The Mistake of a Business Owner Regarding Wage Theft

Minnesota has the strictest wage theft laws in the nation with both criminal and civil consequences. Those laws were put into place in 2019 with bi-partisan support. Wage theft is much more expansive in its definition that what most people think of as wage theft. Any time that an employer does not pay an employee everything that the employee is owed by law is considered wage theft in Minnesota.

Hypothetical #1: Jack and Jill owns Jack and Jill Food Store, Inc. Jack and Jill are frustrated by the cost of overtime for one of their employees. So, they pay that employee a salary because they believe that is how overtime is eliminated.

Analysis: In order to avoid paying overtime, the employee must be exempt from overtime in one of the categories of exemption. The mere fact that an employer is paying a salary (which the law has set a base minimum required salary, which is now under consideration to be raised) does not automatically make an employee exempt. It would be highly unlikely that this employee is exempt from having to be paid overtime under the law.

Hypothetical #2: Rose Petals, LLC has $520,000 in gross sales and ships bouquets and gifts all over the country. They pay their employees overtime if the employee works more than 48 hours a week under Minnesota law.

Analysis: The LLC is subject to the federal law for overtime. Federal law requires overtime to be paid for more than 40 hours per week.

Hypothetical #3: Stan’s Auto Repair Shop, LLC has a policy that employees cannot work overtime. Jim, one of their employees, regularly works overtime. Since the LLC’s policy does not allow overtime, they refuse to pay Jim his overtime.

Analysis: The LLC must pay their employees for all time worked, even when it is not authorized. Therefore, the LLC must pay Jim his overtime. The LLC’s remedy is to terminate Jim if Jim is not following their policies.

Hypothetical #4: Ships Are Huge, LLC has an employee on maternity leave. However, no one else knows how to do this employee’s job and frankly this employee can complete it more quickly than anyone else. So, while on maternity leave, the employee constantly is being send e-mails and texts requesting tasks be done, which she completes.

Analysis: The employee must be paid for all of her time. If she is hourly, she must be paid hourly. If she is salaried and an exempt employee under the applicable law, she must be paid her salary for each week that she worked regardless of how many hours she worked.

Spangler and de Stefano, PLLP assists business owners with understanding and implementing compliance 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.