Today the Minnesota Department of Labor and Industry (MNDOLI) issued employers yet another reminder not to engage in “wage theft” from employees, and encouraged subscribers to share the message. So, I’ll do my civic duty and share. In short, MNDOLI reminds employers of the following (with my comments below each point):

• Pay your employees the applicable state minimum wage. Minnesota’s 2019 minimum-wage rates are $9.86 an hour for large employers and $8.04 an hour for small employers. For additional details about the state’s minimum-wage rates, visit www.dli.mn.gov/business/employment-practices/minimum-wage-minnesota. New rates take effect Jan. 1 each year. Employers operating in Minneapolis or St. Paul should understand the requirements of the minimum-wage ordinances in those cities.
  • There are some exceptions to the minimum wage rates such as training wages and youth wages (under 17).
  • Since Minnesota’s minimum wage rates are currently greater than the federal minimum wage rates, Minnesota’s rates apply to Minnesota employers (as they are more favorable to employees).
• Pay your employees for all hours worked. Employees must be paid for employer-required training and for time needed to prepare to perform work, such as restocking supplies and performing safety checks. If you require employees to meet at a centralized location before driving to a worksite, pay the employee for the drive-time from the location to the worksite. Employers cannot require employees to remain at work and “punch in” only when it gets busy, “punching out” when business gets slow.
  • If you have a Collective Bargaining Agreement, be sure to review those bargained-for terms as well.
  • Tip: have employees drive directly to the jobsite in the morning.  If they have no ride, or need a ride, make it voluntary and be sure they do not do any work before the trip – they are a passenger only.
• Pay your hourly employees for overtime. Federal law requires most hourly employees to receive overtime after working 40 hours in a workweek. Some employees are exempt from this requirement, but still need to be paid overtime after 48 hours in a workweek under Minnesota law.
  • I wrote about this in an earlier post – just because an employee may be exempt from overtime under federal law does not necessarily mean they are exempt under Minnesota law.
  • There is a bill pending (HF 2274) in the Minnesota legislature that would change overtime from 48 hours to 40 hours – stay tuned.
  • If an employee is not authorized to work overtime but does it anyway, they must be paid for those hours worked but can be disciplined for not following workplace rules.
  • Tip: remember private employers (almost everyone reading this) cannot use “comp” time from week to week – it must be paid out, unlike those employees in the public sector.
  • Employers do not need to pay higher rates in Minnesota (unlike some states) for working on Saturdays, Sundays, or holidays.
• Pay your employees at least every 31 days, on a regularly scheduled payday that they are notified of in advance.
  • Tip: don’t forget if you terminate an employee they may request their final paycheck be paid within 24 hours. Since this is sometimes difficult, if possible, it is best to just have the final check ready to hand to the employee upon termination.
• Do not misclassify employees as independent contractors. Such misclassification not only adversely impacts employees, it also creates a competitive disadvantage for employers that comply with state laws related to workers’ compensation, unemployment insurance and tax withholding.
  • Similarly, be careful not to misclassify an employee as exempt from overtime – and keep reviewing this blog for updates on the pending DOL rule to change the salary threshold.  If you missed my post, the update is here.
• Do not take unlawful deductions from your employees’ paychecks. Deductions that generally cannot be made include:  property loss or damage; cash shortages; and tool or uniform expenses.
  • Tip: you can ask the employee to agree to pay it back after the fact – but it has to be in writing, and deductions cannot take the employee below minimum wage (it’s a bit more complicated than that with taxes, other deductions, etc.).  If the employee refuses, you can discipline the employee for whatever caused the loss.
• Do not require your employees to pool or share tips.
  • Again, in Minnesota, employers cannot take a tip credit against minimum wage (like many states).
  • Employees may voluntarily agree to share tips, but employers should stay out of it.

And final tip – don’t forget to keep the records of wages, time cards, deductions, etc. for at least three years after their termination.