WORTHINGTON — Dave Skovholt, labors standards outreach coordinator for the Minnesota Department of Labor and Industry, traveled to Worthington Tuesday to train local employers on how to update their hiring and record-keeping practices to be in compliance with the newly enacted Wage Theft Prevention Act.
Wage theft, Skovholt explained, occurs when an employer fails to pay an employee what was promised or misrepresents the actual amount an employee is paid. There are about 40,000 known cases of wage theft in Minnesota each year, amounting to more than $12 million in lost wages.
A lot of employers, Skovholt noted, think the new Wage Theft Prevention Act is not about them. But a major part of the new law is an adjustment in required documentation — a measure that protects both employers and employees.
Skovholt said DLI fields the most questions from employers about the newly required employee notice, which is to be provided before a new employee begins work. The employee notice must include the following elements:
- Employment status and whether the employee is exempt from minimum wage and/or overtime, and why.
- Length of the pay period and regularly scheduled paydays.
- Date the new employee will receive their first paycheck.
- Method and rate of payment.
- Allowances, if any, for meals and lodging.
- Paid vacation, sick days and paid time off as well as how they are accrued.
- List of possible pay deductions.
- Employer's legal name and operating name.
- Employer's physical address and mailing address.
- Employer's telephone number.
The notice must be signed by the employee, and the employer must keep a copy on hand. Each time a change is made (such as a pay raise), the change must also be noted in writing and signed by the employee.
A few other changes to documentation are outlined in the law, as well.
Also included in the Wage Theft Prevention Act is additional power of DLI and the Attorney General's Office to enforce this law. If an employee files a complaint with DLI, the employer is prohibited from retaliating. Legal recourse is dependent upon the amount of wages that are stolen.
If the amount stolen is between $500 and $1,000: the maximum sentence is one year in prison and/or a $3,000 fine. A stolen amount between $1,000 and $5,000 carries a maximum sentence of five years in prison and/or a $10,000 fine. A stolen total of $5,000 to $35,000 has a maximum sentence of 10 years in prison and/or a $20,000 fine, while a stolen sum of more than $35,000 carries as much as 20 years in prison and/or a $100,000 fine.
For documentation purposes, records must be kept on file for three years after the end of employment.