The Minnesota Legislature recently passed a law that creates significant new notice and recordkeeping requirements, recognizes “wage theft,” and imposes heightened civil and criminal penalties for violations.

New requirements for Minnesota employers include:

• A signed “Wage Statement” must be obtained from each new employee. At the start of employment, all Minnesota employers must provide new employees with written notice of:

• the rate and basis of their pay, including whether the employee is paid by the hour, shift, day, week, salary, piece, commission or other method, and the specified application of any additional rates (such as a shift differential);

• vacation, sick and other paid time off accruals and terms of use;

• allowances, if any, for permitted meals and lodging;

• employment status, including whether the employee is exempt from minimum wage, overtime and other provisions, and on what basis;

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

• the number of days in the standard pay period, the regularly scheduled payday and the payday on which the employee will receive the first payment of wages earned; and

• certain identifying employer information, including the legal name of the employer, the operating name if different from the legal name, the physical address of the employer’s main office or principal place of business, and a mailing address if different, and the telephone number of the employer.

• Additional employer recordkeeping. Minnesota employers must now keep records of:

• the basis of pay;

• personnel policies provided to the employee, including the date the policies were given to the employee and a brief description of the policies; and

• a signed copy of the new “Wage Statement” (discussed above).

These records must be kept for a minimum of three years on the employer’s premises and must be readily available for inspection by the Department of Labor and Industry (DLI) Commissioner upon demand.

• Additional information to be included on earnings statements. An employee’s earning statement, which must be provided to each employee at the end of each pay period, must now include the basis of pay, any allowances for meals and lodging, and the address and phone number of the employer.

• New timing of payment of earnings. All earnings, such as salary and gratuities, must be paid at least every 31 days, and commissions must be paid at least every three months. Additionally, this law removes the 15-day cap on penalties for late payment of commissions in certain circumstances, after a 10-day notice period.

• Prohibition against retaliation if employees report wage theft. Employers cannot retaliate against employees for asserting their rights under the law, such as filing a complaint with the DLI or informing an employer of their intent to do so. A civil penalty of $700 to $3,000 per violation may be imposed for retaliation.

• Enforcement by the Attorney General. The Minnesota Attorney General can now enforce this law, in addition to the DLI.

• Additional DLI enforcement. The DLI Commissioner is now authorized to enter and inspect employer premises during normal working hours to investigate potential violations. The DLI Commissioner has broad authority to investigate violations, including by issuing subpoenas or interviewing witnesses.

• New maximum fines for repeat offenses. An employer can be liable for up to $5,000 in fines for repeat violations if the employer fails to submit records as the DLI Commissioner requests.

• Wage theft is included in the list of theft crimes that are eligible for enhanced penalties. The law permits felony or gross misdemeanor sentences for wage theft. Also, in assessing monetary penalties, the value of the money, property, or services received by the employer in violation of the law within any six-month period may be aggregated. The criminal provisions of the law will take effect August 1, 2019, one month after the civil components of the law.

The DLI has provided little guidance about the law or how it will be enforced, but Minnesota employers can take steps to ensure compliance. Pay stubs must be modified as needed to include the new required information. Additionally, employers should create form wage notices and policy acknowledgements that satisfy the requirements of the new law.