices, Minnesota employers must also keep a list of personnel policies given to employees. Employers must record the date the policy was given and a description of it. These records must be stored by employers on their premises for a minimum of three years.
  • Timing of payment of wages: All wages (including salary, earnings and gratuities) except commissions must be paid at least once every 31 days. All commissions must be paid at least once every three months. The law removes the 15-day cap on penalties for late payment of wages and now includes commissions in the types of wages that may be demanded for payment. If payment of commissions is not made within 10 days of a demand for payment, the Minnesota Department of Labor and Industry (DLI) commissioner may charge and collect the commission earned and a penalty equal to one-fifteenth of the commissions earned but unpaid for each day beyond the 10-day limit.
  • Tough penalties for failure to comply: The new law creates significant penalties for those who commit wage theft. If an employer fails to submit or deliver records as requested by the DLI commissioner, the law creates a new maximum fine of $5,000 for repeat violations. The maximum penalty would be imprisonment for up to 20 years, a fine of up to $100,000, or both — a penalty applicable when the wage theft exceeds $35,000.

For more detailed information, download the DLI’s guide and access an employee notice example

The new legislation also requires employers display very specific items on the paycheck stubs to comply with the wage statement requirements.

Wondering how it could affect your business? Please reach out to hcm@wipfli.com or your Wipfli relationship executive with questions related to these changes and explore how we can help with your payroll administration and recordkeeping.

Author(s)

Stephanie L. Ferrario
Senior Consultant
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