Wage theft, unfortunately, remains a common issue in many industries across America. The state of Minnesota and the city of Minneapolis are now taking steps to ensure that these unjust practices do not affect their citizens. In May of this year, Minnesota passed a law that wage theft, which can now be charged as a felony offense, can carry fines up to $100,000 or 20 years in prison for a guilty employer. This is one of the strongest wage theft laws in all 50 states and, therefore, illustrates just how committed Minnesota is to protecting the rights of their workers.
Many different forms of wage theft are being prosecuted under this new law. This includes paying employees less than minimum wage, not giving employees their last paycheck after they leave the company, not paying employees for overtime, noncompliant pay stubs, and many other forms of “fudging the numbers” to financially benefit the employer at the employees’ expense. This has become especially prevalent within the immigrant workforce, as employers and labor brokers financially exploit these employees through threats of deportation.
Under the new laws, employers are responsible for giving each employee a written notice of their employment status and terms of employment in the language of their choice. Earnings statements must include an employee’s rate of pay, meal and travel allowances, and the employer’s address and phone number. Companies accused of wage theft will have 72 hours to produce accurate documentation of workplace policies and each employee’s hours and wage information. The inability to produce those records can result in felony charges and could even lead to a class-action lawsuit.
Companies partnering with solutions that require changes to the employee pay stub could lack the required documentation to substantiate that they have sent 100% of the net pay owed to an employee. The company could find itself in a position of relying on a third party (the vendor) to substantiate that all of the pay owed to the employee was indeed delivered. This could potentially arise in discovery in a wage theft class action lawsuit. Employee pay stubs that don’t show an accurate total of all hours an employee has worked within a given pay period may not meet the requirements for constructive receipt, leaving those employers vulnerable to prosecution under these new laws. It is now more important than ever to ensure pay stub compliance by working with a reputable earned wage access provider. Even with these new laws, DailyPay still remains the only on-demand pay benefit that is fully compliant in all 50 states.