Wage Theft legislation is one of the hotter HR legal topics beginning to sprout. Following Minnesota’s recent (and surprising) adoption of a comprehensive wage theft law Minneapolis recently passed an ordinance adopting portions of the Minnesota Wage Theft Law (MWTL). But Minneapolis and Minnesota generally are not alone as New Jersey just passed a new wage theft law as well. Anticipate more rules similar to what we are seeing in Minnesota and New Jersey to arise in coming years across the country.   

I. SUMMARY OF MN NEW WAGE THEFT LAW

The MWTL touches on several criminal and employment laws with the idea that more information to employees regarding their wages will result in fewer incidents of wage theft by employers. Whether true or not, according to the State of Minnesota nearly 40,000 workers in the state are not paid their wages fully in any given year. To rectify this the new law does several things: it makes clear earned commissions need to be paid at least every three months; it clarifies the definition of wages to include salary, earnings, and gratuities; and it requires employers to provide notice to new employees of several details regarding their wages and benefits. Moreover, wage statements must have even more information on them beyond what was previously required, and more records are now required to be kept for three (3) years by employers. 

Finally, not to be understated, but if the employer commits “wage theft” it could lead to imprisonment and a fine for any person directly or indirectly working in the interest of the employer (yikes). 

II. MINNEAPOLIS ADOPTION

In addition to the adoption of some portions of the MWTL, Minneapolis will also require employers to include a balance of the employee’s current sick and safety time earnings on each statement. Minneapolis hopes that by attempting to address these issues locally they will be able to combat wage theft on a larger scale.

Under the Minneapolis Ordinance, employers must adhere to regularly scheduled paydays and provide pre-employment notices to employees of their employment terms and conditions. Employers must additionally provide a statement of their earnings at the end of each pay period and provide a current balance of the employee’s sick and safety leave.

The Minneapolis pre-employment notice mirrors the Minnesota law and requires employers give notice of:

• The employee’s rate(s) of pay, the basis for the pay, the measurement of pay (hourly, shift, day, week, salary, piece rate, commission, or some other method);

• Allowances for meals and lodging, if any;

• Paid vacation, sick time or other forms of PTO, how the PTO will accrue and terms for its use;

• Whether the employee is exempt, and the basis for the exemption;

• A list of deductions that may be made from the employee’s pay;

• The number of days in the pay period, the regularly scheduled payday and the day the employee will receive the first payment of wages;

• The legal name of the employer;

• The employer’s physical address; and

• The telephone number of the employer.

Employers will need to have new employees sign-off on receipt of this information. Based on the nature of the notices, doing this at the offer of employment stage seems to make the most sense. 

III. NEW JERSEY WAGE THEFT LAW

Minnesota and Minneapolis are not the only regions that have recently adopted a wage theft ordinance. Last week the New Jersey Governor signed their Wage Theft Act (WTA). Like the Minnesota act, New Jersey aims to significantly increase employer penalties by making wage theft a criminal offense. The law allows for the following:

• Liquidated damages up to 200% of wages owed;

• Added protections for employees who bring retaliation claims against NJ Wage and Hour laws;

• Rebuttable presumption against employers who fail to maintain records required by law or take adverse action(s) against employees who raise internal or external complaints;

• Added rebuttal presumption of successor liability in Wage and Hour Law Claims;

• Six-year statute of limitations to raise claims (including for retaliation) under NJ Wage and Hour Laws; and

• Increased subject-matter jurisdiction.

 IV. SUCCESSOR LIABILITY

The New Jersey law also overhauls successor liability, which is the liability businesses inherit when they buy or merge with another company. With the new law, a business will be presumed as another’s successor if two of the following are true:

• Perform similar work within the same geographical area;

• Occupy the same premises;

• Have the same telephone or fax number;

• Have the same email address or internet website;

• Employ substantially the same work force, administrative employees, or both;

• Use the same tools, facilities or equipment;

• Employ or engage the services of any person or persons involved in the direction or control of the other;

• List substantially the same work experience.

The requirements for a company to be liable for one’s actions, even without having any connections to the violations, is now very low. HR professionals, in-house attorneys and risk managers should take note of what New Jersey did because other states are certain to follow their lead on this subject. If you have any questions, please contact us at 651-389-5000 or myhrgenius@thompsoncoe.com to discuss with an attorney.

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