HF 1391

as introduced - 90th Legislature (2017 - 2018) Posted on 03/03/2017 08:46am

A bill for an act
relating to employment; prohibiting wage theft; modifying payment of wages;
increasing civil and criminal penalties; allowing for administrative review;
appropriating money; amending Minnesota Statutes 2016, sections 177.27,
subdivision 2, by adding a subdivision; 177.30; 177.32, subdivision 1; 181.03,
subdivision 1, by adding subdivisions; 181.032; 181.101.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2016, section 177.27, subdivision 2, is amended to read:

Subd. 2.

Submission of records; penalty.

The commissioner may require the employer
of employees working in the state to submit to the commissioner photocopies, certified
copies, or, if necessary, the originals of employment records which the commissioner deems
necessary or appropriate. The records which may be required include full and correct
statements in writing, including sworn statements by the employer, containing information
relating to wages, hours, names, addresses, and any other information pertaining to the
employer's employees and the conditions of their employment as the commissioner deems
necessary or appropriate.

The commissioner may require the records to be submitted new text begin in a specific format new text end by
certified mail delivery or, if necessary, by personal delivery by the employer or a
representative of the employer, as authorized by the employer in writing.

The commissioner may fine the employer up to deleted text begin $1,000 deleted text end new text begin $10,000 new text end for each failure to submit
or deliver records as required by this section. This penalty is in addition to any penalties
provided under section 177.32, subdivision 1. In determining the amount of a civil penalty
under this subdivision, the appropriateness of such penalty to the size of the employer's
business and the gravity of the violation shall be considered.

Sec. 2.

Minnesota Statutes 2016, section 177.27, is amended by adding a subdivision to
read:

new text begin Subd. 11. new text end

new text begin Subpoenas. new text end

new text begin In order to carry out the purposes of this section, the commissioner
may issue subpoenas to compel persons to appear before the commissioner to give testimony
and produce documents, apparatus, devices, equipment, or materials. Upon the application
of the commissioner, a district court shall treat the failure of any person to obey a subpoena
lawfully issued by the commissioner under this subdivision as a contempt of court.
new text end

Sec. 3.

Minnesota Statutes 2016, section 177.30, is amended to read:

177.30 KEEPING RECORDS; PENALTY.

(a) Every employer subject to sections 177.21 to 177.44 must make and keep a record
of:

(1) the name, address, and occupation of each employee;

(2) the rate of pay, and the amount paid each pay period to each employee new text begin , including
whether each employee is paid by the hour, shift, day, week, salary, piece, commission, or
other new text end ;

(3) the hours worked each day and each workweek by the employee new text begin , including for all
employees paid at piece rate, the number of pieces completed at each piece rate new text end ;

(4) new text begin any personnel policies provided to employees;
new text end

new text begin (5) a copy of the notice provided to each employee as required by section 181.032, clause
(d);
new text end

new text begin (6) new text end for each employer subject to sections 177.41 to 177.44, and while performing work
on public works projects funded in whole or in part with state funds, the employer shall
furnish under oath signed by an owner or officer of an employer to the contracting authority
and the project owner every two weeks, a certified payroll report with respect to the wages
and benefits paid each employee during the preceding weeks specifying for each employee:
name; identifying number; prevailing wage master job classification; hours worked each
day; total hours; rate of pay; gross amount earned; each deduction for taxes; total deductions;
net pay for week; dollars contributed per hour for each benefit, including name and address
of administrator; benefit account number; and telephone number for health and welfare,
vacation or holiday, apprenticeship training, pension, and other benefit programs; and

deleted text begin (5) deleted text end new text begin (7) new text end other information the commissioner finds necessary and appropriate to enforce
sections 177.21 to 177.435. The records must be kept for three years in deleted text begin or near deleted text end the premises
where an employee works except each employer subject to sections 177.41 to 177.44, and
while performing work on public works projects funded in whole or in part with state funds,
the records must be kept for three years after the contracting authority has made final payment
on the public works project.

