New Employer Recordkeeping Requirements Now Set to Take Effect July 1st – Are You Ready?

As we previously reported (“Minnesota Passes Sweeping Wage-Theft and Employer Recordkeeping Law”), Minnesota employers face new administrative challenges and enhanced penalties for not meeting those challenges.

While the criminal components of the new law go into effect on August 1, 2019, as previously reported, the civil components actually take effect on July 1, 2019.  This is because the new bill includes monetary appropriations, which accelerates the effective date in accordance with Minnesota legislative rules.  As such, the time to gear for these new requirements is now!

This is not welcome news for employers since the new Wage-Theft Bill includes numerous new recordkeeping requirements that are far than clear.  Representatives from the Minnesota Department of Labor and Industry (“MN-DOLI”) have promised informal guidance (in the form of FAQs), but it is unlikely that they will have the opportunity to issue more complete administrative regulations before the law goes into effect.

Here is a quick summary of what Minnesota employers need to know about the portions of the law taking effect on July 1:

New Signed “Wage Notice” for Each Employee

Effective July 1, 2019, Minnesota law will require all employers to provide employees with a written “wage notice” that includes the following information “at the start of employment”:

(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, and the specific application of any additional rates;

(2) allowances, if any, claimed pursuant to permitted meals and lodging;

(3) paid vacation, sick time, or other paid time-off accruals and terms of use;

(4) the employee’s employment status and whether the employee is exempt from minimum wage, overtime, and other provisions of chapter 177, and on what basis;

(5) a list of deductions that may be made from the employee’s pay;

(6) the number of days in the pay period, the regularly scheduled pay day, and the pay day on which the employee will receive the first payment of wages earned;

(7) the legal name of the employer and the operating name of the employer if different from the legal name;

(8) the physical address of the employer’s main office or principal place of business, and a mailing address if different; and

(9) the telephone number of the employer.

This notice must be signed by the employee and retained the employer.  The employer must also provide the written notice to an employee whenever anything in the original written notice changes prior to the date the changes take effect.

What does this mean for Minnesota employers?

Employers must create the required “wage notice” that includes all of the required information, and must issue it to all new employees hired on or after July 1.  The notice also must be provided to current employees if any of the information changes and must be provided prior to the date the changes take effect.

It is unclear whether the law requires the employer to provide the “wage notice” to current employees on July 1.  However, because the law specifies “at the start of employment,” it is unlikely that the law requires any notices to current employees on July 1, provided that none of the information specified in the statute has changed.

Are Electronic Notices and Signatures OK?

The law does not address whether the wage notice can be provided in electronic form (e.g., via email) and/or signed electronically.  However, the Minnesota Electronic Transactions Act makes clear that “if a law requires a record to be in writing, an electronic record satisfies the law” and “if a law requires a signature, an electronic signature satisfies the law.”

Therefore, it would seem that electronic notices are permissible under the new law.

Employers Must Keep a List of Personnel Policies Provided to Employees

Effective July 1, 2019, in addition to keeping copies of the “wage notice,” employers must keep a record of “a list of the personnel policies provided to the employee” and the record must include: (1) “the date the policies were given to the employee” and (2) “a brief description of the policies.”

What does this mean for Minnesota employers?

Just what it says – you must keep the required list of policies distributed to your employees.  Moreover, unlike the wage notice, there is nothing that limits the application of this provision to “new” employees (i.e., those hired after July 1, 2019).  Thus, it appears that this recordkeeping requirement could require some additional work with respect to current employees.

Employers that obtain a “handbook acknowledgement” from their employees each year (or each time the handbook is revised) will only need to update the acknowledgement to include a list of the policies that are included in the handbook (e.g. the table of contents).  If policies are maintained in a separate repository, then it is advisable to create an acknowledgment that includes a list of all of the policies (including a short description of each) and have employees acknowledge that they have received access to the policies.

What if our policies are contained on an intranet?

If this is the case, it is advisable to create an acknowledgment that includes a list of all the policies currently in the online repository and notifying employees how they can access them.  Then, the employees would acknowledge the constructive “receipt” of those policies (i.e., access to them via the web portal) and this should comply with the new law.  Again, we are expecting additional guidance from MN-DOLI.

Earnings Statements Must Include New Information

The law adds to information required on an employee earnings statement, which must be provided to each employee at the end of a pay period under Minn. Stat. § 181.032.  The new information required includes the basis of pay (hourly, salary, piece rate, etc.), any allowances for meals or lodging, and the address and phone number of the employer.

What does this mean for Minnesota employers?

Beginning on the first pay period after July 1, 2019, employers will need to make sure that their pay stubs include the new information required by the new law.

Bottom Line

While we anticipate additional guidance from MN-DOLI, many of the provisions of the new law go into effect on July 1 – less than three weeks from now! Employers must take steps immediately to prepare for complying with the new law.

We will continue to monitor this story as it develops.