Minnesota Wage Theft and Employer Record Keeping Law

Jul 1, 2019Accounting, Business

On May 30th, Minnesota enacted a new Wage Theft Law amending existing state labor laws adding significant recordkeeping and notice requirements for all Minnesota employers. The new law is effective today, July 1, 2019 with penalty enforcement effective as early as August 1, 2019. This means additional recordkeeping and changes to employer paystubs are required starting July 1, 2019.

Wage Theft

The law will make it a crime to commit wage theft, which could be any of the following actions by an employer with intent to defraud:

  • Failing to pay an employee all wages, salary, gratuities, earnings, or commissions
  • Require an employee to provide a wage receipt greater than the wages actually paid
  • Demand an employee a refund or rebate from wages owed to the employer
  • Making it appear that the wages paid were greater than the amount actually paid

The law allows for fines of up to $100,000 and 20 years in prison, if convicted.

Recordkeeping and Additional Wage Statements Requirement

Earnings Statements (Paystubs) Include New Information

The law adds additional requirements to an employee earnings statement. Paystubs will now be required to include these additional items:

  • Employee’s rate or rates of pay and basis thereof, including whether the employee is paid by the hour, shift, day, week, salary, piece, commission or other method.
  • Allowances, if any, claimed for permitted meals and lodging.
  • Employer’s telephone contact.
  • Physical address of employer’s main office or principal place of business and a mailing address, if different.

Signed Wage Statement for Each Employee

Previous to this enactment there was not a requirement to have a signed wage statement. The law creates a new wage statement which requires employers to provide a new employee with written notice of certain items at the start of employment:

  • Employee’s employment status and whether an employee is exempt from minimum wage, overtime and other state wage and hour laws, and on what basis. 
  • Number of days in the employee’s pay period and the regularly scheduled payday. 
  • Date the employee will receive the first payment of wages. 
  • Employee’s rate or rates of pay and the basis thereof, including whether the employee is paid by the hour, shift, day, week, salary, piece, commission or other method and the specific application of any additional rates. 
  • Allowances, if any, that may be claimed for permitted meals and lodging. 
  • Provision of paid vacation, sick time or other paid time off (PTO), how the paid time off will accrue and terms for its use. 
  • A list of deductions that may be made from the employee’s pay. 
  • Employer’s legal name and the operating name, if different. 
  • Physical address of employer’s main office or principal place of business and a mailing address, if different. 
  • Employer’s telephone number. 

This notice must be signed by the employee and kept by the employer.  

Written Notice Required When a Change is Made

The law requires an employer to provide written notice to an employee whenever changes are made to the original written notice. Including a change of pay rate, change of PTO and other payroll and benefit changes.

Wage Statements for Existing Employees

The law does not require employers to provide and obtain signed wage statements from existing employees. However, the Department of Labor strongly encourages employers to provide the written notice with the information required under the new law to all employees when the law takes effect. Employers are required to provide written notice to all employees when changes are made to items included in the wage statement. 

Employers Keep Additional Records

The law requires employers to keep additional employment records for a minimum of three years. The new requirements include:

  • Each employee’s hours worked each day and week, including, for all employees paid at piece rate, the number of pieces completed at each piece rate.
  • A list of personnel policies with brief descriptions of each policy that were provided to each employee, including the date the policies were given.
  • A signed copy of the new wage statement which must include the items noted above.

Other Provisions

The law also includes additional provisions (not discussed in detail here) related to timing of payments to employees for wages, salary, gratuities and commissions. Restrictions on retaliation against employees for asserting their rights as well as broadened enforcement authority for the Attorney General.

For additional information on the wage theft legislation seek legal counsel or the Minnesota Department of Labor and Industry website. The website has employer guides, sample notices and FAQ’s related to the law changes. 


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