Minnesota is cracking down on wage theft, and employers need to take notice. Previously, an employer found to have committed wage theft was subject to double the back pay owed to the employee and potential civil fines of up to $1,000 per violation. And while employers remain subject to the old penalties, as of August 1, 2019, those employers are now also subject to criminal prosecution under the Minnesota theft statute. The potential consequences for an employer convicted of wage theft now include significant criminal fines and severe prison sentences.
In light of the incredible risk employers now face if they fail to pay their employees properly, it is more essential than ever to remain informed of what is required and to strictly comply. In order to ensure your business is not in violation of the wage theft laws, it is important to understand what actions constitute wage theft.
What is Wage Theft?
Wage theft occurs when an employer, with intent to defraud, fails to pay an employee all earnings to which she is entitled, attempts to make it appear that the employer paid the employee more than was actually paid (including causing an employee to provide an inflated receipt for compensation/services), or demands or receives the return of any portion of the employee’s entitled earnings.
New Criminal Penalties for Wage Theft
The days where an employer could expect a slap on the wrist and a small civil penalty for wage theft are no more. As of August 1, 2019, an employer convicted of wage theft may be required to serve a serious prison sentence, up to 20 years, and pay huge fines, up to $100,000, in addition to the civil penalties previously in place.
The new maximum criminal penalties for wage theft are as follows:
|Total Wage Theft Amount||Maximum Criminal Penalty|
|Over $35,000||20 years imprisonment and/or $100,000 fine|
|Over $5,000 and up to $35,000||10 years imprisonment and/or $20,000 fine|
|Over $1,000 and up to $5,000||5 years imprisonment and/or $10,000 fine|
|Over $500 and up to $1,000||1 year imprisonment and/or $3,000 fine|
|$500 or less||90 days imprisonment and/or $1,000 fine|
It is important to note that the amounts of wage theft alleged to have occurred within a 6-month period can be added together when determining an employer’s penalty if convicted. For example, if Sally failed to pay Jim $400 in earned wages and also failed to pay Johnny $150 in earned wages within the same 6-month period, Sally’s potential sentence is figured by adding the amounts wrongfully withheld together. Rather than facing a maximum of 90 days imprisonment and/or a $1,000 fine, as would happen if these charges were not aggregated, Sally could now face up to 1-year imprisonment and/or up to a $3,000 fine.
The new penalties for wage theft are life-altering. If you have questions about whether an action constitutes wage theft or want to ensure your business is in compliance, you should consult an attorney.
© 2019 All Rights Reserved Rinke Noonan Ltd.