(b) new text begin All records required to be kept under paragraph (a) must be readily available for
inspection by the commissioner on the premises of employment during reasonable office
hours under section 177.27, subdivision 1.
new text end

new text begin (c) new text end The commissioner may fine an employer up to deleted text begin $1,000 deleted text end new text begin $10,000 new text end for each failure to
maintain records as required by this section. This penalty is in addition to any penalties
provided under section 177.32, subdivision 1. In determining the amount of a civil penalty
under this subdivision, the appropriateness of such penalty to the size of the employer's
business and the gravity of the violation shall be considered.

Sec. 4.

Minnesota Statutes 2016, section 177.32, subdivision 1, is amended to read:

Subdivision 1.

Misdemeanors.

new text begin (a) new text end An employer who does any of the following is guilty
of a misdemeanor:

(1) hinders or delays the commissioner in the performance of duties required under
sections 177.21 to 177.435;

(2) refuses to admit the commissioner to the place of business or employment of the
employer, as required by section 177.27, subdivision 1;

(3) repeatedly fails to make, keep, and preserve records as required by section 177.30;

(4) falsifies any record;

(5) refuses to make any record available, or to furnish a sworn statement of the record
or any other information as required by section 177.27;

(6) repeatedly fails to post a summary of sections 177.21 to 177.44 or a copy or summary
of the applicable rules as required by section 177.31;

(7) pays or agrees to pay wages at a rate less than the rate required under sections 177.21
to 177.44;

(8) refuses to allow adequate time from work as required by section 177.253; or

(9) otherwise violates any provision of sections 177.21 to 177.44.

new text begin (b) An employer is guilty of a gross misdemeanor if the employer fails to pay any wages
due to an employee or employees under sections 177.21 to 177.44, and the total of any such
wages in relation to all affected employees is $10,000 or more.
new text end

Sec. 5.

Minnesota Statutes 2016, section 181.03, subdivision 1, is amended to read:

Subdivision 1.

Prohibited practices.

deleted text begin An employer may not, directly or indirectly and
with intent to defraud: deleted text end new text begin (a) No employer shall commit wage theft.
new text end

new text begin (b) For purposes of this section, wage theft is committed if:
new text end

(1) deleted text begin cause deleted text end new text begin an employer has failed to pay an employee all wages to which that employee
is entitled;
new text end

new text begin (2) an employer directly or indirectly causes new text end any employee to give a receipt for wages
for a greater amount than that actually paid to the employee for services rendered;

deleted text begin (2) deleted text end new text begin (3) an employer new text end directly or indirectly deleted text begin demand deleted text end new text begin demands new text end or deleted text begin receive deleted text end new text begin receives new text end from any
employee any rebate or refund from the wages owed the employee under contract of
employment with the employer; deleted text begin or
deleted text end

deleted text begin (3) deleted text end new text begin (4) an employer new text end in any manner deleted text begin make deleted text end new text begin makes new text end or deleted text begin attempt deleted text end new text begin attempts new text end to make it appear
that the wages paid to any employee were greater than the amount actually paid to the
employee deleted text begin . deleted text end new text begin ; or
new text end

new text begin (5) an employer retaliates against an employee for asserting rights or remedies under
this section, including but not limited to filing a complaint with the Department of Labor
and Industry or telling the employer of intention to file a complaint.
new text end

Sec. 6.

Minnesota Statutes 2016, section 181.03, is amended by adding a subdivision to
read:

new text begin Subd. 4. new text end

new text begin Enforcement. new text end

new text begin The commissioner may enforce this section. The use of an
enforcement provision in this section shall not preclude the use of any other enforcement
provision provided by law.
new text end

Sec. 7.

Minnesota Statutes 2016, section 181.03, is amended by adding a subdivision to
read:

new text begin Subd. 5. new text end

new text begin Citations. new text end

new text begin The commissioner may issue a citation for failure to pay wages of
up to $1,000 by serving the citation on the employer. The citation shall direct the employer
to pay to the commissioner any back pay, gratuities, and compensatory damages owed to
the employee within 15 days. The citation may require the employer to correct the violation,
may require the employer to cease and desist from committing the violation, and may assess
a monetary penalty of up to $1,000. In determining the amount of the monetary penalty,
the commissioner shall consider the factors described in section 14.045, subdivision 3. If
the citation includes a penalty assessment, then the penalty is due and payable on the date
the citation becomes final. The commissioner shall vacate the citation if: (1) before the
citation was issued, the employer paid to the employee the back pay, gratuities, and
compensatory damages specified in the citation; and (2) within the five days after the citation
is issued, the employer provides to the commissioner evidence acceptable to the
commissioner that the employer made the payment described in clause (1).
new text end

Sec. 8.

