New Wage Theft Law in Minnesota Hailed as Nation's Strongest

Minnesota lawmakers and top government officials took a rare bipartisan victory lap Monday to usher in what they called the nation's strongest set of protections against wage theft, which has become a multimillion dollar problem around the state.
by | July 17, 2019 AT 8:16 AM
Hotel cleaning staff.
The hospitality industry is known for higher rates of wage theft claims. (TNS/AFP/Getty Images/Nicholas Kamm)

By Stephen Montemayor

Minnesota lawmakers and top government officials took a rare bipartisan victory lap Monday to usher in what they called the nation's strongest set of protections against wage theft, which has become a multimillion dollar problem around the state.

Making it a crime to hold back workers' wages while boosting the state's resources to enforce compliance emerged as a key priority for House Democrats last legislative session. DFL Gov. Tim Walz meanwhile lauded Senate Republican leadership's help forging the new law that he signed in a Capitol ceremony Monday.

The law doubles the number of state investigators who will probe wage theft violations and conduct site visits while making it a felony to withhold workers' pay in certain cases. The state has estimated that some 39,000 Minnesotans miss out on nearly $12 million to the practice each year.

"This is the same thing as if they walked in and took the money from you," Walz told reporters after the signing. "It's insidious in that it undermines our faith in the system."

Labor Commissioner Nancy Leppink said her agency will be able to add as many as eight new investigators. She described it as a good "down payment" toward improving the state's response to wage theft. Leppink said investigators will zero in on industries and sectors known for higher rates of wage theft claims -- generally, labor intensive occupations like construction and hospitality.

Leppink said wage theft materializes in cases of employers not paying overtime or holding back entire paychecks, and when employers misclassify workers as independent contractors.

Attorney General Keith Ellison, who attended Monday's bill signing, is also targeting the practice through a newly opened wage unit in his office. Ellison tapped Assistant Attorney General Jonathan Moler, previously a private workers' rights attorney, to lead economic and social justice issues. The office also added Ana Vergara, formerly a refugee campaigner for Amnesty International, as an investigator focused on wage theft.

State Rep. Tim Mahoney, DFL-St. Paul, singled out the new wage theft protections as one of this year's most personally memorable legislative achievements. His Senate counterpart, Eric Pratt, a Prior Lake Republican, hailed their agreement as a bipartisan effort to put working Minnesotans ahead of political differences.

Pratt left open the possibility of agreeing to more money for investigators to go after perpetrators in the future, but added that he hoped the new law would deter bad actors from choosing to do business in Minnesota in the first place.

"We agreed on a core value: If you earn a wage you should be paid a wage. It's that simple," Pratt said. "And if you're stealing somebody's wages, if you're attempting to defraud somebody you should pay a penalty."

(c)2019 the Star Tribune (Minneapolis)