The Minnesota Legislature recently amended two important statutes governing unpaid wages for Minnesota employees (Minn. Stat. § 181.13 and Minn. Stat. § 181.14). The amendments are generally favorable to employees and provide clarification on several important aspects. The amendments are effective as of April 30, 2013. The text of the statutes with the amendments can be found here.
First, both statutes are amended to define when wages are actually earned or unpaid:
Wages are actually earned and unpaid if the employee was not paid for all time worked at the employee’s regular rate of pay or at the rate required by law, including any applicable statute, regulation, rule, ordinance, government resolution or policy, contract, or other legal authority, whichever rate of pay is greater.
Second, both statutes are amended to clarify the penalty amount due to the employee in the case of default by the employer. The employee may recover:
[A] penalty equal to the amount of the employee’s average daily earnings at the employee’s regular rate of pay or the rate required by law, whichever rate is greater. . . .
Minn. Stat. §§ 181.13(a), 181.14, subd. 2. The amendments also clarify that the penalty due to the employee is in addition to recovering the wages and commissions actually earned and unpaid. See Minn. Stat. §§ 181.13(a), 181.14, subd. 2.
Third, both statutes are amended to require that a demand for payment by an employee be in writing:
An employee’s demand for payment under this section must be in writing but need not state the precise amount of un-paid wages or commissions.
Fourth, both statutes are amended to permit employees to seek and recover payment from an employer even where they are not a party to the contract that requires payment:
An employee may directly seek and recover payment from an employer under this section even if the employee is not a party to a contract that requires the employer to pay the employee at the rate of pay demanded by the employee, so long as the contract or any applicable statute, regulation, rule, ordinance, government resolution or policy, or other legal authority requires payment to the employee at the particular rate of pay. The employee shall be able to directly seek payment at the highest rate of pay provided in the contract or applicable law, and any other related remedies as pro-vided in this section.
Fifth, Minn. Stat. § 181.14 is amended to clarify under what circumstances an employer may make deductions to an employee’s wages:
No employer shall make any deduction, directly or indirectly, from the wages due or earned by any employee, who is not an independent contractor, for lost or stolen property, damage to property, or to recover any other claimed indebtedness running from employee to employer, except as permitted by section 181.79.
Minn. Stat. § 181.14, subd. 4 (emphasis added). The amendments remove the prior statutory text permitting employers to audit the accounts of an employee and, in the case where money or property entrusted to the employee was not properly accounted for, excluding the employee from the benefit of sections 181.13 to 181.171.
In light of these changes, employers may wish to review their current payroll policies and practices to ensure that they are in compliance with the amendments when an employee is discharged, terminated, or resigns. If your company would like to learn more about Minnesota unpaid wages laws for employees, please contact any of the Trepanier MacGillis Battina P.A. employment law attorneys.
Additionally, if you are an employee seeking to recover unpaid wages, you can review a detailed article concerning steps for collecting of unpaid wages and commissions here.
About the Author:
Minneapolis employment law attorney Kelly M. Dougherty practices extensively in the fields of employment law and business law. routinely represent employees and employers in disputes involving unpaid wages and commissions. Kelly may be reached at 612.455.0504 or firstname.lastname@example.org. Trepanier MacGillis Battina P.A. is a Minnesota unpaid wages law firm located in Minneapolis, Minnesota.