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The Stakes Have Risen: Criminal Consequences for Wage/Hour Violations

Unbeknownst to most employers (note: ignorance of the law is not a valid defense), there are numerous violations in employment law that have criminal consequences. The stakes have risen as the 2019 Minnesota legislature passed sweeping wage and hour “reform” laws that have increased potential criminal consequences for employers. The crime of “wage theft” was added to the existing criminal laws. “Wage theft” occurs “when an employer with the intent to defraud:

  • i) fails to pay an employee all wages, salary, gratuities, earnings, or commissions at the employee’s rate or rates of pay or at the rate or rates required by law, including any applicable statute, regulations, rule, ordinance, government resolution or policy, contract, or other legal authority, whichever rate of pay is greater;
  • ii) directly or indirectly causes any employee to give a receipt for wages for a greater amount than that actually paid to the employee for services rendered;
  • iii) directly or indirectly demands or receives from any employee any rebate or refund from the wages owed the employee under contract of employment with the employer; or
  • iv) makes or attempts to make it appear in any manner that the wages paid to any employee were greater than the amount actually paid to the employee.”

The following are several examples of wage theft under the new law:

  • The employer did not provide the final paycheck to the employee (note: in Minnesota, you have limited time periods in which to provide a final paycheck);
  • The employer did not pay the employee overtime as required (note: you could be subject to either federal or state overtime laws, which are different, depending on your business);
  • The employer did not pay the employee minimum wage as required (note: you could be subject to federal, state or local minimum wage laws);
  • The employer required tip sharing (note: the definition of “tip sharing” is expansive);
  • The employer failed to pay the employee wages that are due (note: in Minnesota, you must pay your employee for all work that has been performed if they are hourly employees);
  • The employer has made illegal deductions from the employee’s wages (note: in Minnesota, they are limited lawful deductions that can be taken);
  • The employer required an employee to work “off-the-clock”; and
  • The employer misclassified the worker as an independent contractor rather than an employee (note: there are numerous definitions of “independent contractor,” and technically, your worker could be classified as an independent contractor under one set of laws, and an employee under another set of laws. The employer does not get to choose whether a worker is an independent contractor rather than an employee).

Spangler and de Stefano, PLLP assists business owners with complying with wage and hour laws.

The material contained herein is for informational purposes only, and is not intended to create or constitute an attorney-client relationship between Spangler and de Stefano, PLLP and the reader. The information contained herein is not offered as legal advice and should not be construed as legal advice.