What EVERY Employer Must Know About the Minneapolis Wage Theft Ordinance by January 1st

After Minnesota enacted the new Wage Theft Law in  July of 2019, the City of Minneapolis jumped on the bandwagon and passed a very similar wage theft law in August, as we previously reported in Minneapolis Passes Its Own Wage Theft Law.

The Minneapolis ordinance is effective January 1, 2020, and employers with employees working at least 80 hours in Minneapolis (including employers based outside the city limits) must comply by then.

Who Must Comply with the Minneapolis Ordinance on January 1, 2020?

Any employer that employs an employee (including temporary or part-time) working within the geographic boundaries of the City of Minneapolis for 80 hours or more per year must comply with the new Minneapolis ordinance.

This includes not only employers based in Minneapolis but also, according to a recent court decision, those employers not based in Minneapolis but whose employees spend at least 80 hours per year working in the city.

What Does the Minneapolis Ordinance Require?

The Minneapolis ordinance prohibits “wage theft,” requires employers to provide employees with “pre-hire notices” (as well as “supplemental notices”), and requires employers to provide employees with certain “statement of earnings” after each pay period.

What is Different About the Minneapolis Pre-Hire Notice and Supplemental Notice?

With respect to the pre-hire notice, Minneapolis requires that, in addition to all the required information under the new state law, the pre-hire notice must include the following information:

∗ The date on which employment is to begin (unless the start date cannot be determined ahead of time despite reasonable diligence).

∗ Notice of the employee’s rights under the Minneapolis Sick and Safe Time (“SST”) ordinance (or notice about the employer’s sick leave, paid time off, or other PTO policy meeting SST ordinance requirements), which must include the following elements: (1) the method of accrual; (2) the date upon which the employee is first entitled to use accrued Sick and Safe Time (which must be no later than 90 days following start date), and (3) the date upon which the employer’s year for the purpose of Sick and Safe Time accrual (or frontloading) begins and ends (i.e., the “benefit year”).

∗ For non-exempt employees, the overtime policy applicable to the employee’s position, including the rate or rates of pay and the threshold number of hours worked that qualifies an employee to earn overtime pay for any additional hours worked during that workweek.

∗ Where applicable, a statement that tip sharing is voluntary, per state law.

Like the state law, the Minneapolis ordinance requires an employer to provide notice of “any changes to the information contained” in the original pre-hire notice. However, the Minneapolis law also requires that the supplemental notice be (1) acknowledged in writing by the employee (i.e., the supplemental notice must be signed by the employee) and (2) the notice must be provided to the employee before the changes take effect. The only exception to the signature requirement is for a wage increase if the employee received notice, in advance of the increase, of the amount and date of the increase.

The City has developed a sample prehire notice.

What About Current Employees?

Unlike the Minnesota statute, the Minneapolis ordinance requires that employers provide the same notice to all current employees on or before the first pay period of 2020. The only exception is if the employer previously provided the required information. According to an FAQ issued by the City:

Q: Are employers required to provide current employees with the prehire notice?

A: Yes, current employees are covered by the ordinance as of its effective date of January 1, 2020. Any current employee, as of January 1, 2020, who did not previously receive all the required information (including notice of the employer’s sick leave, paid time off, or other time off policy which meets Sick and Safe Time ordinance requirements) must be provided with a pre-hire notice no later than during the first full pay period of 2020. Current employees who were already provided with all of the information required by the prehire notice (even if it was not all provided in a single notice) do not need to receive the information a second time.

This means that if you did not provide a wage notice to your current employees under state law (i.e., those hired before July 1, 2019), then you need to provide the notice to any employees working in Minneapolis on or before the end of the first full pay period of 2020.

Is There a Physical Poster That Needs to be Posted?

Yes, it is part of a combined poster giving employees notice of their rights under the City’s minimum wage ordinance, sick and safe time ordinance, and wage theft ordinance.

In addition to physically posting the notice, the Minneapolis ordinance also requires that the employer provide each new employee with a copy of the city’s notice poster. According to FAQs from the city, new employees must also receive a copy of the notice in “in electronic or printed form . . . no later than the first date on which the employee begins performing work for the employer.”

What is Different About the Required “Statement of Earnings”?

In addition to the information that is required by state law, the Minneapolis ordinance also requires that employers provide “the number of hours of Sick and Safe Time accrued and used by the employee.”

If an employer is using PTO or another paid leave policy to comply with their obligations under the Minneapolis SST ordinance, then it is advisable to provide the PTO balance on the statement as well as the number of hours used for the year. Then, if the employer assumes that the first 48 hours in the first year (and 80 hours every year thereafter) is SST, the employer will be in compliance with this element of the ordinance.

Can I Provide the Pre-Hire Notice, Supplemental Notice, and Statement of Earnings in Electronic Form?

Yes, employers may provide earning statements electronically if employees have access to a computer and time during work hours to review and print the notices and statements. However, the Minneapolis ordinance provides that employees have a right to request and receive these documents in paper format.

Bottom Line

Employers with employees in Minneapolis must take immediate action in order to comply with the new Minneapolis wage theft ordinance by January 1. There is no more time to wait!