Minneapolis Passes Wage Theft Ordinance, Adding Requirements Beyond State Law

The Minneapolis City Council adopted a new “Wage Theft” ordinance on August 8 that adds requirements on top of those in the new Minnesota Wage Theft law that became effective July 1. The city ordinance will be effective January 1, 2020, and will require employers to satisfy the city’s wage theft requirements for all employees who work at least 80 hours in a year within the geographical boundaries of Minneapolis, regardless of the location of the employer. Violations of the ordinance subject an employer to a variety of damages, costs, and penalties.

New Information Requirements for Minneapolis. In addition to written notice of all of the information required by the Minnesota Wage Theft Law, which we have discussed in prior posts (“Minnesota’s New Wage Theft Law: Are You Prepared?” “Minneapolis Wants a Piece of the Wage Theft Pie,” and “Do Your Employees Know When TheirCommissions and Bonuses are ‘Earned’? Dealing with Minnesota’s New Wage TheftStatute”), the new Minneapolis ordinance will require employers to provide written notice of the following information on a pre-hire basis:

• Covered employee’s rights under the Minneapolis Sick and Safe Ordinance and the employer’s related time off policy, including (1) the method of accrual (e.g., the rate at which time off is accrued per pay period or, if applicable front-loaded); (2) the date upon which the employee is first entitled to use accrued sick and safe time (e.g., no later than 90 days following his/her start date), and (3) the date upon which the employer’s year for the purpose of sick and safe time accrual begins and ends (i.e., the “benefit year”).
• The employer’s policy on tips and a statement that tip sharing is voluntary under Minnesota state law, if the employee will be subject to tipping.
• The overtime policy applicable to the employee’s position, if any, including the rate or rates of pay and when they apply. An employer’s best practice will be to comply with this requirement by stating that, when overtime is earned under the employer’s policy, it is paid at “one and one-half times the employee’s regular rate of pay” rather than stating a dollar figure given that the “regular rate of pay” may not be the same as an employee’s base hourly rate.
• The employment start date.

Compliance by Reference to Collective Bargaining Agreements or Handbooks. The city ordinance expressly states that the required pre-hire notice may provide the required information by explicit reference to a section of an employee handbook, collective bargaining agreement, or similar document. With respect to the Minnesota Wage Theft law, the Minnesota Department of Labor and Industry has similarly indicated that, in some circumstances, cross-references to contracts, policies or similar documents may satisfy the state law notice requirements, but the state law itself does not include such a provision.

Employee Acknowledgment. Employees must sign the pre-hire notice to acknowledge its receipt. Electronic signatures are acceptable. Thereafter, any change to the information contained in the pre-hire notice requires additional written notice to the employee prior to the date the change takes effect.

Earnings statements. Earning statements at the end of each pay period must include, in addition to all information required by the state Wage Theft Notice law, accrued Sick and Safe Time hours.

Recordkeeping. As with the state Wage Theft law, employers must keep a copy of the signed notice, or record of electronic signature, for as long as the employee is employed plus three years.

Retaliation. Retaliation is prohibited against an employee for exercising any right under the ordinance.

Effective Date Differs from State Law. Current employees are covered by the ordinance as of its effective date of January 1, 2020. This differs from the state Wage Theft law, which does not require notice to individuals employed on or before June 30, 2019, unless and until a change is made in the information required to be provided in the statutory notice. In contrast, under the Minneapolis law, any individual employed on January 1, 2020, who has not previously received written notice of all required information including notice of the employee’s rights under the Minneapolis Sick and Safe Time Ordinance (which may incorporate the employer's sick leave, paid time off, or other time off policy) must be provided with the written information required in a pre-hire notice no later than the first full pay period of 2020.

Notice Timing for Non-Minneapolis Employers. Although the ordinance applies to all employees who work at least 80 hours in a year in Minneapolis, it is unclear when in the employment cycle employers outside of Minneapolis must satisfy the notice requirements. It is not clear if an employer not located in the city may wait to give the required notice until it determines that an employee has or will hit the annual 80 hour threshold or whether the employer must anticipate this possibility and give the notice on a pre-hire basis or the January 1, 2020, date for current employees. As a matter of best practice, employers may want to consider proactively supplementing their state-required wage theft notices with the additional Minneapolis information and including a field on their earning statements for the sick and safe time data that will be required in Minneapolis.

Remedies. The city’s ordinance provides that, in the event of a violation, an employer may be liable for a variety of consequences. An employer may be required to post notice of its violation in the workplace, the city may periodically publish a list of violators, and may share information about violations among city departments and licensing agencies. Further, the city may order the employer to provide any form of “appropriate relief” for compliance failures, including but not limited to: reinstatement of a terminated employee; compensatory damages incurred by an employee; liquidated damages up to $1,000 per violation, reimbursement to the city of costs it incurs investigating the violation; and various civil fines up to $2,000 for specific violations. The city of Minneapolis is maintaining a website at which businesses and individuals can obtain more information: http://minimumwage.minneapolismn.gov/wagetheft.html.

Compliance Assistance. The employment lawyers at Gray Plant Mooty are up to speed and ready to consult with employers on wage theft compliance issues under both the state and city laws.