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What Minnesota’s New Wage Theft Law Means for Your Business

Jul 24, 2019 9:11:00 AM / by CSI Accounting Staff posted in small business payroll, small business operations

A new piece of legislation by Minnesota lawmakers puts unprecedented pressure on businesses to make sure that they’re providing accurate documentation of employee wages. As of Monday, July 1st, 2019 employers are required to provide employees notice at the start of their job laying out wage or salary amount and the benefits available. Employers must also provide additional information in their pay stubs and include allowances taken out for lodging, food, and other incidentals.

This information must not only be provided to the employee but must also be recorded and kept by the employer for record-keeping and auditing purposes. Employers must keep these records on hand.

  • The number of each employee’s hours worked for each workweek
  • What the piece rate of an employee is paid at (if applicable)
  • Personnel policies list, with descriptions of the policies and the date on which the policy was provided to the employee
  • A copy of the new notice, signed by the employee at the start of employment

Employers must have the ability to comply with a commissioner's request for these documents within 72 hours of receiving it. Failure to comply with this law, or to submit proper documentation, could result in a felony charge and harsh fines.

This law was passed in response to complaints from an estimated 40,000 workers annually that they are experiencing wage theft to a total of 12 million in unpaid wages a year. The law doubles the number of state investigators, providing 3.1 million dollars to the Minnesota Department of Labor and Industry.


What Constitutes Wage Theft?

Wage theft can occur when employers don’t pay overtime after 40 hours, not paying minimum wage, not paying for all of the hours worked, of if workers are misclassified by a business as an independent contractor. This new law helps prevent wage theft by putting the impetus on businesses to prove that they are providing correct compensation to their employees to the government.

What Does it Mean for Your Business?

It means that now, more than ever, record-keeping policies are supremely important. It’s also vitally important to document your payroll process. It’s now a felony to not provide the correct items on pay stubs to employees, so you risk large fines or jail time if your stubs aren’t updated to reflect the new laws. You need to make sure that you have proper documentation related to your employee records and earning statements, and you have a plan for your payroll. You are in charge of making sure you're compliant under these new laws.

If you hire an outside payroll and accounting firm for your books, it’s vitally important that you get in contact with them to see how this law changes your business. If you don’t have a payroll and accounting firm, why not? It’s the easiest and best way to remain compliant and avoid extremely costly record-keeping mistakes.

Have more questions? Speak with one of our specialists on how we can update your payroll today. Now, more than ever, it’s important to make sure that you remain compliant with Minnesota law so that your business can continue to thrive. 

CSI Accounting Staff

Written by CSI Accounting Staff

This article was composed by a member of our staff who interviewed our experts to get the facts straight. Any uncited information found here came straight from a knowledgeable accountant or payroll specialist.