Minnesota Statutes 2016, section 181.03, is amended by adding a subdivision to
read:

new text begin Subd. 6. new text end

new text begin Administrative review. new text end

new text begin (a) Within 15 days after the commissioner issues a
citation under subdivision 5, the employer to whom the citation is issued may request an
expedited hearing to review the citation. The request for hearing must be in writing and
must be served on the commissioner at the address specified in the citation. If the employer
does not request a hearing or if the employer's written request for hearing is not served on
the commissioner by the 15th day after the commissioner issues the citation, the citation
becomes a final order of the commissioner and is not subject to review by any court or
agency. The hearing request must state the reasons for seeking review of the citation. The
employer to whom the citation is issued and the commissioner are the parties to the expedited
hearing. The commissioner must notify the employer to whom the citation is issued of the
time and place of the hearing at least 15 days before the hearing. The hearing shall be
conducted under Minnesota Rules, parts 1400.8510 to 1400.8612, as modified by this
section. If a hearing has been held, the commissioner shall not issue a final order until at
least five days after the date of the administrative law judge's report. Any person aggrieved
by the administrative law judge's report may, within those five days, serve written comments
to the commissioner on the report and the commissioner shall consider and enter the
comments in the record. The commissioner's final order shall comply with sections 14.61,
subdivision 2, and 14.62, subdivisions 1 and 2a, and may be appealed in the manner provided
in sections 14.63 to 14.69.
new text end

new text begin (b) When an employer to whom a citation under subdivision 5 was issued requests an
expedited hearing under paragraph (a), the employer is presumed to have committed each
violation listed in the citation. The employer to whom the citation was issued may rebut
this presumption by showing that the employer did not commit the violation.
new text end

Sec. 9.

Minnesota Statutes 2016, section 181.03, is amended by adding a subdivision to
read:

new text begin Subd. 7. new text end

new text begin Effect on other laws. new text end

new text begin Nothing in this section shall be construed to limit the
application of other state or federal laws.
new text end

Sec. 10.

Minnesota Statutes 2016, section 181.032, is amended to read:

181.032 REQUIRED STATEMENT OF EARNINGS BY EMPLOYER new text begin ; NOTICE
TO EMPLOYEE new text end .

(a) At the end of each pay period, the employer shall provide each employee an earnings
statement, either in writing or by electronic means, covering that pay period. An employer
who chooses to provide an earnings statement by electronic means must provide employee
access to an employer-owned computer during an employee's regular working hours to
review and print earnings statements.

(b) The earnings statement may be in any form determined by the employer but must
include:

(1) the name of the employee;

(2) the deleted text begin hourly deleted text end rate new text begin or rates new text end of pay deleted text begin (if applicable) deleted text end new text begin and basis thereof, including whether
the employee is paid by hour, shift, day, week, salary, piece, commission, or other method new text end ;

(3) new text begin allowances, if any, claimed pursuant to permitted meals and lodging;
new text end

new text begin (4) new text end the total number of hours worked by the employee unless exempt from chapter 177;

deleted text begin (4) deleted text end new text begin (5) new text end the total amount of gross pay earned by the employee during that period;

deleted text begin (5) deleted text end new text begin (6) new text end a list of deductions made from the employee's pay;

deleted text begin (6) deleted text end new text begin (7) new text end the net amount of pay after all deductions are made;

deleted text begin (7) deleted text end new text begin (8) new text end the date on which the pay period ends; deleted text begin and
deleted text end

deleted text begin (8) deleted text end new text begin (9) new text end the legal name of the employer and the operating name of the employer if different
from the legal name deleted text begin . deleted text end new text begin ;
new text end

new text begin (10) the physical address of the employer's main office or principal place of business,
and a mailing address if different; and
new text end

new text begin (11) the telephone number of the employer.
new text end

(c) An employer must provide earnings statements to an employee in writing, rather
than by electronic means, if the employer has received at least 24 hours notice from an
employee that the employee would like to receive earnings statements in written form. Once
an employer has received notice from an employee that the employee would like to receive
earnings statements in written form, the employer must comply with that request on an
ongoing basis.

