United States: Minneapolis Wage Theft Ordinance To Go Into Effect On January 1, 2020

Last Updated: August 16 2019
Article by Bruce J. Douglas and Brian A. Moen

Joining a chorus of cities and states addressing concerns involving employers' failure to properly calculate employees' pay, or to pay them at all, allowing employees to work "off the clock," or take unauthorized or illegal deductions, on August 8, 2019, the City of Minneapolis enacted an ordinance prohibiting "wage theft," which will go into effect on January 1, 2020.

The term "wage theft" is generally understood to mean instances of denying meal or rest breaks, paying a wage below the minimum wage, withholding gratuities, allowing employees to work "off the clock," not calculating or paying overtime compensation properly, and making unlawful deductions from pay. Though largely duplicative of Minnesota's new wage theft statute, the Minneapolis ordinance imposes some additional requirements on employers and provides the city with the ability to investigate allegations of wage theft independent of state agencies.

The Minneapolis ordinance will apply to employers in the city and any employee, including temporary employees and part-time employees, who perform work "within the geographic boundaries of the city for at least eighty (80) hours in a year." Notably, the ordinance does not apply to independent contractors or government employees.

Prohibition on Wage Theft

The Minneapolis ordinance's specific prohibitions on wage theft, quoted below, are as follows:

  1. An employer shall pay all wages owed to an employee by reason of employment, for work performed in the City of Minneapolis, on the regularly established payday identified in the notice required by Section 40.540 [the prehire notice discussed below].
  2. No employer shall directly or indirectly cause an employee to give a receipt for wages for a greater amount than actually paid to the employee for services rendered.
  3. No employer shall directly or indirectly demand or receive from any employee any rebate or refund from the wages owed to the employee.
  4. No employer shall make or attempt to make it appear that the wages paid to any employee were greater than the amount actually paid to the employee.

Written Prehire Notice to Employees

Like Minnesota's 2019 state law addressing wage theft, the Minneapolis ordinance requires employers to provide employees with a written notice containing certain categories of information about the employee's pay and benefits. In addition to the information that must be provided via written notice under Minnesota's new wage theft law, the Minneapolis ordinance requires the following additional information be provided via written notice to employees at the start of employment:

  1. The date on which the employment is to begin
  2. A notice of the employee's rights under the Sick and Safe Time Ordinance, Articles I through III of this Chapter, including the date on which the employee will begin to accrue Sick and Safe Time
  3. The employer's policy regarding gratuities, if applicable to the position
  4. The overtime policy applicable to the employee's position, if any, including when overtime shall be paid and the applicable rate or rates of pay

The written notice may provide this information by explicit reference to an employee handbook if employees are directed to the specific sections of the handbook in which such information is provided. An employer must also keep a copy of the notice signed by an employee acknowledging receipt and indicating the date the notice was received by the employee.

Similar to the requirements under the state's wage theft law, the Minneapolis ordinance requires employers to provide employees with written notice of any changes to the information contained in the notice prior to those changes taking effect. But these changes must be signed by employees before going into effect, and employers must keep signed copies of all notices of changes in addition to the initial notices.

Finally, unlike the state law, the Minneapolis notice provisions require employers to provide the "prehire notice" to all current employees as of the ordinance's January 1, 2020 effective date, provided all of the information contained in the prehire notice has not already been provided to the employee.

Earnings Statements

In addition to the requirements for earnings statements mandated under state law, the Minneapolis ordinance will further require employers to indicate "[t]he number of hours of Sick and Safe Time accrued and unused by the employee" as provided for under the Minneapolis Sick and Safe Time Ordinance.

Additionally, if an employee makes a request that they would like to receive their earnings statements in written form—as opposed to by electronic means—then an employer must provide future earnings statements to that employee in writing "if the employer has received at least twenty-four (24) hours notice" from the employee.

Recordkeeping Requirements

The Minneapolis ordinance also imposes additional recordkeeping requirements on employers, although these requirements generally align with those now required by state law, including:

  1. the name, address, and position of each employee;
  2. the prehire notice(s) and changes thereto required by the ordinance;
  3. the required statements of earnings required by the ordinance, together with any additional information required to demonstrate how the total amount of gross pay earned by the employee was calculated. This information includes, but is not limited to, the hours worked each day and workweek for employees paid on an hourly basis, the number of pieces completed for employees paid at a piece rate, and the method of calculating commissions for employees paid on a commission basis; and
  4. a list of personnel policies provided to the employee, including the date the policies were given to the employee and a brief description of the policies.

Employers must retain these records while the employee is employed and for at least three years after termination, except for the statement of earnings, which must be retained for at least three years after date upon which the statement was provided to the employee. Moreover, an employer must allow an employee to inspect those records that relate to him or her at a reasonable time and manner.

Required Postings

The ordinance states that the Minneapolis Department of Civil Rights will provide a notice "suitable for posting by employers in the workplace informing employees of their rights" under the ordinance by May 1st of each year. Employers will be required to post the notice "in a conspicuous place at any workplace or job site in the City where any employee works, in a place where it can be readily observed and easily reviewed by employees." The notice must be posted in English, as well as "in any language spoken by at least five percent (5%) of the employees at the workplace or job site, if published by the Department." Moreover, if employees do not perform work at a physical workplace or job site in which the notice may be posted, employers may satisfy this requirement by providing a physical or electronic copy of the notice to each employee.

Enforcement and Penalties

The ordinance gives the Minneapolis Department of Civil Rights authority to enforce its provisions against wage theft. Employees may report any suspected violations of the ordinance to the department provided it occurred after the ordinance's January 1, 2020 effective date and within two years prior to filing the report (or three years if the alleged violation was willful).

If an employer is found to have violated the ordinance, they may be ordered to cease and desist engaging in the prohibited practice, and the director of the Department of Civil Rights may order appropriate relief, including reinstatement, compensatory damages to the employee in the amount of wages owed, and/or liquidated damages in an amount equal to compensatory damages, or $250.00, whichever is greater. The liquidated damages available may be increased if the employer has been previously found to have violated the ordinance within a three-year period, culminating in a civil fine of up to $3,000, depending on the nature of the violation and the number of prior violations the employer has had of the same type within the preceding three years.

Finally, the ordinance strictly prohibits employers from taking adverse employment action or discriminating against an employee for exercising his or her rights under the ordinance.

Key Takeaways

The Minneapolis wage theft ordinance largely duplicates the requirements of Minnesota's newly enacted wage theft law, which imposes written employee notice and recordkeeping obligations on employers. Employers may want to consult with their payroll providers to ensure that earnings statements comply with the new ordinance. Furthermore, employers may incorporate the additional information required under the ordinance into the written notices they are providing employees pursuant to Minnesota's wage theft law prior to the ordinance's January 1, 2020, effective date. Finally, employers must retain records as required by the ordinance and will most likely want to post the newly required "notice" once it is made available by the Minneapolis Department of Civil Rights.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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