Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
On August 8, 2019, the Minneapolis City Council unanimously passed the Wage Theft Prevention Ordinance, creating new requirements for Minneapolis employers and giving the Minneapolis Department of Civil Rights enforcement power. The ordinance will take effect on January 1, 2020, and will largely duplicate, and then expand upon, the recently enacted state wage theft law that went into effect on July 1, 2019.1 While Minnesota employers are working diligently to interpret and come into compliance with state wage theft law’s requirements, Minneapolis employers will soon face additional requirements.
The Ordinance mirrors the Minneapolis’ sick and safe time (MSST) law’s definition of covered employees to include any individual, including temporary and part-time employees, who work at least 80 hours per year within the boundaries of the city. The definition of a covered employee under the MSST has been the subject of litigation and is currently on appeal to the Minnesota Supreme Court. The city, however, maintains the definition is valid. As with the MSST law, the Ordinance specifically excludes employees working under certain state employment programs, independent contractors, and casual babysitters. The Department has also made clear that individuals who attend a convention, conference, training, educational class, or similar event in the city, but perform no other work in the city for an employer, are not covered by the Ordinance.
Unlike the Minnesota wage theft law, the Minneapolis Ordinance contains a posting requirement. Minneapolis employers are required to post in a conspicuous place at any workplace or job site in the city any notice published and made available by the Department. Such postings must be in English and any other language spoken by at least 5% of the employees at the workplace or job site. The city has not yet published the required posting.
The Minneapolis Ordinance requires employers to provide a prehire notice to employees that includes all the information required by the state wage theft law, as well as the following additional information:
- the date on which the employment is to begin;
- employee’s rights under the Minneapolis Sick and Safe Time Ordinance, including the date on which the employee will begin to accrue sick and safe time;
- the employer’s policy regarding gratuities, if applicable to the position; and
- any overtime policy applicable to the employee’s position, including when overtime shall be paid and the applicable rate or rates of pay.
The Ordinance allows for provision of such information in the notice via the explicit reference to an employee handbook, collective bargaining agreement (CBA), or similar document, so long as employees are directed to the specific sections where the information is provided. Employers should be cautious, however, because it is not clear that such cross-referencing alone is enough to meet the state law notice obligation. The state’s guidance on many state law notice issues has continued to evolve, and legal counsel should be consulted for the most recent guidance on how to best use existing policies, CBAs, or other documents to meet both the state law and Minneapolis Ordinance requirements.
Like the state law, the Ordinance requires that the prehire notice be signed by the employee, and that employees be notified in writing of any change to any of the notice information prior to the change taking effect. Unlike the state law: (1) employers must also keep a record of the date that prehire notices were delivered to covered employees; and (2) covered Minneapolis employees must also sign the written notice of any change, thus adding additional recordkeeping obligations for Minneapolis employers.
Of note, the Ordinance requires that all current employees also be provided with all the information contained in the prehire notice on or before January 1, 2020.
Required Statement of Earnings
Like the state law, the Ordinance requires that employers provide employees with an earnings statement at the end of each pay period. The earnings statement must include all the information required by Minnesota state law, including those added in the recent state wage theft amendments. In addition, Minneapolis has further required that employers include in earnings statements the number of MSST hours accrued and unused by a covered employee. This will pose a considerable challenge for many employers.
In addition to the prehire notice, the Ordinance also mandates that employers create and maintain the same records that are required by Minnesota’s wage theft law. This includes, among other things, the requirement to maintain a “list of personnel policies provided to the employee, including the date the policies were given and a brief description of the policies.” Neither the state nor the City of Minneapolis has provided any further guidance in terms of how employers may ensure compliance with this recordkeeping requirement. The Ordinance also requires that employers maintain a record of the name, address and position of each employee.
The Ordinance further permits an employee to inspect the records required to be maintained by the Ordinance at a reasonable time and manner. What will be considered a “reasonable” time is not defined in the Ordinance, but state law requires that records must be maintained so that they can be produced to the Minnesota Department of Labor and Industry within 72 hours of a request.
Like the state law, the Ordinance prohibits retaliation against an employee for exercising or attempting to exercise any rights available under the Wage Theft Prevention Ordinance and incorporates protections for employees who face retaliation. The Ordinance does not just prohibit retaliation, however—the Ordinance creates a rebuttable presumption that retaliation occurred if an employer, within 90 days of the employee’s exercise of rights under the Ordinance, materially changes the terms or conditions of the employee’s employment.
Employers found to have violated the Ordinance may be issued a cease and desist order and/or required to provide other appropriate relief, including the employee’s reinstatement, compensatory or liquidated damages, and reimbursement of the Department’s costs. The Ordinance also creates specific civil penalties (between $200 and $3,000 per violation) applicable to differing violations of the law. Assessment of the penalties depends upon the nature of the violation, whether it is a repeat violation, and, in most cases, the size of the employer and the gravity of the offense. Severe cases under the state’s reach can result in criminal charges. The city Ordinance, however, authorizes attorneys to investigate violations only as a civil claim and carries additional fines in extreme cases.
Of note, both the Ordinance and state law allow third parties to report violations, so labor unions or advocacy groups can file complaints on behalf of workers. Under the Ordinance, the Department may also periodically publish a list of employers that have violated the Ordinance and have unpaid relief, fines or costs due, along with the amounts. Employers that appear on such lists are deemed ineligible to be awarded new city contracts and be subject to adverse business license action.
In addition to addressing the state law wage theft requirements, Minnesota employers with covered employees working in the City of Minneapolis will need to ensure the following by January 1, 2020:
- Postings as published by the City of Minneapolis are conspicuously placed.
- Prehire Notices comport with Minnesota’s state wage theft law and also include: notice of the employer’s sick leave, paid time off, or other time off policy that meets Sick and Safe Time Ordinance requirements; a statement that tip sharing is voluntary (if applicable); and the overtime policy applicable to the employee’s position, if any (including the rate or rates of pay and when it applies).
- Current employees, who did not previously receive all the required information, receive and sign a prehire before the end of the first full pay period of 2020.
- Earning statements comport with Minnesota’s state wage theft law and also include the number of hours of sick and safe time accrued an unused by employees.
- Policies are reviewed to ensure anti-retaliation policies extend to protect employees who engage in activities protected by the state and local wage theft laws.
- Recordkeeping procedures are reviewed to ensure that required records are being maintained in an appropriate manner.
While both the state and city have provided frequently asked questions and answers on their respective websites, that information is evolving as employers bring practical challenges to light. There is otherwise little state and local guidance regarding what will be deemed to comply with the state wage theft law and City of Minneapolis Ordinance. Experienced legal counsel can help employers navigate these often highly technical compliance challenges.2
1 See John Lassetter and Shirley Lerner, Minnesota Wage Theft Law Update, Littler ASAP (Aug. 2, 2019); Joe Weiner, Minnesota Wage Theft Bill with New Employer Requirements Takes Effect July 1, Littler Insight (June 11, 2019).
2 Stephanie and Susan are members of Littler’s Minneapolis Office Wage Theft Task Force which is dedicated to monitoring developments in this area. The Task Force also includes: Claire Deason, John Lassetter, Shirley Lerner, Holly Robbins and Joe Weiner. All members of the Task Force welcome your questions regarding the Minneapolis and Minnesota Wage Theft laws.