new text begin (d) At the start of employment, an employer shall provide each employee a written notice
containing the following information:
new text end

new text begin (1) the rate or rates of pay and basis thereof, including whether the employee is paid by
the hour, shift, day, week, salary, piece, commission, or other method;
new text end

new text begin (2) allowances, if any, claimed pursuant to permitted meals and lodging;
new text end

new text begin (3) paid vacation, sick time, or other paid time off accruals and terms of use;
new text end

new text begin (4) whether the employee is exempt from minimum wage, overtime, and other provisions
of chapter 177, and on what basis;
new text end

new text begin (5) a list of deductions that may be made from the employee's pay;
new text end

new text begin (6) the dates on which the pay periods start and end and the regularly scheduled payday;
new text end

new text begin (7) the legal name of the employer and the operating name of the employer if different
from the legal name;
new text end

new text begin (8) the physical address of the employer's main office or principal place of business, and
a mailing address if different; and
new text end

new text begin (9) the telephone number of the employer.
new text end

new text begin (e) The employer must keep a copy of the notice under paragraph (d) signed by each
employee acknowledging receipt of the notice. The notice must be provided to each employee
in English and in the employee's native language.
new text end

new text begin (f) An employer must provide the employee any written changes to the information
contained in the notice under paragraph (d) at least seven calendar days prior to the time
the changes take effect. The changes must be signed by the employee before the changes
go into effect. The employer must keep a signed copy of all notice of changes as well as
the initial notices under paragraph (d).
new text end

Sec. 11.

Minnesota Statutes 2016, section 181.101, is amended to read:

181.101 WAGES; HOW OFTEN PAID.

(a) Except as provided in paragraph (b), every employer must pay all wages earned by
an employee at least once every deleted text begin 31 deleted text end new text begin 16 new text end days on a regular payday designated in advance by
the employer regardless of whether the employee requests payment at longer intervals.
deleted text begin Unless paid earlier, the wages earned during the first half of the first 31-day pay period
become due on the first regular payday following the first day of work. deleted text end new text begin Payment for the
first day of work must be received no later than the first regular payday after the first 16
calendar days of employment or within 31 calendar days of the first day of employment,
whichever comes first. new text end If wages earned are not paid, the commissioner of labor and industry
or the commissioner's representative may demand payment on behalf of an employee. If
payment is not made within deleted text begin ten deleted text end new text begin five new text end days of demand, the commissioner may charge and
collect the wages earned and a penalty in the amount of the employee's average daily earnings
at the rate agreed upon in the contract of employment, not exceeding 15 days in all, for each
day beyond the deleted text begin ten-day deleted text end new text begin five-day new text end limit following the demand. Money collected by the
commissioner must be paid to the employee concerned. This section does not prevent an
employee from prosecuting a claim for wages. This section does not prevent a school district,
other public school entity, or other school, as defined under section 120A.22, from paying
any wages earned by its employees during a school year on regular paydays in the manner
provided by an applicable contract or collective bargaining agreement, or a personnel policy
adopted by the governing board. For purposes of this section, "employee" includes a person
who performs agricultural labor as defined in section 181.85, subdivision 2. For purposes
of this section, wages are earned on the day an employee works.

(b) An employer of a volunteer firefighter, as defined in section 424A.001, subdivision
10, a member of an organized first responder squad that is formally recognized by a political
subdivision in the state, or a volunteer ambulance driver or attendant must pay all wages
earned by the volunteer firefighter, first responder, or volunteer ambulance driver or attendant
at least once every 31 days, unless the employer and the employee mutually agree upon
payment at longer intervals.

Sec. 12. new text begin APPROPRIATION.
new text end

new text begin $500,000 in fiscal year 2018 and $500,000 in fiscal year 2019 are appropriated from the
general fund to the commissioner of labor and industry to address wage theft.
new text end