Minneapolis Cracks Down On Wage Theft

Minneapolis Cracks Down On Wage Theft

August 12, 2019

On August 8, 2019, the Minneapolis City Council unanimously passed the Wage Theft Prevention Ordinance, which reinforces safeguards for the city’s labor force.

The Ordinance, which goes into effect on January 1, 2020, prohibits employers from shortchanging paychecks, attempting to make it appear that wages paid were greater than the amount actually issued, or paying wages on days other days other than regularly established paydays. It also prohibits employers from demanding that employees give any rebate or refund from their wages.

The new regulation incorporates recent amendments from the state legislature, which require employers to provide employees with written notice of certain information, such as the employee’s rate of pay, vacation time, sick time, exempt or non-exempt status, deductions, paydays, among other information. The Wage Theft Prevention Ordinance expands on the state statute, by requiring the employer to provide a notice of the employee’s rights under the Sick and Safe Time Ordinance, the employer’s policy regarding gratuities (if applicable), and the employer’s overtime policy. Minneapolis employers will be required to provide the notice to any new employees, as well as to all current employees, and to post a city-developed notice at the work site.

The Ordinance also includes new requirements for each pay statement, obligating employees to provide the number of hours of sick and safe time accrued and unused during each pay period.

The Minneapolis Department of Civil Rights will be authorized to enforce the provisions of the Ordinance, by requiring offending employers to pay compensatory damages and liquidated damages. For an initial violation, the liquidated damages may be equal to the compensatory damages, but for a second or third violation, liquidated damages can equal two or three times the compensatory damages, respectively. Additional penalties include hefty civil fines and reimbursement of investigation costs.

In light of the potentially significant consequences of non-compliance, all Minneapolis employers should review their hiring and wage payment procedures to ensure that they conform to the new regulation. Should you have any questions or if you would like to discuss how this new ordinance will impact your company, please contact your regular Saul Ewing Arnstein & Lehr LLP labor and employment attorney.