Effective July 1, 2019, all Minnesota employers are subject to new record-keeping and written notice requirements intended to discourage and punish employer “wage theft” and provide added transparency to workers about the terms of their compensation. Details of the new law were published in a previous alert.

Since our last alert, Minnesota’s Department of Labor & Industry (DLI) has published a sample employee notice to new employees, which has been updated multiple times, most recently earlier this week (the current version can be found here). DLI also has been trickling out other information and guidance, including several updates that were released after the law’s effective date. DLI has now published answers to 45 questions in a “Q&A” section of their website, which were most recently updated last week.

Although not binding, DLI’s Q&A answers provide some insight as to how DLI, as the agency that will enforce the civil provisions of the new law, interprets certain aspects of those provisions. In general, DLI’s guidance suggests it will interpret the new law broadly. For example, DLI states that all employers, including professional employer organizations and joint employers (and each of them), are subject to the law’s notice and record-keeping requirements, and further opines that even seasonal employees must receive the required written notice, and must receive a new notice at the start of employment for the next season.

On the other hand, some of the answers provide for flexibility in some areas. For example, DLI states that an employer may include links on the written notice template that point to policies, such as those addressing time-off plans or payroll schedules. DLI has also indicated that although the written notice should identify all of the deductions that may be made to employee’s pay, it need not include the amount of each deduction (even though DLI’s sample employee notice includes the following language: “Deductions that may be made from employee’s pay and amounts:”).

Although DLI has indicated that its focus in the next few months will be on educating employers about the new law, rather than enforcement efforts, Minnesota employers who have not yet become familiar with the new law should do so now, and take the necessary steps to ensure compliance, including:

• (1) Provide employees with required notices.
• (2) Ensure wage statements include all required information.
• (3) Comply with all new record-keeping requirements.

The requirements under the new law are discussed in greater detail in our prior alert. The criminal provisions of the new law take effect on August 1, 2019, and apply to all wage theft crimes committed on or after that date.

Minneapolis City Council Considers Wage Theft Ordinance

Meanwhile, the Minneapolis City Council is considering a separate wage theft ordinance that, in its current form, would apply to all employees who spend 80 hours per year working in Minneapolis. The proposed ordinance was in the works prior to the enactment of the state wage theft law, and despite the adoption of the new state law, city council members have indicated they will continue to pursue a separate city ordinance, in part because the ordinance would allow Minneapolis to investigate and enforce wage theft issues on a local level.

Although the proposed ordinance is similar to the new state law in many respects, its provisions would create several additional burdens for employers with Minneapolis employees. In particular, the proposed ordinance would require employers to:

• Provide additional categories of information on the required notice, including notice of employees’ rights under Minneapolis’s Earned Sick and Safe Time Ordinance and the employer’s policies regarding overtime and gratuities, if applicable to the employee’s position
• List employees’ accrued hours under the Earned Sick and Safe Time Ordinance on their earnings statements
• Obtain signed acknowledgments from employees before any changes to their compensation terms (i.e., any of the information required to be included on the initial notice) become effective

Like the new state law, the proposed Minneapolis ordinance would prohibit retaliation against employees who exercise their rights under the ordinance. The proposed ordinance would go further than the state law, however, by creating a rebuttable presumption of retaliation when an employer materially changes the terms or conditions of an employee’s employment within 90 days after the employee’s exercise of his or her rights under the ordinance.

The proposed ordinance would also allow the Minneapolis Department of Civil Rights to periodically publish a list of employers who have been determined to be in violation of the ordinance and which have unpaid relief due to employees or unpaid fines or costs due to the Department, along with the amounts of such unpaid relief or fines. Although the monetary penalties outlined in the proposed ordinance are generally the same or lower than those provided for in the state law, employers with Minneapolis employees could theoretically be subject to two sets of fines for the same violation if the ordinance passes in its current form.

Earlier this week, a coalition of Minneapolis businesses voiced opposition to the proposed ordinance in a letter to Mayor Jacob Frey, arguing that adopting a new set of rules on the heels of the state’s wage theft law will make it hard for Minneapolis businesses to adapt, and expressing concerns about the extra paperwork and regulatory requirements the proposed ordinance would impose.

The proposal is currently set for a public hearing on July 29, 2019. We will continue to monitor and report on developments related to the proposed ordinance.